G M KENJALE CONSTRUCTION PVT.LTD,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1(2),, PUNE

PER R.S.SYAL, VP :

This appeal by the assessee is directed against the order dated 05-04-2017 passed by the CIT(A)-1, Pune in relation to the assessment year 2014-15.

2 ITA No. 1930/PUN/2017 G M Kenjale Constructions Pvt. Ltd.,

engaged in the business as Builder and Developer. The

assessee recorded sale transactions of certain flats and

computed income for the year accordingly with such agreed

values. The AO invoked the provisions of section 43CA of the

Act, introduced by the Finance Act, 2013 w.e.f. 2014-15. He

ascertained the Value in Index/Market value of flats sold by the

assessee. The difference between the amount as per the

agreements and the Value in Index/Market value of the flats

sold by the assessee at Rs.29,65,290/-, was added. No relief

was allowed in the first appeal.

as under :

“Alternatively and without prejudice to Ground No.1 to 3, appellant contends that the ld. I.T. Authorities erred in law and on facts in adopting Stamp Duty Valuation as full value of consideration instead of actual sales consideration; without referring the matter to the Valuation Officer as prescribed in Section 43CA of the ITA, 1961.”

relevant material on record on the admission of the additional

ground. The instant additional ground raises a pure question of

3 ITA No. 1930/PUN/2017 G M Kenjale Constructions Pvt. Ltd.,

law, which does not require any fresh investigation of facts.

The same is admitted in view of the judgment of Hon’ble

Supreme Court in National Thermal Power Company Ltd. Vs.

CIT (1998) 229 ITR 383 (SC).

assessee’s claim is that the authorities below erred in adopting

the stamp duty valuation as full value of consideration

u/s.43CA of the Act without referring the matter to the

Departmental Valuation Officer as prescribed u/s.43CA.

Section 43CA is analogous to section 50C of the Act with the

only difference that whereas the former applies to the

computation of cost of acquisition of certain assets other than

‘Capital gains’, the later provision applies in the computation of

income under the head `Capital gains’. Section 43CA provides

that where the consideration received or accruing as the result

of transfer of an asset (other than capital asset), being, land or

building or both, is less than the value adopted or assessed or

assessable for stamp duty, then such value shall be deemed to

be the full value of consideration received or accruing as a

result of transfer. Sub-section (2) provides that the provisions

4 ITA No. 1930/PUN/2017 G M Kenjale Constructions Pvt. Ltd.,

of sub-sections (2) and (3) of 50C shall, so far as may be, apply

in relation to the determination of the value adopted or assessed

or assessable under sub-section (1) of 43CA. Thus it is evident

that sub-section (2) of section 50C has been bodily incorporated

in section 43CA, which provides that without prejudice to

provisions of sub-section (1), where the assessee claims before

the AO that the value adopted or assessed or assessable by the

stamp valuation authority exceeds the fair market value of the

property as on the date of transfer, the AO may refer the matter

to the DVO, which shall then be applied as full value of

consideration.

section 50C(2) is applicable but the assessee did not make any

request to the AO for making reference to the DVO. In this

regard, the ld. AR has relied on the judgment of the Hon’ble

Calcutta High Court in the case of Sunil Kumar Agarwal Vs.

CIT (2014) 47 taxmann.com 158 (Cal.) in which it has been

held in para 8 that: “Even in a case where no such prayer is

made by the learned advocate representing the assessee, who

may not have been properly instructed in law, the assessing

5 ITA No. 1930/PUN/2017 G M Kenjale Constructions Pvt. Ltd.,

officer, discharging a quasi judicial function, has the bounden

duty to act fairly and to give a fair treatment by giving him an

option to follow the course provided by law”. On a

consideration of the above precedent in juxtaposition to the

additional ground raised before the Tribunal, we are of the

considered opinion that the ends of justice would meet

adequately if the impugned order is set-aside and the matter is

restored to the file of the AO. We order accordingly and direct

the AO to frame the assessment afresh as per law after allowing

reasonable opportunity of hearing to the assessee. In such

assessment, he will take into consideration the discussion made

above qua the making of a reference to the DVO for

determination of the fair market value of the property

transferred by the assessee, which is not a capital asset.

Order pronounced in the Open Court on 16th December, 2019.

Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 16th December, 2019 सतीश

6 ITA No. 1930/PUN/2017 G M Kenjale Constructions Pvt. Ltd.,

आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-1, Pune 4. The Pr. CIT -1, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “बी” / DR ‘B’, ITAT, Pune गाड� फाईल / Guard file 6. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 10-12-2019 Sr.PS 2. Draft placed before author 11-12-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *