9911796707
TMI Blog2012 (4) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Officer wish to be present at the hearing" of ITNS-51. 4. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deciding the appeal by admitting additional evidence in the shape of legal notices and has totally ignored the observation of AO. No opportunity has been given to the AO before admitting the additional evidence inspite of the facts that the assessee has not produced the same during assessment proceedings. 5. It is prayed that the order of the ld. CIT(A) be set aside and that of the AO may be restored. 6. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or is disposed off." 3. The ld. 'DR' placed reliance on the assessment order and, further, contended that the decision relied upon by the CIT(A), in the case of Chandni Bhuchar [2010] 229 CTR 190 (P&H), is not applicable to the facts of the present case. The said decision has been rendered in the context of a purchaser. The present assessee appellant is seller and, hence, the said case is not applicable, to the case of a seller, in view of the specific legal fiction created by the express provisions of Section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale consideration and the value shown in the sale deed has to be accepted. 12 The Hon'ble Court quoted and endorsed the arguments advanced by the ITAT Delhi Bench in ITA No. 1580/Del/2008 against which order, this appeal was filed, as under: "From a plain reading of this provision, it emerged out that the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of land or building or both shall for the purpose of s. 48 be deemed to be the full value of the consideration received or accruing as a result of transfer. It nowhere provides that the valuation done by the State Government for the purpose of stamp duty etc. would ipso facto take place of the actual consideration as being passed on to the seller by the purchaser in the absence of any other evidence. The AO is required to bring positive evidence on record indicating the fact that assessee has paid anything more than the one disclosed in the purchase deed. The Department has taken an argument in the grounds of appeal that AO should be directed to make a reference to the Valuation Officer under s. 142A of Act. It also raised a plea that AO has wrongly made a referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I hold that the addition of Rs.233119/- on this ground is not justified. As such, the same is deleted, allowing assessee's plea on these grounds." 6. At the outset, we may state here that the CIT(A) misapplied the ratio of the decision of the jurisdictional High Court, in the case of CIT v. Chandni Bhuchar 229 CTR 190 (P&H), as the same has been rendered, in the context of a Purchaser, whereas the present appellant is a 'Seller', which squarely falls u/s 50C of the Act. We have carefully perused the facts of the case, relied upon by the ld. CIT(A) and the decision, delivered of the jurisdictional High Court, in the case of Chandni Bhuchar (supra). The case of the present assessee, being seller, falls within the contemplation of express provisions of Section 50C of the Act. Therefore, the decision of the Hon'ble High Court is distinguishable in the context of purchaser. The facts of the said decision, relied upon by the ld. CIT(A), are patently different and distinguishable. A bare perusal of the provisions of Section 50C of the Act, makes it abundantly clear that the legislature has created a legal fiction, in the case of a seller or transferor or vendor u/s 50C of the Act, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to give directions on the appeal of Revenue that a reference to the Valuation Officer is to be made in order to substantiate the addition. The steps which AO could have .taken, if not taken then that lacuna cannot be filled up at the end of the Tribunal. In the absence of any evidence exhibiting the fact that assessee has made unexplained investment in the house property, no addition can be justified. Learned first appellate authority has appreciated the facts and circumstances in right perspective. We do not find any error in the impugned order on this ground. Thus, the ground of appeal raised by the Revenue is rejected." 7. In the case of Chandni Bhuchar's case (supra), the AO invoked the provisions of Section 69B of the Act and treated the investment made by the purchaser as unexplained, by placing reliance on the provisions of Section 50C of the Act, for the purpose of determination of the quantum of investment made by the assessee. In this context, it is pointed out that the provisions of Section 50C of the Act deals with the seller or transferor of the property and not with the purchaser or the transferee. It is settled legal proposition that legal fiction created under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The rule of construction of legal fiction is to 'hunt in pairs' as held in CIT v. Chhotelal Kanhaiyalal [1971] 80 ITR 656 (MP). So in construing a provision creating a statutory fiction, two rules operate : the statutory fiction should be carried to its logical conclusion but the fiction cannot be extended beyond the language of the section by which it is created or by importing another fiction. The solution is found by harmoniously applying these rules. 8(ii) The Supreme Court in CIT v. S.Teja Singh [1959] 35 ITR 408 (S.C) held that it is well-settled rule of interpretation that in construing the scope of a legal fiction, it would be proper and even necessary to assume all those facts on which alone the fiction can operate. A construction which defeats the very object sought to be achieved by the Legislature must, if possible, be avoided. 9. In view of the above legal and factual discussion, it is evident that decision relied upon by the ld. CIT(A) in the case of Chandni Bhuchar (supra), rendered in the context of a purchaser, is not applicable to the facts of the present case, as the appellant is a seller, covered u/s 50C of the Act. Hence, the findings of the CIT(A), cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer." 11. A bare reading of Section 50C of the Act reveals that it incorporates special provisions, for determining the full value of consideration, in case of transfer of immovable property. It provides that where consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed or assessable by an authority of State Government, i.e. Stamp Valuation Authority, for the purpose of payment of Stamp Duty in respect of such transfer. the value so adopted or assessed or assessable, shall be deemed to be the full value of consideration, and capital gains s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration, and capital gains shall be computed accordingly under Section 48 of the Income-tax Act. 37.3 It is further provided that where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on the date of transfer, and he has not disputed the value so adopted or assessed in any appeal or revision or reference before any authority or court, the AO may refer the valuation of the relevant asset to a Valuation Officer in accordance with Section 55A of the Income-tax Act. If the fair market value determined by the Valuation Officer is less than the value adopted for stamp duty purposes, the AO may take such fair market value to be the full value of consideration. However, if the fair market value determined by the Valuation Officer is more than the value adopted or assessed for stamp duty purposes, the AO shall not adopt such fair market value and shall take the full value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Meenakshi (N) v. ACIT [2010] 326 ITR 229 (Mad.). Similarly, on the same reasoning and analogy, where the AO referred the property to the Valuation Cell, on the direction of the CIT(A), then, the CIT(A) is not competent to delete the addition, without waiting for such report from the Valuation Cell. In the present case, CIT(A) directed the AO to refer the property to the Valuation Cell, though no such claim filed by the assessee, before the AO, at the time of assessment proceedings, but deleted the impugned addition made by the AO, without waiting for such report from the Valuation Cell. It is further mentioned that the ITO, Mohali had written a letter to the District Valuation Officer, Chandigarh, which is reproduced hereunder : "No. ITO/W-6(3)/Mohali/09/10/19968 Office of the Income Tax Officer, Ward 6(3), Mohali. To The District Valuation Officer, SCO 45, 2nd Floor, Sector 31-D,Chandigarh. Sir, Sub : Reference to elucidate the cost of land and building/fair market value in respect of property Booth No.2927B sector 22C Chandigarh - regarding. The assessment in the case of Smt. Inderjit Kaur, H. No. 77, Phase 3B1, Mohali for the assessment year 2006-07 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chandigarh on 21.10.2005 for Rs. 15,00,000/-, as well as funds available for investment in various Mutual Funds." 15. It is imperative to add here that the AO, could have filed the Valuation report before the CIT(A), only after it was received from the DVO. As per para 8 of the CIT(A)'s appellate order, a direction was issued by the CIT(A), vide letter No.635A dated 11.12.2009, to refer the case to the DVO. Thereafter, the ld. CIT(A), issued letters to the AO, for furnishing the report, as directed. However, the ld. CIT(A), deleted the impugned addition of Rs.24,06,270/-, without receipt of the report from the DVO and following the inapplicable decision, in the case of Chandni Bhuchar (supra), as discussed earlier. Such approach of the ld. CIT(A) is not in consonance with the statutory provisions of the Act, and the concept of jurisprudence of true justice. 16. In view of this, the findings of the ld. CIT(A) are not legally and factually tenable. However, having regard to the facts of the case, the issue is restored to the file of the AO, to frame the assessment afresh, after obtaining the valuation report. The AO should give proper opportunity to the assessee and adjudicate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
