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2013 (11) TMI 180 - AT - Income TaxValue of property arrived at by DVO has not been objected to by assessee at earlier stage - Stamp Valuation Authorities have assessed the value of property for stamp duty purposes at Rs.5,23,000/- - As the value adopted by assessee not agreed by A.O, the matter may be referred to the DVO as per section 50C(2) of the IT Act - DVO opined value at Rs.4,14,870/- - This figure was agreed to by the AO in the remand report Held that - Assessee never objected to the valuation report submitted by the AVO at Rs.4,14,870/-. If the assessee was at all aggrieved against the valuation report at Rs.4,14,870/-, the assessee should have raised objection to said valuation report at the proceedings before the ld. CIT(A) or in the remand proceedings before the AO. Since the assessee did not object to the report of DVO filed u/s. 50C(2) of the IT Act, therefore, the assessee could not be allowed to dispute the same report at this stage. DVO in the valuation report has referred to the basis of the circle rate adopted by him as per orders issued by ADM(F)/Sub- Registrar on 15.01.2003 effective at that time on sale of shops No material has been produced against the basis adopted by DVO - If the assessee felt aggrieved against the rate taken by the DVO, it would have been proper for the assessee to raise objection on the basis of some material or evidence before the DVO, before the AO at the remand proceedings or at least before the ld. CIT(A). The assessee did not choose to do anything in the matter and merely raised the objection that since valuation was less than 15% in difference, therefore, no addition should be made. Such a plea was alien to the provisions of section 50C of the IT Act. Further section 50C is a special provision for full value of consideration in certain cases and deals with the transfer of capital asset by the assessee in land or building or both - ld. CIT(A) on proper appreciation of provisions of section 50C and the facts of the case rightly concluded that the valuation of sale consideration is to be taken at Rs.4,14,870/- as per valuation report and since cost of acquisition is admitted by the assessee at Rs.3,85,748/-, therefore, the addition was rightly restricted to Rs.29,122/- - Further, assessee has no evidence to support the plea of payment of brokerage on sale of property, therefore, the claim of assessee for such deduction has rightly disallowed by the ld. CIT(A) Decided against the Assessee.
Issues Involved:
1. Chargeability of capital gains on land and superstructure parts. 2. Application of section 50C(3) regarding the value assessed by the Stamp Valuation Authority. 3. Computation of capital gain based on the value assessed by the Stamp Valuation Authority. 4. Valuation of land part exceeding the value assessed by the Stamp Valuation Authority. 5. Disallowance of brokerage expenses claimed by the appellant. Issue-wise Detailed Analysis: 1. Chargeability of Capital Gains on Land and Superstructure Parts: The appellant argued that the authorities erred in not accepting the value of the land part as assessed by the Stamp Valuation Authority, which separately assessed the value of land and superstructure parts. The authorities below used a combined valuation for capital gains computation, leading to a higher assessment than what the appellant declared. 2. Application of Section 50C(3): The appellant contended that according to section 50C(3), the value assessed by the Stamp Valuation Authority should be considered the full value of the consideration received on transfer. The authorities below deviated from this value, leading to an inflated capital gains computation. The appellant requested a reference to the Departmental Valuation Officer (DVO) as per section 50C(2), which was initially ignored but later directed by the CIT(A), resulting in a DVO valuation of Rs.4,14,870/-. 3. Computation of Capital Gain Based on the Value Assessed by the Stamp Valuation Authority: The appellant claimed that the value of land assessed by the Stamp Valuation Authority at Rs.141,660/- using a circle rate of Rs.6000 per sq. meter should be used for computing capital gains. The authorities below, however, did not adhere to this valuation, leading to a higher assessed value. 4. Valuation of Land Part Exceeding the Value Assessed by the Stamp Valuation Authority: The authorities below assessed the value of the land part higher than the value assessed by the Stamp Valuation Authority, which the appellant argued was incorrect. The CIT(A) eventually adopted the DVO's valuation of Rs.4,14,870/- instead of the Stamp Valuation Authority's Rs.5,23,000/-, leading to a revised addition of Rs.29,122/- to the appellant's income. 5. Disallowance of Brokerage Expenses: The appellant claimed brokerage expenses of Rs.7,700/- paid through an account payee cheque, which was disbelieved by the CIT(A) due to a lack of supporting evidence. The appellant failed to produce any documents to substantiate this claim, leading to the dismissal of this ground. Conclusion: The Tribunal upheld the CIT(A)'s decision to adopt the DVO's valuation of Rs.4,14,870/- for computing capital gains, as the appellant did not object to this valuation during the proceedings. The claim for brokerage expenses was also dismissed due to a lack of evidence. The appeal was dismissed, with the Tribunal noting that the appellant's legal heir filed the appeal due to an inability to pay the small tax amount, which was not a justified reason for filing a frivolous appeal.
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