M/S. BCI OPTICAL DISC. LTD.,NEW DELHI vs. ITO, NEW DELHI

The grievance of the assessee read as under :- 1. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in not giving a reasonable opportunity of hearing to the appellant, before issuing

Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the AO came to know that the assessee has sold two properties namely at Sonepat Kundli, Haryana and 1- Flag Staff Road, Civil Lines, Delhi. On perusal the sale deed filed by the assessee in respect of property situated at Kundli, Haryana, the stamp duty have been paid for Rs.4,05,20,480/-. However, the AO noticed that the sale consideration have been declared at Rs.1.80 crores.

The assessee was asked to explain why the valuation as per circle rate may not be adopted as deed value for computing capital gain. On receiving no plausible reply the AO proceeded by taking the sale consideration as per stamp duty rate at Rs.4,87,40,480/- and computed long term capital gain at Rs.3,93,68,773/-.

Aggrieved, the assessee agitated the matter before the CIT(A). The CIT(A) directed the AO to call for a valuation report and as per the direction the matter was referred to the DVO for the valuation of the impugned. The DVO valued the property at Rs.2,04,50,000/- instead of Rs.4,87,40,480/-. The assessee was asked to make his submission in response to the DVO report. In its submission the assessee stated that it broadly agrees to the DVO report but the glaring anomalies and overlooking of certain factors, which the DVO has not addressed in his final report, even though the assessee had raised objections.

After considering the facts and the submissions the CIT(A) was convinced that the provisions of Section 50C of the Act squarely apply. However, the CIT(A) found that the value adopted by the DVO is less than what the Stamp Valuation Authority have worked out, therefore, the value worked out as per stamp duty valuation cannot be considered for purpose of calculating capital gain reason and confirmed the assessment by taking the valued property at Rs.2,04,50,000/- as valued by the DVO.

Before us the Counsel for the assessee vehemently stated that as per proviso to section 50C of the Act. The date of agreement should have been taken as the date for the valuation. It is the say of the counsel that the first cheque of advance was received on 05.01.2010 for Rs.1 lac. The second cheque was received on 27.01.2010 for Rs. 10 lacs, the third cheque was received on 25.02,2010 for Rs. 40 lacs and on 13.03.2010 another Rs.40 lacs was received.

The counsel vehemently stated that as per the first proviso to section 50C of the Act, the date of valuation should have been taken as on 05.01.2010.

Per contra the DR strongly supported the findings of the lower authorities. However, stated that the matter may be restored to the files of the AO to take the date of agreement for the purpose of the valuation.

We have carefully considered the orders of the authorities below qua first proviso the section 50 C of the Act. We find force in the contention of the Counsel as per the proviso the date of agreement should be taken as the date for the purpose of valuation. We accordingly restore this issue to the files of the AO. The AO is directed to get the valuation done as on 05.01.2010 and decide issue afresh after affording a reasonable and fair opportunity of being heard to the assessee.

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