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TMI Blog2015 (2) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in law and on facts in ignoring the valuation report of the Joint Director, Town Planning (Valuation), Maharashtra State, Pune, valuating the land at Rs. 41,51,00,000 for the purpose of stamp duty. 1.2 The learned Commissioner of Income-tax (Appeals) erred in law and on facts upholding that the assessee did not dispute valuation by stamp duty authorities ignoring the fact that appellant's appeal under section 53A of the Bombay Stamp Act, 1958, was pending before the appropriate authorities for finalisation of value of stamp duty purpose based on valuation report of the Joint Director, Town Planning (Valuation), Maharashtra State, Pune and valuation as per the Joint Director, Town Planning (Valuation), Maharashtra State, Pune, is equal to sale consider ation mentioned in the document and received by the appellant. 1.3 The learned Commissioner of Income-tax (Appeals) ought to have appreciated that the valuation done by stamp office is excessive and unrea sonable. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lessee) the property admeasuring approximately 9350 sq. yd. was demised unto the lessees. The lease was for a period of 98 (ninety-eight years) with effect from March 4, 1968, for a rent of Rs. 19,971 per month. It was a term of the lease deed that the lessee shall within 3 years construct a build ing (hotel etc.) of value not less than Rs. 5 lakhs and an interest-free deposit of Rs. 59,913 was to be deposited on this account to the lessor by the lessee till completion of construction. All the taxes, fees, duties, outgoings etc. were to be paid by the lessees as per the covenant. In the event of breach of any clauses of the covenants, the lessor may re-enter upon the premises. On expiration of the lease period, the lessee will have to give vacant possession of the premises. Page No : 0413 Supplementary to this indenture of lease deed, an agreement was further entered into between the lessor and lessees dated May 23, 1968. By a letter dated, April 21, 1969, the lessor has granted its licence and consent to assign the rights of the lessee to M/s. Hotel Horizon P. Ltd. Accordingly, vide a deed of assignment dated April 21, 1969, the lessees being assignors assigned all their ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Rs. Sale consideration-as per market value as assessed by the Collector of Stamps, Mumbai subject to outcome to the appeal filed by the assessee under section 53A of the Bombay Stamp Act, 1958 (actual consideration Rs. 41,51,00,000) 57,74,51,000 Fair market value as on 1-4-1981-As per valuation report of District Valuation Officer-II, Income-tax Department, Mumbai. 3,10,14,000 Indexed cost 582 18,05,01,480 Selling expenses 5,79,786 Long-term capital gain 39,63,69,734 5. All the above facts are mentioned in the statement of facts filed by the assessee before the learned Commissioner of Income-tax (Appeals). 6. Before the learned Commissioner of Income-tax (Appeals) the assessee firstly contested the action of the Assessing Officer in adopting the sale consideration of Rs. 57,74,51,000 as against actual sale consideration of Rs. 41.51 crores. The assessee also contested the action of the Assessing Officer in adopting fair market value as on April 1, 1981, at a sum of Rs. 3,10,14,000 in place of value determined by the Government approved valuer at Rs. 5,62,50,775. 7. Before proceeding further it may also be mentioned here that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that section 55A authorises the Assessing Officer to refer for valuation if in the opinion of the Assessing Officer the value of the asset as claimed by the assessee is less than its fair market value or say, value in his opinion could be higher than that disclosed by the assessee and all these decisions of the Tribunal are mentioned in paragraph 1.2 of the order of the learned Commissioner of Income-tax (Appeals). It was also pleaded that the amendment which enable the Assessing Officer to refer the issue regarding valuation even in a case where the value is less than its fair market value is brought on the statute only with effect from July 1, 2012, which could not be applied to the case of the assessee as the amendment is not retrospective. 10. The assessee further objected to the adoption of sale value at Rs. 57,74,51,000 based on value adopted by the Collector of Stamps on the ground that when main value was taken at 60 per cent. then TDR value could not be taken at 100 per cent. and if the same is taken at 60 per cent. then the value would be not to the extent of Rs. 57,74,51,000 but it would be only a sum of Rs. 48,35,45,000 and such difference was brought out as per the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the Bombay High Court observed that their order shall not be an impediment to the income- tax authorities to adopt fair value. Thus, the Income-tax authorities should adopt fair value and not bound by apparent mistakes committed by stamp duty authorities." 13. In view of the aforementioned submissions it was claimed by the assessee that it will be judicious view if sale consideration is adopted as per value determined by the Joint Director, Town Planning (Valuation), Maharashtra Pune at Rs. 41.51 crores. 14. The learned Commissioner of Income-tax (Appeals) has rejected the contention of the assessee that stamp value should be adopted at Rs. 48,35,45,000, as according to the learned Commissioner of Income-tax (Appeals) the provisions of section 50C(1) are clearly applicable. The learned Commissioner of Income-tax (Appeals) further mentioned that the Chief Controlling Revenue Authority, Maharashtra, vide his order dated February 6, 2012, did not accept the application filed by the assessee against stamp valuation by observing that the assessee does not have locus standi against the said order. He also rejected the submission of the assessee for adoption of rate as determined b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction in rate by 60 per cent. as per its calculation quoted page 6-6 of this order in table-2 where it has computed the assessee's share of TDR at Rs. 14,08,59,132. Considering 60 per cent. of land area and 60 per cent. of value the amount comes to 5175.60 x 0.60 x 75,600 x 0.60. 13.4.3. The Collector of Stamps, Andheri has thus-not made any mistake and has already given 60 per cent. deduction for valuation of TDR and the appellant's submission that there is a mistake found to be not valid and even mischievous. It is pertinent to note that, i.e., Hotel Horizon Pvt. Ltd. the purchaser who paid stamp duty has not objected to the value of the property and even the value of TDR and it is the appellant who without locus standi has been filing appeal to the appellant forums of the Stamp Act and in the High Court did not object to the value before the Assessing Officer under section 50C(2) of the Income-tax Act. 1.3.5. As the valuation done by stamp valuation authorities more than the consideration received, and the appellant's objection to the correctness of valuation by stamp valuation authorities has been found to be not valid, it is held that the value of sale considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative submitted that the learned Commissioner of Income-tax (Appeals) has also committed an error in not accepting the valuation submitted by the assessee as on April 1, 1981, at a sum of Rs. 5,62,50,775 and has committed an error in relying upon the valuation done by the District Valuation Officer as on April 1, 1981, at Rs. 3,10,14,000. It was submitted that the learned Commissioner of Income-tax (Appeals) has failed to appreciate that the provisions of section 50C could not be applied in a case where there is no proof, even a suggestion that something more is paid over and above agreement price. For the purpose of valuation as on April 1, 1981 the learned authorised representative placed reliance upon the decision of the hon'ble Bombay High Court in the case of CIT v. Puja Prints [2014] 360 ITR 697 (Bom) to contend that for the purpose of ascertaining the fair market value as on April 1, 1981, reference to the District Valuation Officer can be made only in a case where value adopted by the assessee is less than the fair market value. If value adopted by the assessee is much more than the fair market value then reference to the Valuation Officer could not be made as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also been taken at 60 per cent. of the value. It was further submitted by the learned Departmental representative that the learned Commissioner of Income-tax (Appeals) is also right in rejecting the claim of the assessee regarding adoption of fair market value as on April 1, 1981, as per valuation submitted by the assessee in preference to report of the District Valuation Officer. Thus, it was submitted by the learned Departmental representative that the appeal filed by the assessee should be dismissed. 21. Before proceeding to decide the present appeal, we may mention here that during the course of hearing of the appeal, certain figures were submitted by the assessee in the shape of chart and the said chart was also given to the learned Departmental representative and during the course of such discussion some observations may have been made. However, when the hearing was concluded it was made clear that those observations may not be taken as pronouncement on any of the issue raised or discussed in the present appeal and the decision will be taken by the Bench only after due consideration of all the arguments and submissions made by the parties and after considering all the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (2), which prescribes that in a case where the assessee claimed before the Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority exceeds the fair market value of the property as on the date of the transfer and the value so adopted or assessed by the stamp valuation authority under sub-section (1) of section 50C has not been disputed in any appeal or revision or no reference has been made before any other authority, court or High Court, then the Assessing Officer may refer the valuation of the capital asset to the Valuation Officer of the Department. Thus, according to sub-section (2) in a case where the assessee claimed before the Assessing Officer that the value adopted or assessed by stamp valuation authority is exceeds the fair market value on the date of transfer and the assessee does not dispute the valuation done by the stamp valuation authority in any appeal or revision or reference then the Assessing Officer may refer the valuation of the said property to the Valuation Officer and as per sub-section (3) in case where valuation done by the Valuation Officer is less than the value adopted by stamp valuation authority then th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est and the duty payer has not appealed to this authority at any point of time. Moreover, the assessee did not file application within time limit stipulated under the law, i.e., 60 days from the receipt of impugned order. Therefore, the assessee does not have locus standi to approach the authority. The authority is not legally empowered to take any decision or give opinion when no cause of action exists under the Stamp Act for the implementation of which this authority has been created. As per the provision of section 50C(2) of the Income-tax Act, 1961 a mechanism for redressal of grievances has been provided in a case where the assessee disagrees with the valuation done by the stamp authorities and in this manner application filed by the assessee was considered to be non-maintainable. Not satisfied with the said order of the Chief Controlling Revenue Authority, Maharashtra State, Pune, the assessee filed a writ petition before the hon'ble Bombay High Court, which has been decided vide order dated May 3, 2012, in Writ Petition Lodg No. 776 of 2012 and copy of this order is filed at pages 115 to 118 of the paper book. It will be relevant to reproduce relevant portion of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence of long-term capital gain tax. 8. In light of the above, I am not inclined to exercise writ jurisdiction of this court to interfere with the impugned order. The petition is, therefore, dismissed. 9. The court is informed that the assessment order has been passed by the Assessing Officer of the Income-tax Department and the matter is now pending before the Commissioner of Income-tax. It is clarified that it will be open for the Commissioner of Income-tax to pass such orders as he deems appropriate with regard to the valuation of the subject property in accordance with law and the orders passed by the stamp and this order shall not be an impediment in that regard." 26. Subsequently, vide order dated May 15, 2013, certain mistakes in mentioning the dates was rectified and in paragraph 4 reproduced above and the date is correctly to be read as August 4, 2008. 27. In the light of aforementioned facts it can be said that the value adopted and assessed by the stamp valuation authority under sub-section (1) was disputed by the assessee in the appeal, revision and even before the hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1981, who has assessed the value at Rs. 7,08,94,016. During the course of hearing of the appeal neither the learned authorised representative referred to this valuation report nor any reliance was placed on the same. The said report was also not relied upon before the learned Commissioner of Income-tax (Appeals). Copy of the said valuation report is also not filed in the paper book. In ground No. 2 of the appeal no reference is made to the said valuation and reference is made only to the valuation done by M/s. Shah and Shah who valued the impugned property as on April 1, 1981, at Rs. 5,62,50,775. In view of these facts no cognizance is taken of the valuation report of Shri S. S. Rahalkar and cognizance is taken only of the valuation report of M/s. Shah and Shah, who has valued the property as on April 1, 1981 at Rs. 5,62,50,775. 31. In view of the above discussion ground No. 2 is allowed in the manner aforesaid. 32. Apropos ground No. 3 no particular arguments were submitted by the learned authorised representative and moreover for application of section 50C there is no requirement according to which the Department has to submit some proof or there should be some suggestions that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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