2013 (11) TMI 1761 - AT - Income Tax

Summary

Issues involved: The only issue in this appeal is against the order of CIT(A) regarding the value adopted by Stamp Valuation Authority and the failure to refer the matter to the Valuation Officer despite objection from the assessee.

Details of the Judgment:

1. Issue 1 - Stamp Valuation Authority's Value Adoption:
The appeal by the assessee is against the order of CIT(A) in respect to the value adopted by the Stamp Valuation Authority without referring the same to the valuation officer as provided u/s 50C of the Income-tax Act, 1961. The AO took the value adopted by the Stamp Valuation Authority as deemed value for the purpose of computation of Long Term Capital Gains. CIT(A) confirmed the action of AO, upholding the application of section 50C. The assessee contended that the market value of the property should be taken at a lower amount while computing the long term capital gain. The Coordinate Bench decision in a similar case held that the consideration received on account of surrender of leasehold rights is not subject to section 50C of the Act. Accordingly, the appeal of the assessee was allowed.

2. Issue 2 - Failure to Refer to Valuation Officer:
The second ground raised by the assessee was that the AO failed to refer the matter to the Valuation Officer. However, the CIT(A) found no legal infirmity in the AO's order and upheld the application of section 50C. The Coordinate Bench decision supported the assessee's contention that the consideration received on surrender of leasehold rights is not taxable under section 50C. Consequently, the appeal of the assessee was allowed.

In conclusion, the Appellate Tribunal ITAT KOLKATA allowed the appeal of the assessee based on the grounds related to the Stamp Valuation Authority's value adoption and the failure to refer the matter to the Valuation Officer. The judgment highlighted the distinction between ownership rights and tenancy rights in determining the tax implications of property transactions.