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Facts
The assessee sold two immovable properties for Rs. 1,16,98,200/- but did not file a return of income. The AO reopened the assessment and, after considering a revised computation submitted by the assessee, computed Long Term Capital Gain (LTCG) of Rs. 41,24,990/-. The CIT(A) confirmed this addition.
Held
The AO correctly invoked Section 50C of the Act as the sale consideration was less than the stamp duty value. The assessee's argument that the AO should have referred the valuation to the DVO was rejected, as Section 50C(2) applies only when the assessee claims the stamp duty value exceeds the fair market value, which was not the case here. The assessee himself submitted a revised computation based on stamp valuation.
Key Issues
Whether the addition made by the AO under Section 50C of the Act is justified, and whether the AO was required to refer the valuation to the DVO.
Sections Cited
50C, 54F, 50C(2)
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
Navin Kumar Nathan, The Income Tax Officer, 5/21, 3rd Street, Ganesh Avenue, Vs. International Taxation Ward-2(1), Sakthi Nagar, Porur, Chennai. Chennai – 600 116. [PAN: AFMPN 2327L] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथD की ओर से/ Appellant by : Shri K. Meenakshisundaram, ITP FGथD की ओर से /Respondent by : Shri G. Suresh, JCIT सुनवाई की तारीख/Date of Hearing : 01.07.2024 घोषणा की तारीख /Date of Pronouncement : 20.09.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2014-15 arises out of the order of Learned Commissioner of Income Tax (Appeals), Chennai-16 [hereinafter “CIT(A)”] dated 22.02.2024.
There is a delay of 04 days in filing the appeal by the assessee. The assessee has filed condonation petition stating the reasons for delay in filing the appeal. We have considered the petition of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is condoned accordingly.
The only effective ground in this appeal of assessee is against confirming the addition by Ld. CIT(A) of Long Term Capital Gain (LTCG) of Rs. 43,49,521/-.
The brief facts of the case are that the A.O has reopened the assessment for the reason that the assessee has sold immovable properties for Rs. 1,22,39,737/- and a deposited cash of Rs.1,17,00,000/- in the bank account, but has not filed return of income. The assessee has sold two immovable properties consisting of lands in Plot Nos.8 & 4 vide Document No.7041/2013 & 7042/2013 dated 18.10.2013 registered with SRO, Pammal for a consideration of Rs. 44,22,600/- and Rs. 72,75,600/-. The assessee has received entire sale consideration of Rs. 1,16,98,200/- in cash, but has not filed return of income and shown capital gains. The A.O found that the stamp value of the property sold were Rs.70,00,000/- & Rs.1,10,00,000/-, respectively and therefore, invoking the provisions of Section 50C of the Act and allowing deduction u/s. 54F of the Act on the new property purchased for Rs. 1,29,43,738/-, computed LTCG of Rs. 41,24,990/- in the assessment order. The assessee before the A.O has also submitted the revised computation based on which the A.O has computed the LTCG of Rs. 41,24,990/- and assessed total income of Rs. 43,49,521/-. The Ld. CIT(A) has confirmed the addition as the assessee has not filed any other material evidence and the A.O has computed the income on the basis of revised computation furnished by the assessee himself.
The Ld. Authorized Representative (A.R) of the assessee has argued that the A.O has invoked Section 50C of the Act without referring the valuation to the valuation cell therefore, addition made may be deleted. The Ld. AR has also submitted that the assessee has received only Rs. 1.17 Cr. therefore, for claim of Section 54F of the Act, he could not have made investment up to Rs. 1.80 Cr., the value as per stamp valuation.
The Ld. Departmental Representative has relied on the orders of A.O as well as Ld. CIT(A) and argued that the A.O has computed the income only based on revised computation submitted by the assessee and therefore, the order of Ld. CIT(A) should be upheld.
We have heard the rival submissions, and perused the materials available on record. The assessee has sold two plots for Rs.1,16,98,200/-, but has not filed return of income. The A.O has reopened the assessment by issuing notice u/s. 148 of the Act, but the assessee did not file return of income even in response to notice u/s. 148 of the Act. The A.O in the assessment order has re-computed the income based on the revised computation submitted by the assessee.
The A.O has invoked Section 50C of the Act, which is a special provision for full value of consideration in the cases, where the consideration received or accruing as a result of transfer by the assessee is less than the value adopted by stamp valuation authority therefore, the A.O has correctly invoked the Section 50C of the Act.
As regards to assessee’s arguments that the A.O should have referred the valuation of properties to the Departmental Valuation Officer, Section 50C(2) of the Act clearly stipulates that where the assessee claims before the A.O that the value adopted or assessed by stamp valuation authority exceeds fair market value of the property as on the date of transfer only in those cases the A.O is required to refer the valuation to the Valuation Officer. In the present case, the A.O has not challenged before the A.O, the valuation by stamp value authority rather, he himself submitted the revised computation on the basis of stamp valuation. In view of the above, the Ld. CIT(A) has correctly upheld the order of A.O. Accordingly, the appeal of the assessee is dismissed.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on 20th September, 2024.