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TMI Blog2013 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... le of shops – No material has been produced against the basis adopted by DVO - If the assessee felt aggrieved against the rate taken by the DVO, it would have been proper for the assessee to raise objection on the basis of some material or evidence before the DVO, before the AO at the remand proceedings or at least before the ld. CIT(A). The assessee did not choose to do anything in the matter and merely raised the objection that since valuation was less than 15% in difference, therefore, no addition should be made. Such a plea was alien to the provisions of section 50C of the IT Act. Further section 50C is a special provision for full value of consideration in certain cases and deals with the transfer of capital asset by the assessee in land or building or both - ld. CIT(A) on proper appreciation of provisions of section 50C and the facts of the case rightly concluded that the valuation of sale consideration is to be taken at Rs.4,14,870/- as per valuation report and since cost of acquisition is admitted by the assessee at Rs.3,85,748/-, therefore, the addition was rightly restricted to Rs.29,122/- - Further, assessee has no evidence to support the plea of payment of brokerage on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O after recording reason to believe that there was a difference of Rs.1,33,000/- in the value of sale consideration declared by the assessee for the purpose of computation of capital gain and therefore, the income has escaped assessment to the extent of Rs.1,33,000/- and hence, he issued a notice u/s. 148 dated 25.08.2008. After rejecting the objection of the assessee for reopening of assessment proceeding u/s. 147, the AO completed the assessment at an assessed income of Rs.2,66,450/- as against the returned income of the assessee at Rs.1,29,200/- after computing the income of the assessee as under : Stamp value of the property Rs.5,23,000/- Less:Cost of acquisition as taken by the assessee Himself in the computation of income Rs.3,85,748/- Rs.1,37,252/- Therefore, there will be an addition of Rs.1,37,252/- to the income of the assessee. Income is computed as under : Income as shown by the assessee Rs.1,29,200/- Addition on account of capital gain Rs.1,37,252/- Rs.2,66,452/- Or say Rs.2,66,450/- 2.1 The assessee challenged the addition on account of capital gain before the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation Authority, therefore, the addition was restricted to Rs.29,122/-. Further, since no supporting evidence of payment of brokerage was produced, therefore, such a ground was dismissed. The detailed findings of ld. CIT(A) in para 5.6 to 5.11 of the appellate order are reproduced as under : I have considered all the submissions made by the Ld. AR with respect to his argument for taking the actual sale consideration value of the property as the value of sale consideration for the purpose of computation of capital gain as raised in the additional grounds no.8, 9 10 taken by the appellant. In this regard, the valuation report of the AVO as well as discussion made by the AO in the assessment order has been considered. I find that in the instant appeal, the main issue to be decided is about taking of value of sale consideration for the purpose of computation of capital gain by applying the provision of section 50C. On going through the provision of section 50C, I find that as per the provision of sub section (1) of section 50C, where the consideration received or accruing as a result of transfer by an assessee of a capital asset being land or building or both, is less than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this property for valuation to AVO and on the basis of the report of the AVO, the valuation has been determined at Rs.4,14,870/-. On this valuation of the property by the AVO, now, the Ld. AR has contended by taking three additional grounds 8, 9, 10 that the sale consideration shown by the appellant is less than 15% and Rs. 25,000/- from the value determined by the AVO and therefore, the fair market value determined by the AVO being less than the valuation computed by the valuation authority, the sale consideration of the property should be taken at Rs.3,90,000/- as declared in the return and in the opinion of the Ld. AR, provision of section 50C(1) would not be applicable in case of the appellant. In support of his argument, the Ld. AR has referred to the provision of 55A read with rule 111A taking the plea that no adverse inference should be drawn where ever the difference is less than 15% and Rs.25,000/- and in such circumstance, the actual sale consideration should be taken for working out the capital gain. In support of his this argument, he has also relied on a decision of Hon'ble Chennai Bench of ITAT in the case of ITO Vs Ms. Kumudini Venugopal (2011) 16 Taxmann.com 136 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale consideration shown by the appellant in the return of income, the appellant has placed reliance on the decision of the Hon'ble Chennai Bench of ITAT in case of ITO Vs Ms. Kumudini Venugopal (2011) 16 Taxmann.com 136 (Chennai) quoting that if AVO determined valuation of property is much lower than that figure as fixed by the Stamp Valuation Authority, the sale consideration as shown by the appellant in her return of income should be adopted. In order to examine this claim of the Ld. AR, I have gone through the decision of Hon'ble ITAT, Chennai Bench. In this case, there were two appeals before the Hon'ble Tribunal, one filed by Ms. Kumudini Venugopal and another filed by Kum. Rajini Venugopal. In case of Ms. Kumudini Venugopal, the sale deed was not registered but in the case of Kum. Rajini Venugopal, the sale deed was registered. Therefore, while finally deciding both the appeals after getting the property valued by the Valuation Officer, it has been held by the Hon'ble Tribunal that the fact that OVO has valued the property much lower than the value fixed by the Stamp Valuation Authority, shows that the claim of the appellant is true and correct and the provisions of 50C( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition made by the Assessing Officer and directed the Assessing Officer to adopt the sale consideration as per the valuation report of the DVO in the case of Kum. Rajini Venugopal. In the case of Ms. Kumudhini Venugopal, the Assessing Officer was directed to accept the sale consideration as admitted by the assessee in her return of income. 4. It was the submission that the provisions of section 50C were mandatory and as the sale consideration disclosed by the assessee was lower than the valuation as per the stamp valuation authority, the value as fixed by the stamp valuation authority was liable to be adopted. It was the submission that the order of the learned Commissioner of Income-tax (Appeals) is liable to be reversed and that of the Assessing Officer restored. 5. The learned authorised representative has submitted that as per the provisions of section 50C, the Assessing Officer had referred the valuation to the ova. However, as per the directions of the Additional Commissioner of Income-tax under section 144A of the Act, the Assessing Officer had adopted the value as fixed by the stamp Valuation authority. It was the submission that in the course of assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the assessing authority may refer the valuation of the capital asset to a Valuation Officer and the provisions of the Act in respect of the valuation would apply. As per subsection (3) of section 50C, if the value as arrived at by the ova on the reference from the Assessing Officer under section 50C(2) is found to exceed the valuation as adopted or assessed or assessable by the stamp valuation authority referred to in subsection (1), then the value so adopted or assessed or assessable by the stamp valuation authority is to be taken as the full value of the receipt or accruing as a result of the transfer. Thus, as per section 50C(1), the valuation as fixed by the stamp valuation authority is taken as a bench mark, as per sub-section (2) of section 50C the bench mark can be reviewed by the reference to the valuation officer if the assessee claims that such value exceeds the fair market value. As per sub-section (3), if the valuation as arrived at by the OVO as a consequence of the reference made to him by the Assessing Officer on account of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect and the provisions Of section 50C(1) would have to be read with section 50C(2) and the value a arrived at as per the provisions of section 50C(2) of the Act would have to be adopted in the case of Kum. Ranjini Venugopal. In the case of Ms. Kumudini Venugopal, it is noticed that the sale agreement in respect of the property has not been registered. Consequently, the provisions of section 50C would not apply. Under these circumstances, we are of the view that the findings as arrived at by the learned Commissioner of Incometax (Appeals) is on a right footing and both the appeals of the Revenue are dismissed. " 5.10 In the case of the appellant, sale deed has been registered and hence, even by following the decision of Hon'ble Chennai Tribunal referred by the Ld. AR, the sale consideration has to be adopted as per the valuation report of the DVO. In fact, the Ld. AR has wrongly referred the decision of Hon'ble Chennai ITAT in the case of Ms. Kumudini Venugopal in whose case sale agreement was not registered. Therefore, it is undisputedly proved that once a property is referred to the Departmental Valuation Officer for determination of fair market value of a property sold on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no objections have been raised before the Stamp Valuation Authorities with regard to the valuation of the property. The ld. Counsel for the assessee also admitted that there is no evidence to prove payment of brokerage on sale of property. He has, after making the arguments submitted that the assessee had already expired and appeal is filed through legal heir and since the legal heir does have any amount to be paid, therefore, the present appeal has been filed. 4. On the other hand, the ld. DR relied upon the orders of the authorities below. 5. I have considered the rival submissions, perused findings of authorities below and the material available on record. It is not in dispute that Stamp Valuation Authorities have assessed the value of property for stamp duty purposes at Rs.5,23,000/-. The assessee claimed before the ld. CIT(A) that a report of registered valuer was filed showing valuation of property at Rs.3,12,395/-. Therefore, request was also made to the AO that if he did not agree with the report of registered valuer, the matter may be referred to the DVO as per section 50C(2) of the IT Act. The ld. CIT(A) on such plea of the assessee referred the matter to the DVO for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on report and since cost of acquisition is admitted by the assessee at Rs.3,85,748/-, therefore, the addition was rightly restricted to Rs.29,122/-. It is also admitted fact that the assessee has no evidence to support the plea of payment of brokerage on sale of property, therefore, the claim of assessee for such deduction has rightly disallowed by the ld. CIT(A). Considering the above facts of the case and a very small addition sustained by the ld. CIT(A), it is clear that it was a very small matter and the assessee without reasons has filed the present appeal. The ld. Counsel for the assessee submitted that since the appeal is filed through legal heir and legal heir is not in a position to pay small tax, therefore, present appeal has been filed. Such a reason itself is not justified in filing the frivolous appeal before the Tribunal. Since it is a very small matter, therefore, I do not propose to impose cost on the legal heir of the assessee, otherwise it was a fit case for dismissal of appeal of assessee subject to cost. In view of the above findings, the appeal of the assessee is liable to be dismissed. 6. In the result, the appeal of the assessee is dismissed. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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