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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 73/JP/2017
PER SHRI KUL BHARAT, JM.
This appeal by the Assessee pertaining to Assessment Year 2011-12 is
directed against the order of Ld. CIT(A), Kota, dated 21.10.2016.
The assessee has raised the following grounds of appeal:-
“1. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) Kota erred in confirming the action of the AO in making addition of Rs. 52,13,376/- in an order passed u/s 143(3)/148 of the Income Tax Act 1961 by taking the sales consideration of the agricultural land sold at Rs. 89,51,250/- instead of Net Sales consideration of Rs. 23,73,473/- (shown by the assessee in the return of income filed on 07.05.2012) for the purpose of computing deduction under section 54F of the IT Act, 1961, 1961 [GOA No. 1.1 /CIT (A)].
On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) Kota erred in confirming the
2 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
action of the AO taking the cost of construction of the house in the name of the assessee at Rs 16,64,000/- instead of Rs 16,75,200/- for the purpose of computing deduction under section 54F of the IT Act 1961, [GOA No. 1.2 /CIT (A)].
On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) Kota erred in confirming the action of the AO by not taking the cost of construction of the house on the plot in the name of the son of the assessee amounting to Rs 909,500/- for the purpose of computing deduction under section 54F of the Act arbitr7rily. [GOA No. 1.3 /CIT (A)].
On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) Kota erred in confirming the action of the AO making addition of Rs. 90,000/- as undisclosed short term capital gain without application of mind and without considering the submission made on 24.02.2014 arbitrarily. [GOA No. 1.3 /CIT (A)].
That the appellant craves to add, delete, alter and amend or modify any of the grounds of appeal either before or at the time of hearing.”
1.1 During the course of hearing, Ld. Counsel for the assessee had also taken an
Additional Ground that reads as under:-
“Ground:- That in the facts and circumstances of the case both Assessing Officer and appellate Authority grossly erred in law and facts in not referring the valuation to the Valuation Officer.”
Briefly stated the facts are that, the assessment was reopened by issuing
notice u/s 148 dated 24/01/2013 on the basis that I&CI, Jaipur intimated the AO
about sale of agricultural land by the assessee. It was also intimated that the DLC
rate as per the Sub-Registrar was at Rs. 1,79,02,500/- and in respect of the shares
of the assessee it was Rs. 89,51,250/-. Subsequently, the assessment was framed
u/s 143(3) read with section 148 thereby the Assessing Officer computed total
income of Rs. 53,05,484/- after computing the capital gain on the basis of the DLC
3 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
value of the property. Aggrieved by this, assessee has preferred the appeal before
Ld. CIT(A), who after considering the submissions, dismissed the appeal.
Now, the assessee is in further appeal before this Tribunal.
Ld. Counsel for the assessee submitted that Additional Ground may be
decided first. The additional ground raised by the assessee is against not referring
the valuation of property to the DVO despite the assessee had disputed the value
adopted by the Stamp Valuation Authority. Ld. Counsel for the assessee drew our
attention to Page No. 3 of the Assessment Order wherein the submissions of the
assessee are reproduced by the Assessing Officer. In support of the contention, the
assessee had disputed value of property adopted by the Assessing Officer. Ld.
Counsel for the assessee reiterated the submissions as made in the written
submission. The written submissions of the assessee are reproduced as under:-
“1. That appellant before A.O. asserted that Fair Market Value in the present case was substantially lower than the DLC rate on the various reasons as recorded in the assessment order (Page 2 and 3 of assessment order). 2. Before CIT Appeal also humble appellant submitted that the transaction of sale was distress sale under dispute as is evident from agreement, Revenue Board order and later compromise (Refer pages 29 to 43 of paper book). Appellant before CIT Appeal also requested for getting the valuation report of valuer. (Refer page 12 of appeal order). It has been submitted as under: "Without prejudice it is submitted that now before your honour the assessee wants to challenge the valuation adopted by the Sub Registrar and a detailed valuation from the Registered Valuer may kindly be called for. It is trite law that the powers of the CIT (Appeal) are coterminous with the powers of the A.O. As such the challenge /
4 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
claim as contemplated under section 50C(2)(a) of the Act required to be made before the AO is now being made before your honour, which may kindly be accepted and the AO may kindly be asked to get the valuation report from the valuer." Humble appellant submits that in law only assertion or dispute to valuation is sufficient for action under section 50C(2)(a) of the Act. Reference in this regard may be made to the following : S. Muthuraja Vs. Commissioner of Income Tax (2014) 369 ITR 483 (Mad.) Appadurai Vijayaraghavan Vs. Joint Commissioner of Income Tax (2014) 369 ITR 486 (Mad) Sunil Kumar Agarwal Vs. Commissioner of Income Tax (2015) 372 ITR 83 (Cal.)”
4.1 Ld. D/R opposed the submissions and supported the order of the authorities
below.
4.2 We have heard the rival contentions, perused the material available on record
and gone through the order of the authorities below. There is no dispute with
regard to the fact that the Assessing Officer has invoked provisions of Section 50C of
the Act in respect of the value of the property. As per section 50C(1) , in case where
the consideration received or accruing as a result of the transfer by an assessee of a
capital asset, being land or building or both, is less than the value adopted or
assessed (or assessable) by any authority of a State Government for the purpose of
payment of stamp duty in respect of such transfer, the value so adopted or assessee
(or assessable) shall, for the purposes of section 48, be deemed to be the full value
of consideration received or accruing as a result of such transfer and as per Section
50C(2)(a)- where the assessee claims before any Assessing Officer that the value
5 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
adopted for assessed (or assessable) by the stamp valuation authority under sub-
section (1) exceeds the fair market value of the property on date of transfer.
Further, as per Section 50C(2)(b) – the value so adopted or assessed (or assessable)
by the stamp valuation authority under sub-section (1) has not been disputed in any
appeal or revision or no reference has been made before any other authority, court
or the High Court. The Assessing Officer may refer the valuation of the capital asset
to a Valuation Officer.
4.3 There is no ambiguity in the above provisions. Therefore, in our considered
view, when the Assessing Officer adopts full value of consideration u/s 48 of any
property in terms of section 50C(1) of the Act and the assessee makes a claim
before the Assessing Officer that the value adopted by the Stamp Valuation
Authority u/s 50C(2)(a) exceed the fair market value of the property as on the date
of transfer. The AO is required to refer the valuation of the capital asset to
Valuation Officer. In the present case, admittedly, the Assessing Officer has adopted
the full value of the consideration of the property in terms and section 50C(1) of the
Act i.e. the value adopted by the Stamp Valuation Authority for the purpose of
payment of stamp duty qua the transfer of the capital asset. We therefore, set aside
the orders of the authorities below and restore the issue of valuation of property to
the file of the Assessing Officer for decision afresh. The AO would refer the issue of
valuation of property to the Valuation Officer as provided under Section 50C(2) of
the Act. Thus, this additional ground is allowed for statistical purpose.
Now, coming to other grounds of the Assessee’s appeal.
Ground nos. 1 to 4 are against adopting the value of property of Rs.
89,51,250/- and disallowing the claim of deduction 54F of the Act.
6 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
6.1 Ld. Counsel for the assessee reiterated the submissions as made in the
written submission.
6.2 On the contrary, Ld. D/R opposed the submissions.
6.3 We have heard the rival contentions. As we allowed the additional ground of
the assessee’s appeal by observing as under:-
4.2 We have heard the rival contentions, perused the material available on record and gone through the order of the authorities below. There is no dispute with regard to the fact that the Assessing Officer has invoked provisions of Section 50C of the Act in respect of the value of the property. As per section 50C(1) , in case where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed (or assessable) by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessee (or assessable) shall, for the purposes of section 48, be deemed to be the full value of consideration received or accruing as a result of such transfer and as per Section 50C(2)(a)- where the assessee claims before any Assessing Officer that the value adopted for assessed (or assessable) by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property on date of transfer. Further, as per Section 50C(2)(b) – the value so adopted or assessed (or assessable) by the stamp valuation authority under sub- section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court. The Assessing Officer may refer the valuation of the capital asset to a Valuation Officer. 4.3 There is no ambiguity in the above provisions. Therefore, in our considered view, when the Assessing Officer adopts full value of consideration u/s 68 of any property in terms of section 50C(1) of the Act and the assessee makes a claim before the Assessing Officer that the value adopted by the Stamp Valuation Authority u/s 50C(2)(a) exceed the fair market value of the
7 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.
property as on the date of transfer. The AO is required to refer the valuation of the capital asset to Valuation Officer. In the present case, admittedly, the Assessing Officer has adopted the full value of the consideration of the property in terms and section 50C(1) of the Act i.e. the value adopted by the Stamp Valuation Authority for the purpose of payment of stamp duty qua the transfer of the capital asset. We therefore, set aside the orders of the authorities below and restore the issue of valuation of property to the file of the Assessing Officer for decision afresh. The AO would refer the issue of valuation of property to the Valuation Officer as provided under Section 50C(2) of the Act. Thus, this additional ground is allowed for statistical purpose.”
Therefore, we deem it proper to restore these grounds as well to the Assessing
Officer for deciding afresh. Thus, these grounds are allowed for statistical purpose.
Ground no. 5 is general in nature and needs no separate adjudication.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on Thursday, the 2nd day of November 2017.
Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½ (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 02/11/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shri Laxmi Naarayan Malav, Kota. 2. The Respondent- The ITO, Ward- 2(1), Kota. 3. The CIT, 4. The CIT (A) 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 73/JP/2017)
vkns'kkuqlkj@ By order,
सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत
8 ITA No. 73/JP/2017. Shri Laxmi Narayan Malav, Kota.