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TMI Blog2013 (11) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... /Mum/2011 - - - Dated:- 19-4-2013 - B Ramakotaiah and S T M Pavalan, JJ. For the : Appellant : Shri Mohit Jain For the : Respondent : Shri Manish J Sheth ORDER:- PER : B Ramakotaiah This is a Revenue Appeal against the orders of the CIT(A)-32 Mumbai dated 12.10.2010. The revenue has raised the following grounds: 1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in directing the Assessing Officer to consider the deemed sale consideration of the property as per the value determined by the DVO for calculation of Short Term Capital Gain on sale of property. i. In doing so, the Ld. CIT(A) has erred in directing the A.O. to refer to the VO under section 50C (2) of the I.T. 1961, Act. despite the Assessing Officer s contention that provisions for making a reference to Valuation Officer is not mandatory and rather discretionary as the word used is may and not shall in the Section 50C(2) of the Act. 1961. 2. The appellant prays that the order of Ld. CIT(A) on the above grounds be set-aside and that of the Assessing Officer be restored. 2. The issue in the appeal is with reference to the DVO under section 50C(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding on the AO but the same is not binding on the CIT(A) and hence the valuation adopted by the Stamp duty Authorities only should be taken as fair market value of the property. The Addl CIT range 21(1) while forwarding the remand report of the AO has also concurred with the views of the AO that referring the issue to DVO u/s 50C(2) is discretionary and that the valuation by stamp authorities is based on larger sample as compared to only three samples taken by VO and hence the former is more reasonable. He has further stated that out of the three samples taken by the DVO, the second sample showing rate of Rs.49,658/- is more near to the property in question in terms of number of floors of the building and size of flat, hence if at all DVO s report is to be relied, only the 2nd sale instance of Rs 49658/-should be adopted as basis for deemed sale consideration and not the average rate of three sample Rs.40,090/- It is further stated by the Addl CIT that in case the above request is not found acceptable, CIT(A) may seek clarification from the DVO 3. The Ld. CIT(A) after obtaining the objections of the assessee has considered the issue as under: 3.4.1 I have considered the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p authorities, then the provisions of section 50C(2) will become redundant because then stamp duty valuation u/s 50C(2) will be the same as adopted u/s 50C(1). Thus the expression Valuation officer and the stamp authorities are for different purposes and: are not interchangeable and stamp authorities cannot step into shoes of Valuation officer This view is supported by the fact that u/s 142(A) also where a reference to valuation officer has been prescribed to ascertain the investment in a property, the stamp duty valuation was not treated to be valid for the purpose of arriving at unexplained investment iii the property as held in Swami Complex P Ltd 111 TTJ (JP) 531 Sangam Towers 31 DTR (JPJ Tribunal 172, Kamal Inshore Chandak 103 TTJ 843(Jd), Hearly street pharmaceuticals Ltd 38 SOT 486(Ahd), Chandni Baucher 323 ITR 510 (P H), Raj Kumar Vimla Devi 279 ITR 360(Alld), etc. Hence, the view of the AG and the Addl CIT range 2 1(1) that the valuation by the stamp duty authorities being based on large sample can substitute the requirement of valuation u/s 50C(2) by valuation, is not tenable. 3.4.3. The request of the AO to. accept the stamp valuation authority valuation only, ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition Necessary rebate on market value of normal flats has to be given to arrive at the fair market value of raw condition flat The method adopted by the DVO seems to be justified and hence the plea of the AO/Addl CIT to adopt the only one instance as per DVO s report for ascertaining the deemed sale consideration, cannot be accepted 3.4.4 Now coming to the plea of the appellant at DVO has not rebate or account of raw condition of the flat, it is noted from the of the valuation report in para 31, that the DVO has specifically that the said flat is in raw condition without flooring, Door frames, windows, bathroom fittings, etc. It is further noted that for the purpose of valuing the appellant s property of 127.93 sq.mts, the DVO has applied the rate of Rs.40,090 per sq.mt whereas as per the average rate of three sale instances taken by the DVO comes to Rs.44,811/-(46584 + 49658 +38193/3). Hence by applying the rate of Rs.40,090 only which is much less than the average rate of Rs 44,811/- it appears that the DVG has already given a discount of Rs.4721 per sq mts (approx 10.5%) on account of raw condition of flat. Hence it cannot be said that the DVO has not given any rebat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealthtax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. [Explanation 1].-For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). [Explanation 2.-For the purposes of this section, the expression "assessable" means the price which the stamp valuation authority would have, notwithstanding anything to the contrary 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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