2009 (3) TMI 1009 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding valuation of property for AY 2003-04.

Valuation of property:
The assessee declared sale consideration of land at Rs. 1,51,00,000, but stamp valuation authority assessed it at Rs. 1,81,08,792. Assessee's reasons for lower consideration included financial difficulties and NOC for sale at Rs. 1,49,90,000. Despite objections, AO adopted higher valuation, resulting in capital gain calculation.

Section 50C of IT Act:
AO's rejection of assessee's explanation led to appeal. Counsel argued for reference to DVO as per section 50C(2) for correct valuation based on market rate at date of sale. Tribunal cited Meghraj Baid vs. ITO case, emphasizing DVO referral in case of disagreement on property valuation.

Tribunal's decision:
After analyzing section 50C(2), Tribunal directed AO to refer valuation to DVO for determining accurate consideration of property sold by assessee. CIT(A) order was set aside, and the matter was remanded to AO for valuation as per section 50C(2). Ground No.6 was not pressed during the hearing and was dismissed. The appeal was allowed for statistical purposes.

Conclusion:
The Tribunal's decision highlighted the importance of following section 50C provisions and referring valuation disputes to DVO for accurate property consideration determination. The case serves as a precedent for resolving valuation discrepancies in property transactions.