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Income Tax Appellate Tribunal, ‘ B’ BENCH : CHENNAI
Before: SHRI D. KARUNAKARA RAO & SHRI CHALLA NAGENDRA PRASAD]
आदेश / O R D E R
PER D. KARUNAKARA RAO, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income-tax (Appeals-V), Chennai, dated 8.10.2014, for assessment year 2008-09.
At the outset, bringing our attention to all the grounds of 2. appeal in general and Ground Nos.4 & 5 in particular, the ld. Counsel
ITA No.2971/14 :- 2 -: for the assessee submitted that this is a case where assessee sold a long term capital asset and the capital gains were offered to tax in the return of income. The assessee sold a property for a sum of ` 80 lakhs. However, in the assessment, the Assessing Officer invoked the provisions of section 50C of the Act and the sale consideration of `1,07,06,400/- was considered as the deemed sale consideration instead of `80 lakhs. Bringing our attention to para 4 of the assessment order, the ld. Counsel for the assessee demonstrated the submissions made before the Assessing Officer giving the reasons for selling property for only ` 80 lakhs, the lesser consideration. .
However, the Assessing Officer ignored the said submission of the assessee and the reasons for lesser consideration and proceeded to invoke the provisions of section 50C of the Act mechanically. The Assessing Officer did not refer the property in question to the valuation authorities as mentioned in sub-section 2 of section 50C of the Act.
In first appellate proceedings before the CIT(A), though there was no formal ground raised relating to request for making reference to the valuation cell, Ground No.3 was raised in Form No.35 objecting to adoption of the guideline value. The CIT(A) has not directed the Assessing Officer for making a reference to the valuation cell before finalizing the appeal.
ITA No.2971/14 :- 3 -:
In the backdrop of above facts, the ld. Counsel for the assessee requested for remanding the issue to the Assessing Officer with the direction to the Assessing Officer for making a reference to the valuation cell as per the provisions of section 50C(2) of the Act. It is the submission of the assessee that the Assessing Officer needs to refer the property to valuation cell when the SRO price is adopted against the lesser sale consideration offered in the return of income.
To support the same, ld. Counsel filed a copy of the order of the Tribunal in the case of GWL Properties Ltd vs ITO(OSD) in I.T.A.No.409/Mds/2013 for assessment year 2005-06 dated 15.5.2015, wherein the Tribunal underlined the need for making a reference when the assessee made an objection to the Assessing Officer’s action in adopting the provisions of section 50C of the Act in respect of property. He also filed a judgment of the Hon'ble Jurisdictional High Court in the case of S. Muthuraja vs CIT [2014] 369 ITR 483 to support the above.
After hearing the ld. Counsel for the assessee and ld. Departmental Representative for the Revenue and on perusal of the cited decisions before us, we are of the opinion that rejecting the assessee’s objections against adopting the guideline price is not justified without making the impugned property to the valuation cell for valuation purposes. We, accordingly, set aside the order of the ITA No.2971/14 :- 4 -:
CIT(A) and direct the Assessing Officer to make a reference to the Departmental Valuation Officer as per the provisions of section 50C(2) of the Act. Regarding the other grounds raised in the appeal, we find it is premature to adjudicate the same as Ground Nos. 4 & 5 are allowed for statistical purposes. Accordingly, all the grounds raised in the appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for 5. statistical purposes.
Order pronounced in the open court on 25th of May, 2015, at Chennai.