TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 967
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....issioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi ought to have considered disallowance made in respect of difference in fair market value and sale consideration being only 11.46%, which is nominal in this line of business, therefore, addition confirmed u/s. 56(2)(x) at Rs. 3,56,100/- is unjustified, unwarranted and excessive; 4. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi ought erred in not considering the judgment of various benches of Hon'ble ITAT, which clearly stated that the 15% difference between fair market and sale consideration were allowable, therefore addition u/s. 56(2)(x) confirmed without any reasons is unjustified, unwarranted and excessive; 5. The appellant denied the liability of interest charged u/s. 234A, 234B and 234C of the Act the same may kindly be deleted; 6. The appellant seeks permission to add any other ground of appeal or amend or alter the aforesaid ground of appeal at the time of hearing of the appeal." 3. Grounds no.1 and 6, being general in nature, hence no separate adjudication is required. 4. The issue arise out of grounds no.2,....
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....s. 1,41,75,000/-. During the assessment proceedings, the appellant stated that his share in the property was 50% i.e., 27,50,000/-(Total purchase consideration being Rs. 55,00,000/- and stamp value of entire property being Rs. 1,41,75,000/-). Further stated that the property was purchased in an auction conducted by Nagpur Nagrik Sahkari Bank Ltd., and the difference between the stamp value and purchase value could not be treated as his income as the property was purchased through an auction. Since the fair market value of the property was less than that adopted by the stamp valuation authorities, the AO made a reference u/s 50C(2) of the I.T. Act, to the Valuation Officer for ascertaining the fair market value of the property. The Valuation officer determined the fair market value of the property at Rs. 62,12,200/-. The appellant also referred the case to the Valuation Officer and the Valuation Officer vide his report determined the fair market value of the property at Rs. 55,00,000/-, the same amount as fixed by the Bank. 7.2 Since the fair market value of the property exceeds the consideration by an amount of Rs. 7,12,200/- (Rs.62,12,200 Rs. 55,00,000) and the same is chargeabl....
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....hich case the stamp duty value of the property on the date of agreement fixing the consideration shall be the stamp duty value before the stamp duty authorities and has paid the stamp duty on the stamp duty value of the property mentioned above. Once the stamp value assessed in respect of the transferred property has become final and full consideration actually reported is less than such value, provisions of section 56(2)(x) of I.T. Act, 1961 are attracted instantly. 7.7 In view of the above, the said provision provides for deemed valuation of property if the sale consideration is less than the stamp value of the property. However, the aspects such as whether property was purchased through bank auction, payment was made through banking channel, transaction was bonafide etc. are not of any relevant while determining the valuation u/s 56(2)(x) of I.T. Act. 7.8 In the instant case the departmental Valuation officer has determined the value of the property at Rs. 62,12,200/- after considering all relevant factors. Hence, the same is taken as full value of consideration as a result of transfer and not the purchase consideration of Rs. 55,00,000/- as reported by the appellant. 7.9 ....
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....uty in the present case because the sale/transfer in the present case is by way of a public auction conducted by a statutory body. Pertinently, the assessee is a statutory body incorporated under the provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 and is inter alia, engaged in the activity of marketing of agricultural produce as a public utility. The moot question is as to whether the aforesaid proposition of the assessee is in accordance with law or not. 9. As noted earlier, the objective of section 50C of the Act is to substitute the value adopted by a Stamp Valuation Authority as the full value of consideration in cases where the actual consideration received or accruing to an assessee is lower than the value assessed by the Stamp Valuation Authority. In other words, in such situations, the value determined by the Stamp Valuation Authority is to be taken as the full value of consideration in order to compute the capital gains. In this context, the assessee has referred to the provisions of rule 4(6) of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, especially the proviso which we have reproduced in the earlier....
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.... of the Circular issued by the Government of Maharashtra dated 30-6-2005 (supra) for the purposes of payment of stamp duty. In terms of the said Circular, the highest price in the sale auction is considered to be the fair market value for the purposes of payment of stamp duty. This would mean that the consideration stated in the sale deed is to be accepted as the fair market value for the purposes of payment of stamp duty in the present case and not the prices worked out as per the ready reckoner. Ostensibly, in such a situation the invoking of section 50C of the Act for the purposes of substituting the full value of consideration in order to compute the capital gain would fail since there would not be any differential between the stated consideration and the value to be considered by the stamp valuation authority of the State Government for the payment of stamp duty. However, it has been pointed out by the Revenue that the buyers of the properties have paid stamp duty at the value determined on the basis of rates prescribed in the ready reckoner, which are higher than the stated consideration. In our considered opinion, the aforesaid factum would not make any difference to the rat....