TaxTMI 
TaxTMI 
2024 (5) TMI 1097
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....ing the assessment proceedings noted that the assessee in his return of income, for the purpose of computation of capital gains, has shown consideration received on the sale of property at Rs. 45,00,000/- while as per the stamp duty authority, the circle rate of property was at Rs. 62,82,513/-. On being asked to explain in this respect, the assessee requested the Assessing Officer that the value adopted by the stamp duty authority was higher than the fair value of the property as on the date of transfer and that the matter may be referred to the Departmental Valuation Officer. However, the Assessing Officer rejected the aforesaid contention of the assessee and made the impugned addition. 5. Being aggrieved by the above order of the Assessing Officer, the assessee preferred appeal before the CIT(A). The assessee again before the ld. CIT(A) requested that the market/fair value of the property was less than the value adopted by stamp duty authority and that the matter may be referred to the Departmental Valuation Officer as per the provisions of section 50C of the Act. However, the ld. CIT(A) also rejected the aforesaid plea of the assessee and confirmed the addition so made by the A....
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.... the AO would refer the valuation of such property to the Valuation Officer. Hon'ble Calcutta High Court, in the case of "Sunil Kumar Agarwal Vs. CIT" reported in 372 ITR 83 has clearly held that the AO, discharging quasi-judicial function, has the bounden duty to act fairly and to follow the course provided by law, which in that case, was the reference to the valuation officer. In the present case, in view of the assessee's specific dispute and claim before the AO that stamp valuation of the property sold was not its "fair market value", it was the bounden duty of the AO to have made reference to the Valuation Officer which, for the reasons not borne on records, was not made. 10. Hon'ble Allahabad High Court in the case of CIT Vs Chandra Narain Chaudhary in ITAT No.287/2011 vide Judgment dated 29.08.2013 in a case, though having different facts where assessee therein had filed more than one valuation Report , in the context of section 50C of the Act, held that "whenever objection is taken or claim is made before AO, that the value adopted or assessed or assessable by the Stamp Valuation Authority under sub-section (1) of Section 50-C exceeds the fair market value of ....
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....dated by section 50C (2) of the Act. Therefore, the addition made by the AO cannot be approved. 13. Now, having held that since the AO failed to follow the procedure prescribed under the law and for this reason the addition cannot be held legally valid, the next question arises for consideration is whether the case be set aside to the AO for following the said procedure and then pass fresh order. 14. In this respect we state that though the powers of the Tribunal are wide enough but they should not be used to allow the department to make up its shortcomings, doing so would defeat the purpose of justice and fair play. Objection that the assessee did not request for making reference to the valuation cell, suffice would be to observe that assessee has no obligation to instruct the AO to follow the law. 15. Deciding similar issue, ITAT, Hyderabad in the case of ACIT V. Lalitha Karan, ITA No. 1130/Hyd/2015, order dated 04/01/2017 (copy placed in assessee's compilation on Pgs. 7 - 15) has observed in para 7.1 - "when deeming provision was to be invoked, the same has to be construed strictly and it has to be taken to its logical conclusion i.e. upon not following the proper pr....
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....is not the function of the Tribunal to allow further opportunity to the AO to cover up legal lapses made by him, by restoring the matter back to his file. Therefore, remand/setting aside order could not be made in this case to enable the AO to make up his earlier deficient work by initiating assessment proceedings for the third time after a lapse of considerable time." 17. In the case of Raj Kumar Jain, reported as 50 ITD 0001 (ITAT, Allahabad), Ch. G. Krishnamurthy, the then President of ITAT, as a Third Member also observed in para 5 as follows - "The Tribunal acting as an appellate authority has to see whether the assessment framed by the Assessing Officer and whether the appellate order appealed against was according to law and properly framed on facts and whether there was sufficient material to support it. When there is no material to support it and when as observed by the learned Accountant Member the additions made by the Assessing Officer could not be sustained, it is not for the Tribunal to start investigations suo-moto and supply the evidence for the Department. If the additions are not supported by evidence, the only course open to the Tribunal is to delete the addi....