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2022 (12) TMI 1094 - HC - Income TaxCapital gain computation - Jantri rates v/s DVO s report - scope of invoking provisions of section 50C - AO empowered to reject the report of the valuation officer - AO to ascertain the fair market value, referred the matter to the Department Valuation Officer s (DVO) but rejected the DVO s report, on the ground that the sale instance of A.Y.2008-09 were considered when the old Jantri rates were prevalent - HELD THAT - Since, section 50C provides the rate adopted or assessed by the Stamp Duty Authorities is to be considered for the purpose of Section 50C - AO was not correct in adopting the market value assessable for the purpose of stamp duty, as said the provision has been inserted in the section 50C with effect from 01/10/2009, and applicable from A.Y.2010-11. Tribunal has rightly observed that once valid reference to the valuation officer is made under section 50(C)(2) of the Act, assessing officer is not empowered to reject the report of the valuation officer. This finding of the Tribunal is supported by the decision of coordinate bench in the case Ravjibhai Nagjibhai Thesia 2016 (9) TMI 645 - GUJARAT HIGH COURT Therefore, we could not find any error in the findings of the Tribunal that the A.O. is not justified in adopting the value other than as adopted by the stamp duty authority. No substantial question of law.
Issues:
1. Interpretation of Section 50C of the Income Tax Act, 1961. 2. Correct valuation method for determining capital gain on property sale. 3. Authority of Assessing Officer to reject valuation officer's report. 4. Applicability of stamp duty valuation benefits to Section 50C of the Act. Analysis: 1. The primary issue in this case revolves around the interpretation of Section 50C of the Income Tax Act, 1961, concerning the valuation of property for computing capital gains. The Assessing Officer (AO) made an addition of Rs.3,72,57,828 under Section 50C due to discrepancies in the valuation of property sold by the assessee. The core contention was whether the AO correctly applied Jantri Rates for the financial year 2008-09 and if the sale deed executed during that period should be considered for capital gain assessment. 2. The correct valuation method for determining capital gain on the property sale was a crucial aspect of the dispute. The assessee had taken the sale consideration at the valuation adopted by the stamp duty authority, while the AO relied on Jantri rates prevalent after 01/04/2008. The disagreement stemmed from the application of Section 50C, which mandates the assessed value by Stamp Duty Authorities for property sale consideration. The Tribunal emphasized that the AO should not adopt a value different from that determined by the Stamp Duty Authorities, as per the provisions of Section 50C. 3. Another significant issue was the authority of the Assessing Officer to reject the valuation officer's report. The CIT(A) held that the AO was not empowered to dismiss the valuation officer's report, a decision supported by a previous case. The Tribunal concurred with this stance, highlighting that once a valid reference to the valuation officer is made under Section 50(C)(2) of the Act, the AO lacks the authority to disregard the valuation officer's findings. 4. The final issue addressed the applicability of stamp duty valuation benefits to Section 50C of the Act. The Tribunal dismissed the appeal by the revenue, emphasizing that the AO's adoption of market value assessable for stamp duty purposes was incorrect. The Tribunal underscored that Section 50C requires adherence to the value assessed by Stamp Duty Authorities, and any deviation from this standard is unwarranted. The judgment clarified that the stamp duty valuation benefits cannot be extended to override the provisions of Section 50C, thereby upholding the decision of the CIT(A) and dismissing the tax appeal. Overall, the judgment elucidated the correct application of Section 50C, the significance of Stamp Duty Authorities' valuation, and the limitations on the Assessing Officer's discretion in rejecting valuation reports, providing clarity on the legal aspects governing property transactions and capital gains assessments under the Income Tax Act, 1961.
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