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Income Tax Appellate Tribunal, ‘D’ BENCH : CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI INTURI RAMA RAO]
आदेश / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER
This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-Puducherry (‘CIT(A)’ for short) dated 14.03.2018 for the Assessment Year (AY) 2014-2015.
ITA No.1671/2018 :- 2 -:
2. The Assessee raised the following grounds of appeal:
‘’1. The CIT(A) has erred in law and in fact in not considering that the Market Value mentioned in the sale deed is to arrive at the stamp duty purposes and the same cannot be considered as the Sale value of the property as transaction value is different.
The assessing officer is wrong in demanding Rs. 4,03,780 without considering the fact that various High Courts have decided the cases in favour of the assessee with regard to the provisions of Section 50C on the same set of facts.
3. The assessing officer ought to have referred the case to valuation officer before confirming addition. If the reference is not made, then the assessment is null and void as the assessment was completed on 26.12.2016. Whereas the reference to the valuation officer is made on 01.06.2017. The Hon’ble ITAT of Delhi in the case of Income Tax Officer Vs. M/s Aditya Narain Verma (HUF) has held that “When the assessee claimed before the Assessing officer that the value adopted by the stamp valuation authority under sub section (1) exceeds the fair market value of the property adopted by assessee as on the date of transfer, the Assessing officer should have referred the valuation of the capital asset to a valuation officer instead of adopting the value taken by the state authority for the purpose of stamp duty. The very purpose of the legislature behind the provisions laid down under sub section (2) to Section 50C of the Act is that a valuation officer is an expert on the subject for such valuation and is in a better position than the Assessing Officer to determine the valuation. Thus, non-compliance of the provisions laid down under sub section (2) by the Assessing Officer cannot be held valid and justified”.
Also, the Hon’ble High Court of Punjab and Haryana in the case of Commissioner of Income Tax vs. ChandniBhuchar (2010) 229 CTR (P&H) 190 has held that “In the absence of any admissible evidence, valuation done by the Stamp Duty authorities could not be taken as actual sale consideration and the value shown in the sale deed to be accepted.” On the above grounds and other grounds that may be adduced at or before the time of hearing the order of the CIT (A) be set aside and the value of the assessee be accepted’’.
The brief facts of the case are as under:
The appellant is an individual deriving income from running hospital. The return of income for the AY 2014-15 was filed on ITA No.1671/2018 :- 3 -:
18.09.2014 disclosing total income of � 77,91,570 /-, which includes long term capital gains arising on sale of land of �54,54,896/-. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Villupuram Circle, Villupuram vide order dated 26.12.2016 passed u/s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) after making addition of �10,58,000/-.
While computing capital gains arising on sale of land invoking the provisions of Section 50C of the Act. During the course of assessment proceedings when Assessing Officer had proposed to adopt the guideline value for stamp duty purpose as sales consideration, assessee had claimed that fair market value is less than the guideline value adopted for stamp duty purpose and therefore the matter be referred to the DVO, but the Assessing Officer without referring to the DVO had proceeded with framing the assessment order.
Being aggrieved by the above addition, an appeal was preferred before ld. CIT(A), who vide impugned order confirmed the addition.
Being aggrieved by the order of the CIT(A), the appellant is 5. in appeal before us in the present appeal.
We heard the rival submissions and perused the material on 6. record. The provisions of Section 50C of the Act mandates that when
ITA No.1671/2018 :- 4 -: assessee objects to adoption of guideline value for stamp duty purpose, the Assessing Officer is duty bound to refer the matter to the DVO. In the present case, undisputedly, the Assessing Officer had declined to refer the matter to the DVO. Therefore we remit the matter back to the file of the Assessing Officer for denovo assessment in accordance with law. Accordingly, the appeal of the assessee is partly allowed for statistical purpose.
In the result, the appeal filed by the assessee is partly 7. allowed for statistical purpose.
Order pronounced on 4th day of September, 2019, at Chennai.