NIHARIKA ESTATES PVT. LIMITED,KOLKATA vs. ITO, WD-3(3), KOLKATA, KOLKATA

This is an appeal preferred by the Assessee against the order of CIT(A)-5, Kolkata dated 26.05.2016 for AY 2007-08.

, it is clear that the assessee is aggrieved by the decision of the AO, not to refer to the DVO before computing the capital gain. Similar plea was raised by an assessee before the Hon’ble Calcutta High Court wherein the jurisdictional High Court vide order in GA No.3686 of 2013, ITAT No.221 of 2013 order dated 13th March, 2014 dealt with the issue similar to that what is being agitated before us. The Hon’ble Calcutta High Court has held that while interpreting clause (a) and (b) of sub-Section 2 of section 50. C of the Act as under :- We have considered the rival submissions advanced by the learned advocates appearing for the parties. The submission of Ms. Ghutghutia that the requirement of clauses a) and (b) of sub-Section 2 of Section 50C has not been met by the assessee, can hardly be accepted. The requirement of clause (b) of sub-Section 2 of Section 50C was evidently met. The only question is whether the requirement of clause (a) of sub-Section 2 of Section 50C was met by the assessee. We have already set out hereinabove the recital appearing in the Deeds of Conveyance upon which the assessee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case then it is difficult to accept the proposition that the assessee had accepted that the price fIxed by the District Sub Registrar was the fair market value of the property. No such inference can be made as against the assessee because he had nothing to do in the matter. Stamp duty was payable by the purchaser. It was for the purchaser to either 2

Niharika Estates (P)Ltd. A.Yr.2007-08 accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub- Registrar, have claimed anything more than the agreed consideration of a sum of Rs.I0 lakhs which, according to the assessee, was the highest prevailing market price. It would follow automatically that his case was that the fair market value of the property could not be Rs.35 lakhs as assessed by the District Sub Registrar. In a case of this nature the assessing officer should, in fairness, have given an option to the assessee to have the valuation made by the departmental valuation officer contemplated under Section 50C. As a matter of course, in all such cases the assessing officer should give an option to the assessee to have the valuation made by the departmental valuation officer. For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. For the aforesaid reasons, the order under challenge is set aside. The impugned order including orders passed by the CIT(A) and the assessing officer are all set aside. The matter is remanded to the assessing officer. He shall refer the matter to the departmental valuation officer in accordance with law. After such valuation is made, the assessment shall be made de novo in accordance with law.

Order pronounced in the Court on 06. 01.2017.