SEL RESOURCES LTD,HYDERABAD vs. ITO., WARD-3(1), HYDERABAD
Income Tax Appellate Tribunal, Hyderabad “B” Bench, Hyderabad
प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.
The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income-
Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi,
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SEL Resources Ltd dated 18.02.2025, which in turn arises from the order passed by the Assessing Officer (for short “A.O.”) under Section 147 r.w.s.
144 of the Income Tax Act, 1961 (for short “the Act”) dated
29.03.2022 for A.Y. 2017-18. The assessee company has assailed the impugned order on the following grounds of appeal before us:
“1. In the facts and circumstances of the case and in law the Id. CIT (A) has erred in confirming the action of the Id. AO in completing the assessment u/s 147 of Income Tax Act, 1961. The action of Id. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire assessment order which is passed in gross violation of natural justice.
2. (a) In the facts and circumstances of the case and in law the Id.
CIT(A) has erred in confirming the action of the Id. AO in taxing a sum of Rs.1,84,99,000/- as Short Term Capital Gain in the hands of the assessee. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs.1,82,40,172/-.
(b) In the facts and circumstances of the case and in law the Id. CIT(A) has erred in confirming the action of the Id. AO and adopting the market value of Rs.3,20,20,000/-. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the addition being illegal and without following the prescribed procedure of law.
(c) In the facts and circumstances of the case and in law the Id. CIT(A) has erred in confirming the action of the Id. AO in applying the provisions of section 50C of the IT Act 1961, and adopting the sale consideration (stamp duty value) at Rs.3,20,20,000/- against the actual sale consideration of Rs.2,14,73,862/-. The action of the Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by accepting the sale consideration at Rs.2,14,73,862/-.
3. AO erred in adding this income though the documentary evidence for sale of the property is for Rs.2,14,73,862 has been submitted during the scrutiny proceedings. Further Appellant has also requested the AO to refer the matter to valuation officer in order to obtain the fair value of the property on the plea of the property was lying closed for several years and was in very bad condition at the time of sale. AO erred in 3
SEL Resources Ltd completing the assessment stating, the valuation report was not received till the date.
4. The AO for the same property assessed the value (cost) as Rs.1,98,09,900 in the AY2014-15 and issued the assessment order for which also the appellant is preferring an appeal. AO erred in arriving at the addition amount of capital gain also.
5. The AO ought to have appreciated that the Appellant's request of referring the matter to valuation officer and would have completed the assessment upon receiving the fair value as per valuation officer.
6. The AO failed to appreciate that this was a case of distress sale wherein the sale consideration was pre-decided and was not as per the wishes of the seller and thus section 50C cannot be applied in such a scenario,
7. The Appellant submits that Section 50C cannot be applied in an automatic manner. Section 50C was introduced on to the statute to curb the inflow of cash on sale of any immovable property over and above the amount mentioned in the sale deed. However, wherein the surrounding circumstances are such that it could be established that there is no chance of assessee receiving any consideration in cash, as in the present case, then there cannot be applicability of Section 50C. In this regard, reliance is placed on the below mentioned judicial pronouncements: -
1. Wenceslaus Josoph D'Souza, ITA No. 4732/Mum/2017 [Mumbai - 1-
7 ITAT]
2. KrithikaLingappan, ITA No. ITA No.2959/Chny/2018 [Chennai 8-20
ITAT]
3. Hari Om Gupta [2017] 82 taxmann.com 398 (Lucknow - Trib.) 21-27
4. KrishiUtpanna Bazar Samittee, ITA No.2043/PN/2012 [Pune - 28-37
ITAT]
5. Southern Steel Ltd., ITA No. 1220/Hyd/2016 [Hyd - ITAT] 38-46
Even otherwise, A specific request was made to the lower authorities, during the course of assessment proceedings, to refer the case for valuation to DVO as prescribed in u/s 50C (2) of the Income Tax Act,
1961. 8. However, Id. AO though referred it to the DVO but completed the assessment even before receiving the report from the DVO stating that the case was getting barred by time.
9. Thereafter Id. AO calculated the capital gain by taking the sale consideration (stamp duty value) as Rs.3,20,20,000/-.
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SEL Resources Ltd
Ld. AO has referred the case to the valuation officer, Ld. AO, discharging the quasi-judicial function, was duty bound to refer the matter to the valuation officer u/s 50C(2) based on the claim made by the assessee Reliance is placed on the Order of the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal [2014] 47 taxmann.com 158 (Calcutta) in which it was held that ".... For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub