M/S. GUJARAT SMELTING AND PEFINING CO. LTD,AHMEDABAD vs. ITO, WARD-2(1)(1), AHMEDABAD

The brief facts leading to the case is this that the assessee has initially filed his return of income on 30.9.2012 declaring loss at Rs.7,49,752/- which was finalized on 26.2.2015 upon determination of income of the assessee at Rs.2,32,42,814/- Subsequently, it come to 2 the knowledge of the Revenue that the assessee has sold non- agriculture land by and under a sale deed no.167 dated 24.10.2012 for a consideration of Rs.1,37,69,309/-; and further land by and under a sale deed 168 for a consideration of Rs.1,05,22,886/-. The total consideration received for sale of the above land was Rs.2,42,92,195/- which was offered in the return of income as long term capital gain. However, the assessee has borne stamp duty at Rs.18,20,000/- at the prevailing rate of 4.9% of the value of the property as per jantri rate, meaning thereby the total value was assessed at Rs.3,71,42,817/- Thus, by and under an order dated 26.02.2015 under section 263, the ld.Pr.CIT held that the assessment was erroneous and prejudicial to the interest of the Revenue and issued certain directions upon the ld.AO including making necessary inquiry with Sub-registrar and then draw a conclusion keeping in view the provisions of section 50C of the Act. Consequently, the balance amount between the sale value and the assessed amount on the basis of the jantri rate aggregating to the tune of Rs.1,28,40,205/- was added to the total income of the assessee under section 50C of the Act, which was in turn confirmed by the ld.CIT(A), hence, instant appeal before us.

At the time of haring of the instant appeal, the ld.advocate appearing for the assessee submitted before us that though the assessee made an objection for not referring the matter to the ld.DVO in terms of action 50C of the Act during the 263-proceeindgs the same was not done. Instead of that, the ld.AO made an inquiry from sub- Registrar, Halol, Panchmahal to obtain stamp duty valuation. He therefore, made same objection again before the ld.CIT(A) however, which was not taken into consideration by the ld.CIT(A) on the pretext that the said ground was not taken by the assessee before the ld.AO which is not in terms of provisions laid down in section 50C of the Act. The ld.AR further relied upon the judgment passed by the ITAT, Ahmedabad Bench in the case of Amarshiv Construction Vs DCIT in ITA

Heard parties. We have also carefully considered relevant documents available on record. We find force in the submissions made by the ld.AR. Since it is the paramount object embedded in the section 50C of the Act that in the event the assessee objects to the valuation made by the ld.AO, then the same should be referred to the DVO for obtaining the stamp valuation and to make assessment thereon. However, inspite of repeated requests made by the assessee during 263-proceeindgs as well as before the ld.first appellate authority, the same was not taken into consideration in right prospective, which is bad in the eyes of law, and addition thereon is not liable to be sustained. In this view of the matter, we think it just and proper to set aside the issue to the file of ld.AO with a direction upon him to refer the matter to the DVO and obtain value of stamp duty of the properties in question and to make assessment thereon after giving due opportunity of being heard to the assessee after taking into consideration the evidences available on record and also other evidences, which assessee may wish to refer at the time of hearing. With the above observations, we allow the ground of appeal of the assessee for statistical purpose.

In the result, the appeal of the assessee is allowed for statistical purpose.