ITO, NEW DELHI vs. M/S BCI OPTICAL DISC. PVT. LTD., DELHI

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ITA 3293/DEL/2016Status: DisposedITAT Delhi20 September 2021AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the fair market value determined by the DVO should be considered as the full value of consideration for computing capital gains, as per Section 50C(2) and (3) of the IT Act and judicial precedents.

What were the facts?

The assessee sold a property for Rs. 1,80,00,000, while stamp duty was paid on a circle rate of Rs. 4,87,40,480. The DVO determined the fair market value at Rs. 2,04,48,563.

What were the issues?

Whether the DVO's valuation report has primacy over the stamp valuation authority's valuation for the purpose of computing capital gains.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: Sh. Amit ShuklaDr. B. R. R. Kumar

Hearing: 02.09.2021Pronounced: 20.09.2021

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the revenue against the order of ld. CIT (A)-2, New Delhi dated 12.02.2016.

2.

Following grounds have been raised by the revenue:

“1. Whether on the basis of the facts and circumstances of the case, the ld. CIT (A) was right in adopting fair market value determined by the DVO as against the value as per Stamp Valuation Authority.”

2 BCI Optical Disc. Pvt. Ltd. 3. Brief facts of the case are that the assessee company filed its original e-return of income on 27.06.2011 declaring total income of Nil. The assessee is engaged in the business of manufacturing and sales of Compact Discs (CD).

4.

During the year, the assessee sold the property in question for a sale consideration of Rs.180,00,000/- as per the sale deed whereas the stamp duty has been paid on the circle rate of Rs.487,40,480/-. The value determined by the DVO was Rs.204,48,563/-. The AO considered the value of the circle rate on which stamp duty has been paid as the sale consideration and accordingly determined long term capital.

5.

On the other hand, the ld. CIT (A) confirmed the addition taking into consideration, the valuation report of DVO and directed the AO to compute the capital gain accordingly.

6.

Aggrieved with the order of the ld. CIT (A), the revenue filed appeal before us. The issue to be decided is whether the DVO report will have primacy over the stamp valuation authority?

7.

We have gone through the provisions of the Act pertaining to Section 50C(2) and also Section 50C(3) and the judgments of Co-ordinate Bench of ITAT, VSP in the case of Pattabhiram Vs ITO 45 Taxman 141 wherein it was held that the FMV determined by the DVO has to be treated as full value of consideration received by the assessee for the purpose of computing capital gains. We also find that the revenue (AO) in the remand report submitted to the CIT (A) has also not 3 BCI Optical Disc. Pvt. Ltd. brought out any specific and apparent gross error in the DVO’s report to merit its rejection. In view of the judicial pronouncement and the clear provisions of the Act, we decline to interfere with the order of the ld. CIT (A) on this ground.

8.

In the result, the appeal of the revenue is dismissed. Order Pronounced in the Open Court on 20/09/2021.

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