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2018 (5) TMI 1005 - AT - Income TaxProvisions of section 50C applicability - AO referred matter to DVO - value determined by DVO - Held that - The value submitted by the DVO is in order and AO has followed the value as per the deemed provisions of section 50C. The submissions of the assessee cannot be accepted on the fact that assessee is an NRI and was not in a position to negotiate or the market value cannot be fluctuated with a span of 4 months. The AO has to follow the provisions laid down in section 50C and he also has followed the due process of law by referring the matter to the valuation cell and, accordingly, he has adopted the value as determined by the DVO. Deduction u/s 54 - value of the property determined by the Valuation Officer of the Department - Held that - Assessee cannot claim deduction u/s 54F in proportion to increase in capital gains after attracting the provisions of section 50C. Therefore, the ground raised by the assessee are dismissed. Interest u/s 234A and 234C - Held that - No doubt, assessee is NRI and remittance to the assessee comes under the provisions of section 195. Deduction of tax while remitting lies with the payee. By considering the above situation, ld. CIT(A) has deleted interest charged u/s 234B and retained interest charged u/s 234A & 234C as they are statutory provisions. When an income is chargeable to tax in India, irrespective of the residential status, assessee is bound to follow advance tax provisions as laid down u/s 234A and 234C. Therefore, these provisions are consequential in nature. Accordingly, this ground raised by the assessee is dismissed.
Issues Involved:
1. Initiation of action under Section 147 of the I.T. Act. 2. Adoption of sale consideration under Section 50C. 3. Calculation and eligibility for exemption under Section 54F. 4. Issuance of corrigendum by the CIT(A). 5. Charging of interest under Sections 234A and 234C. Detailed Analysis: 1. Initiation of Action under Section 147 of the I.T. Act: The assessee did not argue this ground, and it was dismissed as not pressed. 2. Adoption of Sale Consideration under Section 50C: The AO observed that the assessee sold a property for ?75,00,000/-, whereas the SRO value was ?1,88,70,000/-. The AO invoked Section 50C and referred the valuation to the DVO, who determined the value at ?1,14,48,000/-. The assessee argued that the SRO value increased abnormally within two months, but the AO and CIT(A) upheld the DVO's valuation. The Tribunal agreed with the lower authorities, stating that the AO followed the due process of law by referring the matter to the valuation cell and adopting the value determined by the DVO. 3. Calculation and Eligibility for Exemption under Section 54F: The assessee claimed exemption under Section 54F based on the actual sale consideration of ?75,00,000/-. The AO, applying Section 50C, increased the capital gains and allowed a proportionate exemption. The assessee argued for a higher exemption based on the increased capital gains. The Tribunal referred to the case of Raj Babbar vs. ITO, where a similar situation allowed for increased exemption. However, the Tribunal also considered the case of Shri Gouli Mahadevappa vs. ITO, which stated that Section 54F should be applied independently of Section 50C. The Tribunal concluded that the assessee could not claim a higher exemption proportionate to the increased capital gains due to Section 50C. 4. Issuance of Corrigendum by the CIT(A): The assessee contended that the CIT(A) issued a corrigendum without providing an opportunity to be heard. The Tribunal found that the corrigendum corrected a clerical error and did not require an opportunity to be extended to the assessee. The CIT(A) has the power to rectify mistakes apparent on record. 5. Charging of Interest under Sections 234A and 234C: The assessee, being an NRI, argued that the payee should deduct tax at source under Section 195, and hence, interest under Sections 234A and 234C should not be charged. The CIT(A) deleted interest under Section 234B but retained interest under Sections 234A and 234C, considering them statutory provisions. The Tribunal upheld this decision, stating that the provisions are consequential and must be followed irrespective of the residential status of the assessee. Conclusion: The Tribunal dismissed both appeals, upholding the AO's and CIT(A)'s decisions on all grounds. The adoption of the DVO's valuation under Section 50C and the proportionate exemption under Section 54F were deemed appropriate, and the issuance of the corrigendum and charging of interest under Sections 234A and 234C were found to be in accordance with the law.
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