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2022 (6) TMI 648 - AT - Income TaxCapital gain - applicability of provision u/s 50C - AO proceeded by adopting the stamp duty value rate as full value of consideration in light of provisions of section 50C - HELD THAT - A perusal of the order of the ld. CIT(A) shows that the assessee raised objections before the ld. CIT(A) claiming that the Assessing Officer ought to have referred the matter to the Departmental Valuation Officer. We find that the ld. CIT(A) did ask the AO to get the valuation report from the DVO, which the Assessing Officer called from the DVO and the DVO determined the market value of the impugned property. Assessee submitted valuation report of some valuer, valuing the market value of the property at Rs. 5.50 crores. This valuation report was dismissed by the CIT(A) holding that when the same was available at the time of assessment proceedings and even at the time of filing the appeal, it was never submitted and only after receiving the valuation report from the DVO, the assessee has submitted this valuation report. Assessee did not point out any defect or error or infirmity in the determination of market value by the DVO. Though the stamp duty value is at Rs. 8,85,68,900/-, the same has been valued by the DVO at Rs. 12,86,55,700/-, which means that the DVO has put the value on a higher side than the circle rate - Appeal of assessee dismissed.
Issues:
1. Confirmation of addition made by the Assessing Officer under section 50C of the Income Tax Act. Analysis: The appeal was filed by the assessee against the order of the ld. CIT(A) confirming the addition made by the Assessing Officer amounting to Rs. 3,35,68,900. The Assessing Officer had noticed that the assessee sold an industrial unit for Rs. 5.50 crores, whereas the circle rate value was Rs. 8,85,68,900. The Assessing Officer applied section 50C of the Act, considering the stamp duty value as the full value of consideration, resulting in the addition. The assessee contended that the actual sale consideration should be accepted. The ld. CIT(A) directed the Assessing Officer to obtain a valuation report from the Departmental Valuation Officer (DVO), who valued the property at Rs. 12,86,55,700. The assessee submitted a valuation report valuing the property at Rs. 5.50 crores, which was dismissed by the ld. CIT(A) as it was submitted after the DVO's report. The DVO's valuation was higher than the circle rate. The Tribunal found no reason to interfere with the ld. CIT(A)'s findings and dismissed the appeal. This case primarily revolves around the application of section 50C of the Income Tax Act, which deals with the determination of full value of consideration in cases of transfer of immovable property. The Assessing Officer applied section 50C based on the stamp duty value, resulting in the addition to the assessee's income. The assessee's argument that the actual sale consideration should be accepted was not accepted, as the DVO's valuation was significantly higher. The Tribunal emphasized that the DVO's valuation was on the higher side compared to the circle rate, indicating a fair market value assessment. The ld. CIT(A) directed the Assessing Officer to obtain the valuation report from the DVO, which played a crucial role in determining the market value of the property. The assessee's submission of a valuation report after the DVO's report was dismissed by the ld. CIT(A) due to the timing of submission. The Tribunal noted that the assessee did not raise any specific objections regarding the DVO's valuation, further strengthening the decision to uphold the addition made by the Assessing Officer under section 50C. The Tribunal's decision was based on a comprehensive analysis of the valuation reports and the procedural aspects of the case, ultimately leading to the dismissal of the assessee's appeal.
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