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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य लेखा सद�य,राजे�� के अनुसार लेखा सद�य लेखा सद�य राजे�� के अनुसार राजे�� के अनुसार -Per Rajendra,AM: राजे�� के अनुसार Challenging the order dated 2/11/2015 of CIT(A)-12, Mumbai, the assessee has filed the present appeal. Assessee -an individual, filed his return of income on 31/7/2008 declaring total income at Rs.87.46 lakhs. Assessment u/s. 143(3) was completed on 31.12.2010. Later on the AO issued a notice u/s. 148 on 04/03/2013 as he was of the opinion that taxable income had escaped assessment. He completed assessment u/s. 143(3) r.w.s. 147 of the Act on 15/01/2014 determining the income of the assessee at Rs.91.55 lakhs.
Effective Ground of appeal is about computation of Long Term Capital Gain (LTCG) as per the provisions of section 50C (3) of the Act. During the reassessment proceedings the AO observed that the assessee had sold a property at Rs.25 lakhs, that as per the sale deed for stamp duty purposes the value of the property was shown at Rs.1.18 crores, that the capital gain arising out of the sale were not disclosed in the return of income.He referred the matter to the valuation cell of the department for estimating the value of the property to be adopted u/s. 50C of the Act. As the valuation report was not received till the completion of assessment proceedings so, he mentioned that remedial action, if necessary would be taken after receipt
406/M/16 Ramkishan A. Devidayal of the report. After receiving the report the AO observed that valuation officer had valued the property at Rs.3.03 crores, that the assessee’s share in the property was 50% i.e. Rs.1.51 crores. The AO issued notice to the assessee in that regard. After considering the submission of the assessee the AO held that while determining the value of the property, the valuation officer had considered all necessary details,that he had considered the sale instances of the area, that the valuation officer had adopted the rates based on comparable sales and with reference to Ready Reckoner of year 2007. Accordingly, the AO recomputed the LTCG taking the value of the property at Rs.3.03 crores wherein the assessee had 50% shares.
3.Aggrieved by the order of AO, the assessee preferred an appeal before the First Appellate Authority (FAA) and made submissions. After considering the available material the FAA held that the order of the AO was in accordance with the provisions of law, that he had obtained a report from District Valuation Officer (DVO), that he computed the LTCG after considering the provisions of section 50C of the Act, that the DVO had adopted the correct rates.Finally she upheld the order of the AO.
4.Before us, the Authorised Representative (AR) argued that there was no justification for adopting the value estimated by DVO, that the assessee had adopted the value as per the stamp duty valuation. He referred to provisions of section 50C(3) of the Act.The Departmental Representative (DR) left the issue to the discretion of the Bench.
5.We have heard the rival submissions and perused the material before us. We would like to reproduce the provisions of Section 50C(3) of the Act and the same read as under :-
“(3).Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted of assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.”
406/M/16 Ramkishan A. Devidayal In our opinion, the provisions of section are very clear and provide for applying the stamp duty valuation and not valuation made by the DVO.Therefore, reversing the order of the FAA we decide the effective Ground of appeal in favour the assessee .