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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘A’
Before: SHRI PRAMOD KUMAR & SHRI RAJPAL YADAV
-आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘A’
BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER आयकर अपील सं./ ITA No.592/Ahd/2014 �नधा�रण वष�/Asstt. Year: 2010-11 Mukesh Natvarlal Nagrawala Vs. ACIT(OSD) Garbada Crossing Panchmahal Range, Godhra. Indore Road Dahod 389 151. PAN : ABBPN 0202 B
अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)
Assessee by : Shri S.N. Divetia, AR Revenue by : Shri Mudit Nagpal, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 05/03/2018 घोषणा क� तार�ख /Date of Pronouncement: 15/05/2018 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of ld.CIT(A)-VI, Baroda dated 1.11.2013 passed for the Asstt.Year 2010-11.
Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.44,24,800/- in the computation of short term capital gain arising to the assessee.
Brief facts of the case are that the assessee has filed return of income on 14.8.2010 declaring total income at Rs.27,84,468/-. The assessee has sold four pieces of land through four sale deeds
ITA No.592/Ahd/2014 2 of different dates during the year. The aggregate sale consideration shown by the assessee is of Rs.7.75 lakhs. The ld.AO has observed that stamp duty valuation authority has valued value of this property at Rs.51,99,800/-. With the aid of section 50C, the ld.AO adopted the sale consideration for the purpose of computing gain under section 48 equivalent to the amount on which stamp duty was paid. In other words, he replaced the actual sale consideration alleged to have been received at Rs.7.75 lakhs with Rs.51,99,800/-. He made addition of Rs.44,24,800/-. Appeal to the CIT(A) did not bring any relief to the assessee.
The ld.counsel for the assessee submitted that sub-section (2) of Section 50C authorise the assessee to make a request to the AO for referring the matter to the valuation officer for determining fair market value of the property on the date of transfer. In other words, the case of the assessee is that if an assessee disputed determination of sale value according to the stamp duty valuation, then the matter would be referred to the DVO for determining FMV and after that report, the ld.AO was required to adopt the consideration of the capital assets for the purpose of computing capital gain. He further contended that no opportunity was given to the assessee for making an application under section 50C(2), and therefore, both orders deserves to be set aside.
The ld.DR, on the other hand contended that the assessee himself has never raised any objection and has not filed application before the AO.
ITA No.592/Ahd/2014 3 6. We have duly considered rival contentions and gone through the record. Section 50C provides that where the consideration received or accruing as a result of transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall for the purposes of section 48, be deemed to be the full value of the consideration. In other words, full consideration mentioned in section 48 is to be replaced by the consideration on which value of the property was adopted for the purpose of payment of stamp duty. However, sub-section (2) of section 50C provides that where (a) the assessee claims before AO that value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; or such value has not been disputed in any appeal or revision before any authority or court, the AO may refer the valuation of the capital assets to a Valuation Officer. It is pertinent to observe that the ld.AO ought to have given an opportunity to the assessee for making an application for the purpose of section 50C(2) of the Act. When the assessee has disputed adoption of value equivalent to the amount on which stamp duty was paid, then the ld.CIT(A) itself ought to have called for a report under section 50C(2) of the Act. The failure of the ld.Revenue authorities for not providing assessee an opportunity for getting the value of the capital asset determined by the DVO is an irregularity which deserves to be rectified. Therefore, we allow the appeal of the assessee; set aside both the orders and restore this issue to the file of the AO for re- adjudication. The ld.AO shall make reference under section
ITA No.592/Ahd/2014 4 50C(2) to the DVO and obtain report of the DVO for deciding the value required to be deemed as full sale consideration for the purpose of computation of capital gain. The appeal of the assessee is allowed for statistical purpose. 7. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 15th May, 2018. Sd/- Sd/- (RAJPAL YADAV) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER