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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 ..... der 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) and adopting valuation arrived at by DVO while computing Capital Gain on Sale of property. The issue arises as under as stated by CIT(A) in his order: 3.1 The assessee had sold a flat for a sale consideration of Rs.47,10,000/- vide agreement dated 13.7.2006 but the stamp. duty authorities valued the property at Rs.65,79,710/ - When the AO asked the assessee as to why the stamp duty valuation may not treated as deemed sale consideration u/s.500, it was submitted by the assessee that at the time of sale the flat was in completely raw condition which is evident from the clauses 3 & 4 of the sale agreement itself. Hence the actual sale consideration shown is fair and reasonable The assessee further submitted that incase the declared value is not accepted then the matter may be referred to the Valuation officer u/s.50C(2), The AO however did not accept the contention of the assessee on the ground that the capital gain being shown is short term capital gain and not long term capital gain and provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound 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 arguments of the Ld. AR arid perused the remand report of the AO and the forwarding comments of the Addl CIT, Range 21(1) The view of the Addl CIT Range 21(1) and the AO that reference to valuation officer is not mandatory but discretionary, is not tenable. The only condition to be fulfilled before a reference to Valuation officer is required is that (1) the assessee should object to adoption of the stamp valuation as deemed sale consideration and (2) assessee should not have filed any appeal before the stamp valuation authorities. The asstt order itself reveals that the assessee had objected, to the AO for reference to Valuation officer. So far as filing of appeal before stamp authorities is concerned, the AO himself has stated in the remand report that one of the reason for not referring to valuation officer was that no appeal was filed by assessee before the stamp valuation authorities. So undisputedly 'both the conditions for referring to valuation officer were satisfied and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities 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, ignoring the DVO's report, on grounds that DVO's report is not binding on CIT(A), cannot be acceded as AO has not brought sufficient material to justify that the DVO's report is erroneous and unreliable Though the DVO's report may not be binding on CITA) but it is still a report of a technically qualified person and hence the same cannot be discarded unless there are sufficient seasons to reject it either totally or even partially. As already discussed, when a reference under section 50C(2) has been made to DVO, stamp duty valuation has lost its relevance.The request of the Addl.CIT Range 21(1) that in case of my disagreement with his views, the CIT(A) may seek clarification from DVO is also not acceptable Unless the AO has made out a sufficiently good case for disagreement with the DVO's report, office of CIT(A) primarily having appellate work, cannot be expected to seek further clarifications at the behest of the AO. It was for Addl CIT to have asked the AO workin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 rebate on account of raw condition of the flat. Thus the objection of the appellant also to the DVO's report cannot be sustained. The valuation done by the DVO at Rs 52,78,714/- appears to be fair and reasonable after considering the relevant condition of the raw flats. Accordingly the deemed sale consideration to be adopted u/s 50C(2) should be at Rs.52,78,714 as determined by the DVO. The AO is directed to compute the short term capital gains accordingly. 4. The Ld. DR relied on the orders of the AO and referred to the provisions of the Ac. It is submitted that there is no need to refer the issue to Valuation Officer and to that extent the order of the Ld. CIT(A) is not correct. Ld. Counsel in reply explained the facts and also the provisions of the Act. He relied on the orders of the CIT(A) and further submitted assessee has accepted the valuation by the DVO in order to settle the issue. 5. We have considered the issue and examine the record. We do not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment 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.] As can be seen from the above provisions, when the Assessee objects to the valuation of the Stamp Authorities before the A.O., the Assessing Officer has no option than to refer the valuation to the DVO. It has been held by various decisions of the coordinate bench of the Tribunal that the word "May" used in subsection 2 of section 50C has to be read as "Should" and the Assessing Officer has no discretion but to refer the matter to DVO for the valuation of the property when the Assessee raises an objection that the valuation adopted or assessed by the Stamp Valuation Authorities exceeds the Fair Market Valuation of the property. Coordinate bench orders in the Case of Shri Abbas T. Reshmawala Vs. I.T.O. in ITA N o. 3093/Mum/2009 dated 30.11.2009 and Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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