DCIT, CENTRAL CIRCLE, DEHRADUN vs. SHREEVAAS INFRABUILD PVT. LTD., NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN CIRCUIT BENCH, DEHRADUN BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 45/DDN/2019 Assessment Year: 2015-16 DCIT, Central Circle, Versus Shreevaas Infrabuild Pvt. Ltd. 2nd Floor, MGF Metropolitan Dehradun. Mall, Saket, New Delhi. PAN: AAOCS9940A (Appellant) (Respondent) Assessee by : Sh. Rajesh Malhotra, CA Revenue by : Sh. N.S. Jangpangi, CIT/DR Date of hearing : 21.06.2023 Date of pronouncement: 23.06.2023 ORDER This is an appeal by the assessee against order dated 19.03.2019 of learned Commissioner of Income-tax (Appeals)-IV, Kanpur pertaining to the assessment year 2015-16.

while verifying the return of income filed by the assessee, the

Assessing Officer noticed that the assessee has shown long-term

capital loss of Rs.1,99,79,869/- on sale of land situated in Tehri

district. He further noticed that, while the assessee has shown the

sale consideration of land of Rs.1,09,19,338/-, the stamp valuation

authority has determined the value of property at Rs.4,37,32,664/- for

stamp duty purpose. When the Assessing Officer proposed to

substitute the declared sale consideration with the value determined by the stamp valuation authority for computing long term capital gain

in terms of section 50C(1) of the Act, the assessee objected. Based

on the objections of the assessee, the Assessing Officer made a

reference to the departmental valuation officer (DVO) to determine

the value of the property. Though, the DVO furnished the valuation

report determining the value of property, more or less, matching the

sale consideration shown by the assessee, however, the Assessing

Officer discarded the valuation report of the DVO and adopted the

value determined by the stamp valuation authority as the deemed

sale consideration and computed long term capital gain at

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Rs.3,10,29,410/-. The assessee contested the aforesaid addition

before learned Commissioner (Appeals). Being convinced with the

submissions of the assessee that once, the DVO has determined the

value of the property at a particular amount, which is less than the

value determined by the stamp valuation authority, the Assessing

Officer cannot ignore DVO’s valuation, learned Commissioner

(Appeals) deleted the addition. Being aggrieved, Revenue is before

us.

on record. As far as the factual aspect of the issue is concerned,

there is no dispute that there is difference between the declared sale

consideration and the value of the property determined by the stamp

valuation authority. A reading of section 50C of the Act, as a whole,

makes it clear, as per sub-section (1) of section 50C of the Act, if the

declared sale consideration by the assessee is less than the value of

the property determined by the stamp valuation authority for stamp

duty purpose, the value determined by the stamp valuation authority

will be substituted as the deemed sale consideration. However, an

exception has been carved out in sub-section (2) of section 50C by

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providing that if the assessee objects to adoption of value determined

by the stamp valuation authority before the Assessing Officer, the

Assessing Officer has to make a reference to the DVO for

determining the value of the property. In the facts of the present

appeal, undisputedly, the Assessing Officer, accepting assessee’s

objection, has made a reference to the DVO for determining the value

of the property. Undisputedly, the DVO has furnished valuation report

determining the value of property at a figure, more or less, identical to

the sale consideration declared by the assessee. In the aforesaid scenario, sub-section (3) of section 50C comes into play, which

provides that in a case where value determined by DVO exceeds the

value determined by stamp valuation authority, in that case, the value

determined by the stamp valuation authority shall be considered as

the deemed sale consideration. Conversely, if the value determined

by the DVO is less than the value determined by the stamp valuation

authority, the value determined by the DVO has to be adopted. That

being the statutory provision under section 50C of the Act, the

Assessing Officer cannot adopt the value determined by the stamp

valuation authority by overlooking the value determined by the DVO,

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thereby going against the spirit of section 50C of the Act. If the

Assessing Officer was not satisfied with the manner of determination

of the value by the DVO, he could have sought further clarification

from the DVO, which, however, is not the case. It is further relevant to

observe, the DVO’s report is dated 26.04.2017. Whereas, the dispute

is arising in assessment year 2015-16. Therefore, it cannot be said

that the DVO’s report is not relevant to the impugned assessment

year. In any case of the matter, as discussed elsewhere in the order,

once the Assessing Officer has made a reference under section 50C

(2) of the Act to the DVO, he has to abide by DVO’s report, if it is less

than the value determined by the stamp valuation authority. For the

aforesaid reasons, we are not inclined to interfere with the decision of

learned Commissioner (Appeals) on the issue. Ground is dismissed.

Order pronounced in the open court on 23/06/2023. Sd/- Sd/- (M. BALAGANESH) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT

Dated: 23.06.2023 *aks/-

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