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2021 (5) TMI 534 - AT - Income TaxComputation of capital gain - adoption of value of the property as per registered sale deed for the purpose of Section 50C - enhanced value of the property was challenged before the Rajasthan Tax Board and the Rajasthan Tax Board has since passed an order dated 14.08.2012 wherein the order dated 20.08.2010 of the Collector Stamp enhancing value of the property @ ₹ 77,03,999/- has been set aside - HELD THAT - Once the Rajasthan Tax Board has given its verdict and set-aside the order of the collector stamps wherein the latter has enhanced the value of the property, there is no basis left with the taxing authorities not to accept the same. We further fail to understand why even the ld CIT(A), being the appellate authority failed to appreciate the same and insisted on passing of the appeal effect order. In any case, we find that the assessee has since filed a copy of the order dated 24.06.2020 passed by the stamp duty authorities wherein the stamp duty on the enhanced value deposited by the buyer was directed to be refunded pursuant to and giving effect to the order of Rajasthan Tax Board dated 14.08.2012. Where the stamp duty authorities have accepted the original value of the property as per the sale deed, there is no basis left with the AO to continue to apply the enhanced value and we hereby direct the Assessing Officer to consider the original value of the property as per registered sale deed @ ₹ 23,00,000/- for the purpose of Section 50C of the Act and compute capital gains accordingly. In the result, the sole ground taken by the assessee is allowed.
Issues:
1. Determination of deemed value of property for capital gains calculation under Section 50C. 2. Consideration of original property value versus enhanced value by Stamp Valuation Authorities. 3. Impact of Rajasthan Tax Board's order on Stamp Duty valuation. 4. Requirement of fresh order by Collector Stamp to give effect to Rajasthan Tax Board's decision. Issue 1: Determination of Deemed Value of Property The assessee appealed against the order confirming the deemed value of the property at ?77,03,999 by the AO for the assessment year 2009-10. The property was sold for ?23,00,000, but the value was reassessed by the Stamp Valuation Authorities twice, eventually reaching ?77,03,999. The AO determined capital gain at ?54,03,999, which was contested by the assessee. Issue 2: Original Property Value vs. Enhanced Value The assessee argued that the original sale deed value of ?23,00,000 should be considered for capital gains calculation under Section 50C, not the enhanced value of ?77,03,999. The Rajasthan Tax Board set aside the Collector's order enhancing the property value, indicating finality in the matter. Issue 3: Rajasthan Tax Board's Impact on Stamp Duty Valuation The Rajasthan Tax Board quashed the Collector's order enhancing the property value, leading to a refund of stamp duty to the buyer. The Stamp Duty Authorities reinstated the property value at ?23,00,000, rejecting the earlier enhanced value of ?77,03,999. The ITAT admitted additional evidence supporting the reinstatement of the original property value. Issue 4: Requirement of Fresh Order by Collector Stamp The CIT(A) upheld the AO's decision based on the need for a fresh order by the Collector Stamp to give effect to the Rajasthan Tax Board's decision. However, the ITAT found no basis for not accepting the Rajasthan Tax Board's verdict and directed the AO to consider the original property value of ?23,00,000 for capital gains calculation under Section 50C. In conclusion, the ITAT allowed the assessee's appeal, directing the AO to compute capital gains based on the original property value of ?23,00,000 as per the registered sale deed. The decision emphasized the finality of the Rajasthan Tax Board's order and the acceptance of the original property value by the Stamp Duty Authorities, overriding the enhanced value previously determined.
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