DILIP V MOHINDRA,MUMBAI vs. ITO WD 19(1)(3), MUMBAI

O R D E R PER RAJESH KUMAR, AM Appeal by the assessee is directed against the order dated 17.2.2014 passed by the ld. CIT(A)-22, Mumbai for the assessment year 2007-08. 2. Only issue raised in all these grounds of appeal

pertains to upholding the order of the AO by the ld. CIT(A) qua adopting the value of the property as per Stamp Valuation Authorities for the purpose of section 50C of the Income Tax Act, 1961 by ignoring the fact that the lower authorities have not referred the matter to the Valuation Officer under section 50C(2) of the Act before 2 substituting the stamp value as per stamp valuation authority as consideration for the purpose of calculating the capital gain.

3. Facts of the case are that the assessee filed his return of income on 3.7.2007 declaring total income of Rs.2,23,680/-. The return was processed under section 143(1) of the Act. Thereafter the case of the assessee was selected for scrutiny and the notices under section 143(2) and 142(1) were sent to the assessee and duly served upon him. During the course of assessment proceedings, the AO found that the assessee has shown Long Term Capital Gain of Rs.1,33,450/- on sale of Plot at Bandra on a sale consideration of Rs.3,00,00,000/- which was purchased on 14.8.1953 in co-ownership and the assessee’s share was 1/3rd. The value of the said flat as on 1.4.1981 was Rs.9,24,250/- as per the register valuer report which was indexed and capital gains was calculated as under : Date of sale 24.11.2006 Total sale consideration as per agreement Rs.1,00,00,000 [1/3rd share] Date of purchase of flat 14.8.1953 Value of plot as on 1.4.1981 Rs.9,24,250= 1/3rd share Rs.3,08,083 Index cost of the plot of land 3,08,083 x 519 Rs.15,98,950 100 Long term capital gain Rs.84,01,050 Less deduction u/s 54 Rs.82,67,600 Taxable long term capital gain Rs.1,33,450/- The assessee claimed deduction under section 54 of the Act to the tune of Rs.82,67,600/- and offered remaining capital gain of Rs.1,33,450/- to tax. The 3 AO during the course of assessment proceedings noted that the value of the said property as per stamp valuation authority was Rs.3,84,00,000/- and accordingly issued show cause notice to the assessee as to why the value of the property should not be taken as per the value as per