SUMAN PROPERTIES,PUNE vs. INCOME-TAX OFFICER, WARD - 5(3), PUNE

Heard both parties and perused the materials available on record. The brief facts of the case as emanating from the records are that the assessee is a firm and is a builder and developer. The assessee conducts

Before Commissioner of Income Tax (Appeals), it was contended by the assessee that the Assessing Officer has erred in law as well as in facts by not referring the valuation of flat sales to the Departmental Valuation Officer in terms of section 43CA(2) r.w.s. 50C(2) of the Act. The Commissioner of Income Tax (Appeals) in its impugned order in paras 5.3 and 5.3.3 held that the grounds raised by the assessee in respect of challenging the action of Assessing Officer in referring the matter to DVO for determination of fair market value is not maintainable in the absence of specific ground raised praying to delete the addition made by Assessing Officer in terms of section 43CA of the Act and upheld the order of Assessing Officer.

As aggrieved by the order of Commissioner of Income Tax (Appeals), the assessee before us challenging the action of Commissioner of Income Tax (Appeals) by raising grounds of appeal annexed to Form No. 36 and raised additional ground by way of application dated 22-08-2019 which is placed on record. The main contention of Shri Sharad Vaze, the ld. AR is that the Assessing Officer failed to refer the matter to the DVO for determination of fair market value of the properties in terms of sub-section (2) of section 43CA of the Act.

Admittedly, the value said to have been received by the assessee or agreed to receive on the transfer of properties is less than the value adopted by the Stamp Valuation Authority. The sub-section (1) of section 43CA explains if the consideration received or accruing as a result of transfer of an asset by the assessee is less than the value adopted or assessed or assessable by any authority of State Government is deemed to be full value of consideration received or accruing as a result of such transfer. Further, the sub-section (2) of section 43CA explains that the provisions of sub-section (2) and (3) of section 50C is applicable if the value so adopted or assessed or assessable under sub-section (1) of section 43CA of the Act.

It is pertinent to note that sub-section (2) of section 50C provides jurisdiction to the Assessing Officer to refer the valuation of capital asset to Valuation Officer if the assessee claimed that value adopted or assessed by the Stamp Valuation Authority under sub-section (1) exceeds the fair market value of properties as on the date of transfer. Therefore, it is clear the Assessing Officer ought to have exercised its jurisdiction in referring the valuation of capital asset to a Valuation Officer under sub-section (2) of section 43CA of the Act. We note that the said challenge was not made

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