9911796707
TMI Blog2007 (7) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of s. 50C of the Act; and, second, that without prejudice to the aforesaid grievance, the CIT(A) ought to have adopted the sale consideration of property at Rs. 11,42,000 as per the valuation done by the Departmental Valuation Officer (DVO). 3. The factual matrix in which these grievances arise is like this. In the relevant previous year, the assessee had sold a house property for a consideration of Rs. 6,50,000. It was in respect of this transaction that the assessee, in his IT return, had disclosed capital gain, and the capital gains so disclosed by the assessee were computed by taking into account Rs 6,50,000 as sales consideration, even though admittedly the valuation of the house property, for stamp duty purposes, was Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed registrations in the area have been made at similar or even lower rates, but all this is not relevant in view of specific provisions of s. 50C of the Act which requires the stamp duty valuation to be adopted for the purpose of computing capital gains. The addition made by the AO was thus confirmed. The assessee is not satisfied by the order of the CIT(A) and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 5. Let us look at the scheme of the Act first. Sec. 50C of the IT Act, which was introduced by the Finance Act 2002 w.e.f. 1st April, 2003, contains for special provisions for valuation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the valuation or assessment as per the stamp valuation authority, the computation of capital gains is to be done with reference to the valuation or assessment as per the stamp valuation authority. In other words, valuation of property by the DVO cannot act to the detriment to the assessee; the assessee cannot be put to any disadvantage in case the matter is referred to the DVO. 7. The scheme of s. 50C can be summarised as follows. The normal rule thus is that where stamp duty valuation is higher than the stated consideration on transfer, the same is to be adopted for the purposes of computing capital gains. The exception is that in case the assessee can demonstrate that the fair market valuation is less than the stamp duty valuation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle rates adopt uniform rate of land for an entire locality, which inherently disregards peculiar features of a particular property. Even in a particular area, on account of location factors and possibilities of commercial use, there can be wide variations in the prices of land. However, circle rates disregard all these factors and adopt a uniform rate for all properties in that particular area. If the circle rate fixed by the stamp valuation authorities was to be adopted in all situations, there was no need of reference to the DVO under s. 50C(2). The sweeping generalizations inherent in the circle rates cannot hold good in all situations. It is, therefore, not uncommon that while fixing the circle rates, authorities do err on the side of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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