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TMI Blog2014 (1) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22.10.1979 - As per the provisions of the Act, the assessee is entitled for valuation as on 01.04.1981 - This aspect was not considered by the AO and CIT(A) - assessee valued property as on 01.04.1981 and claimed indexation - the cost of acquisition has to be adopted only as on 01.04.1986 - There is a registered valuation report according to which the value as on that date was at 33 lakhs and indexed cost at 480/140 was at Rs.1,13,14,285 - thus, the assessee is entitled to claim cost as on 01.04.1986 and indexed cost - Assessee is not entitled to add original cost or lease rights if any, as the property value was arrived as on 01.04.1986 on the basis of valuation report filed by assessee - The AO is directed to modify the computation and allow the benefit under section 54 as claimed – Decided partly in favour of Assessee. - ITA No.260/Mum/ 2012 - - - Dated:- 10-7-2013 - Shri B. Ramakotaiah And DT. S.T.M. Pavalan,JJ. For the Petitioner : Shri K. Gopal and Shri Satyendra Pandey For the Respondent : Shri T. D. Singh ORDER Per B. Ramakotaiah, AM:- This is an assessee appeal against the order of the CIT(A)-27, Mumbai, dated 25.10.2011.The assessee raised grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of stamp duty at Rs.4,14,30,597/-. Before the AO, the assessee claimed that the stamp duty valuation is on higher side and to support his case the assessee filed a copy of the valuation report furnished by the approved valuer that its value was at Rs.3,25,00,000/- only as on 1st January, 2005. The AO referred the matter to the District Valuation Officer vide his letter dt. 5th August, 2009. Since the valuation report was not received as on the date of completion of the assessment, AO has adopted the stamp duty value as full consideration received for the purpose of computing capital gains as required u/s 50C of the Act. The assessee disputed the AO's action in this regard. The valuation report was received at a later date i.e. on 13.2.2011, a copy of which was forwarded to the assessee also. In the valuation report, the District Valuation Officer estimated the FMV of the property as on 31.3.2005 at Rs.3,87,60,443/- for the purpose of section 50C of the Act. The assessee's AR during the proceedings before the CIT(A) submitted that the difference between the value estimated by the Valuation Officer and the actual consideration received was less than 10%. In view of the above, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference made to him under section 50C(2) of the Act is binding on the AO. The appellant cannot take a plea that reference made u/s 55A of the Act where the percentage of difference has to be more than 15% applies to section 50C also. The aforesaid difference of 15% is a pre- condition for referring the property to valuation officer u/s 55A of the Act, whereas no such pre-condition is provided u/s 50C. All that the AO requires to refer the matter to the valuation officer u/s. 50C(2) of the Act is that the appellant has not disputed the stamp duty value in any appeal or revision before any other authority, court or high court and has made a claim before the AO that it exceeds the FMV of the property as on the date of transfer. Thus the provisions of section 50C and section 55A are on a different footing. Similarly, the wealth tax provisions are also applicable only to the extent they are envisaged in section 50C. In other words, the provisions of section 50C having been a fiction of law created for a specific purpose, they cannot be compared with any other provisions of the Act. Therefore, I am of the considered opinion that the value given by the Valuation Officer is final and bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereon..." In other words, all the leasehold rights in the aforesaid property were transferred to M/s. Vivek Builders against a consideration of a monthly rent of Rs.4000/- for a period of 98 years. Now, coming to the agreement dt. 15th October, 1979, the said agreement clearly acknowledges the fact that the lease rights were already transferred in favour of M/s. Vivek Builders by way of indenture of sub lease dt.22.9.1979 and in pursuance of the lease rights so created, the builders were desirous of constructing 8 additional floors over the existing building. In the aforesaid agreement it is also stated that the builders are desirous of selling the residential flats on the additional floors to be constructed by them to various persons on what is known as "Ownership basis" and at the request of the appellant the builders have agreed to sell and transfer a flat consisting of the entire third floor to be constructed, covering a carpet area of 1575 Sq.ft t the appellant. Clause 2 of the agreement clearly states that "the said Jamshed (i.e. the appellant) doth hereby agree to pay to the builders the purchase price of Rs.3 lakhs in respect of the said flat agreed to be purchased by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the record, the assessee claimed the actual cost of Rs.3 lakhs and the value as estimated by Registered value as on 01.04.1986, the date on which the assessee took possession of property. Thus there was a double claim. Later, when AO enquired, assessee filed another report taking the value as on 01.04.1981 again considering the original cost of Rs.3 lakhs and valuation as on 01.04.1981. AO without giving any finding on date of acquisition, adopted only Rs.3 lakhs as cost and allowed indexation. Ld.CIT(A) analysed the agreements and determined the original cost at Rs.3 lakhs and confirmed the order. What the ld. CIT(A) missed was that the value of Rs.3 lakhs paid by assessee was cost as on 22.10.1979. As per the provisions of the Act, the assessee is entitled for valuation as on 01.04.1981. This aspect was not considered by the AO and CIT(A). 5.2 However, assessee valued property as on 01.04.1981 and claimed indexation accordingly. As per the assessee, the property was under construction and he got it only in 1986. Thus the cost of acquisition has to be adopted only as on 01.04.1986. There is a registered valuation report according to which the value as on that date was at 33 l ..... 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