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Income Tax Appellate Tribunal, ‘E‘ BENCH
Before: SHRI M.BALAGANESH & SHRI SANDEEP SINGH KARHAIL
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2018-19 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) in appeal No. NFAC/2017-18/10012413 dated 10/12/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27/04/2021 by the ld. Income Tax Officer, (hereinafter referred to as ld. AO).
None appeared on behalf of the assessee despite issuance of notice to the assessee. Hence, we proceed to dispose of this appeal on hearing the ld. DR and after perusing the materials available on record.
2.1. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the action of the ld. AO in adopting the value determined by the District Valuation Officer (DVO) as full value of consideration while computing the capital gains in the facts and circumstances of the instant case.
We have heard ld. DR and perused the materials available on record. The assessee is an individual engaged in the business of trading of dress materials and had filed his return of income for A.Y.2018-19 on 28/11/2018 declaring total income of Rs.3,36,480/-. During the period under consideration, the assessee alongwith two parties had sold an immovable property amounting to Rs.24,00,000/- whereas the stamp value authority determined the fair market value of the said property at Rs.82,98,500/-. The assessee had duly declared capital gains of Rs.53,413/- in his income tax returns taking full value of consideration of the property at Rs.24,00,000/-. The ld. AO chose to substitute the consideration figure by adopting the consideration fixed for stamp duty purpose in terms of Section 50C of the Act. The assessee pointed out that he had furnished the Government approved valuation report in support of his contention. The assessee in response to show-cause notice submitted that the stamp duty value is much higher than the actual market value of the property and requested the ld. AO to refer the case of the ld. DVO for determination of fair market value in terms of Section 50C(2) of the Act. Accordingly, the case was referred by the ld. AO to the ld. DVO. The report of the ld. DVO was not received before the completion of assessment and accordingly, the ld. AO computed the capital gains by adopting section 50C value as full value consideration at Rs.82,98,500/-. The report of the ld. DVO was received after the completion of assessment proceedings and was available before the ld. CIT(A). The ld. DVO had valued the property at Rs.56,51,720/-. The assessee pleaded before the ld. CIT(A) that the value determined by the ld. DVO is much higher than the actual consideration and sought to point out certain discrepancies in the valuation report as under:-
(i) The subject mentioned property is situated at Khar (E), Nirmal Nagar which is away from Khar station from 1.5 kms and 2 kms from Bandra Station; (ii) Entire Khar (E) area is dominated by slums having population from low income and middle income group; (iii) No parking area is available in the society which is a Slum Rehabilation Authority (SRA); (iv) There are no shopping complexes, schools, hospitals in the nearby location; (v) Access to the building is from service road which is not a direct access; (vi) The sale instances taken by DVO are at different areas far away from the building; (vii) The building is not having an occupation certificate and completion certificate and therefore, the buyer would not be entitled for the housing loan; (viii) There has been some change in the survey number at the time of purchase and at the time of sale.
3.1. We find that the ld. CIT(A) had directed the ld. AO to re-compute the capital gains by adopting the consideration figure as determined by the ld. DVO at Rs.56,51,720/- in terms of Section 50C(2) of the Act. We find that the ld. AO had referred the valuation of the property to the ld. DVO at the behest of the assessee during the course of assessment proceedings. Merely because the said valuation report of the ld. DVO is not conducive to the assessee, the assessee cannot take a plea that the said value cannot be followed by the lower authorities. Infact we find that the assessee had only pointed out certain defects before the ld. CIT(A) in a general and mechanical manner which is not justified with some facts and figures. We find that the ld. CIT(A) had directed the ld. AO to re- compute capital gains by considering the valuation report of ld. DVO which is strictly in consonance of provision of Section 50C(2) of the Act. We find that the provisions of Section 50C of the Act creates a deeming fiction wherein the value determined by the stamp valuation authorities or the value determined by the ld. DVO u/s.50C(2) of the Act, as the case may be, should be deemed to be treated as the full value of consideration for the purpose of computation of capital gains. This is what has been done by the ld. CIT(A) in the instant case. Hence, we hold that the order passed by the ld. CIT(A) is in accordance with the statute and does not warrant any interference. Accordingly, the grounds raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced on 04/08/2022 by way of proper mentioning in the notice board.