SHRI MAYUR B. CHOKSI,,VADODARA vs. INCOME TAX OFFICER,, VADODARA

This appeal by the Assessee is directed against the order of the Ld. CIT(A)-4, Vadodara dated 06.01.2015 pertaining to A.Y. 2010-11 and following grounds have been taken:

2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has not issued show cause notice to the assessee for making addition of Rs. 20,57,672/- U/s. 50C of the Income Tax Act, 1961 on account of STCG.

The facts of the case are that the assessee derived salary from RSA Marketing, Akota, Baroda. During the year under consideration, as per representative of the assessee Falguni Shah C.A. submitted letter dated 07/02/2013 snowing working of Short Term Capital Loss amounting to Rs. 3,11,502/- on sale of immovable property at Rustampura, Surat. Also enclosed sale deed amounting to Rs. 66,66,000/-purchased property at Rustarnpura Surat registered at Ward no.2 note no. 647/B/l total 189.4 sqr. var made on 26/06/2008, with seven persons. The investment, made by the assessee amounting to Rs. 8,32,950/- at 12.49% of total consideration. The stamp duty shown in sale deed Rs. 3,27,000/- stamp charges and registration fees Rs. 67,010/-. Thus total Rs. 3,94,010/- expended by the assessee and seven persons. Therefore Rs. 49,210/- are to be paid by the assessee on the part of stamp charges and registration fees at 12.49% of total expended Rs. 3,94,010/-. The assessee also paid construction expenses to Shri. Jay Vijay Construction Co. amounting to Rs. 16,12,500/-. 3. Also enclosed five sale deeds of Rs. 42,20,000/- each dated 26/05/2009, sale considerations of Rs. 2,11,00,000/-(Rs. 42,20,000/- X 5). In which the assessee received sale consideration of Rs. 21,85,000/- (Rs. 4,37,000/- X 5) being his share at 10.35%.

In response to that the assessee's representative C.A. Falguni Shah replied dated 26/03/2013 that our client has received only Rs. 4,37,000/-i.e. 10.35% of the whole consideration which the same is deposited in his account. Further informed that the sale value of Rs. 72,21,608/- as given by the sub-registrar Surat-2 Udhana, is not to be considered as the opponent purchaser of the said property must have paid stamp duty a higher rate. We have not received any amount of Rs. 72,21,608/- as mentioned in Jantri Value. Also submitted index-2, shown consideration ground floor property at Rs. 42,20,000/-. Also added that the details working of short term capital loss given with proper evidence and justification of every figure considered has already been given. Also added as per note sheet dated 26/03/2013 that the assessee and representative C.A. Falguni Shah agree to furnish further details on 28/03/2013. The same is not furnished.

The assessee and other sold the property situated at Rustampura Surat Ward No.2, Note no. 646/A & 647/B/l constructed building in five parts on 26/05/2009 to Salasar Polyfab Pvt. Ltd. Surat in different sale deed as below: 1. Ground Floor 2293.60 sqr Ft. 2. First Floor 2293.60 sqr. Ft.

As per sub-registrar office Surat-2 Udhana sale consideration shown Rs. 72,21,608 /-instead of Rs. 42,20,000/- of each five sale deed dated 26/05/2009 amounting to Rs. 3,61,08,040/-(Rs. 72,21,608/X 5) as sale consideration. The sale deed and transfer of capital assets made by way of registration with the stamp duty authority sub-registrar Surat- 2, Udhana. The State Govt. leavy stamp duty on transfer of immovable properties by way of user of stamp papers of different values to be utilized for recording transactions of immovable properties. It is commontendency of people to avoid payment of taxes and duty as far as possible at a no amount by way of showing lesser amount of consideration in the stamp paper. In order to secure proper stamp duty the State Govt. has appointed stamp valuation authority. The main function of value authority is to prepared valuation tables showing area and its far market value so that the administrative machinery engaged in collection of stamp duty could have a ready reference to charge stamp duty irrespective of the amount of consideration shown in the sale deed. The sub registrar to not register the sale deed unless and until the stamp duty is paid according to valuation table irrespective of amount of sale consideration shown in the sale deed. The stamp valuation authority authorized by Act the valuation is fixed by it are on the basis of consideration of all relevant factors effecting the valuation looking to development of area growth of organization and also the higher transaction recorded in respect of any area. The valuation shown in valuation table is mandatorily required to be taken in to consideration under the provision of 50C of the I.T. Act 1961. I therefore take

Against the order of ld. A.O., assessee preferred first statutory appeal before the ld. CIT(A) but to no avail.

We have gone through the relevant record and impugned order. Assessee having income from Salary, Short Term Capital Loss & Bank F.D. Interest etc. Assessee filed the return of income for A.Y. 2010-11 on 02.04.2011 declaring total income of Rs. 92,400/-. During the course of assessment, appellant filed all necessary documents and detailed submissions and during assessment proceeding, assessee raised an objection towards valuation of the property. But A.O. did not bother to refer matter to the DVO. In appellant proceedings at page no. 11 at Para 6.5 ld. CIT(A) clearly mentioned that assessee’s only objection to application of section 50C is that the Assessing Officer did not refer his case to the Valuation Officer for determination of Fair Market Value because despite the fact that appellant raised an objection before the lower authorities for referring the mater to DVO for determination of Fair Market

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