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TMI Blog2015 (5) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... documented price in sale deed for the purposes of capital gains computation 3. Briefly stated, the facts of the case are as follows. The assessee is an individual who had transferred a plot of land vide sale deed dated 03.04.2007. The declared consideration in the sale deed was Rs. 23,00,000/-. In the return of income filed, while computing the capital gains the cost of land was declared at Rs. 22,35,087/-, which included the cost of improvement of Rs. 1,29,805/-. The short term capital gains of Rs. 64,913/- was declared. However, the stamp valuation authority adopted the value of the land at Rs. 57,58,750/- for the purposes of payment of stamp duty. In the course of assessment proceedings, the Assessing Officer confronted the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) was that the undated valuation report was made on 31.03.2007 i.e. much prior to passing of the assessment order (assessment order was passed on 30.11.2010) and there was no reason for the assessee, not producing the valuation report, during the course of assessment. The CIT (A) rejected the contentions of the assessee and dismissed the appeal. The relevant finding of the CIT (A) reads as follows:- " The appellant's case does not falls under any of the conditions mentioned under rule 46A. Therefore the application made by the appellant is rejected. It is reiterated that the valuation as per the undated valuation report was made on 31.3.2007, and the assessment order u/s 143(3) was passed on 30.11.2010; the AO had raised the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sarwan Kumar vs. ITO (supra) have held where an assessee had claimed before the Assessing Officer that the value of land and building assessed by the stamp duty valuation authority exceeds the fair market value of the property, then in terms of section 50C(2)(a), the Assessing Officer ought to have referred the matter to the valuation officer instead of straightway deeming value adopted by the stamp duty valuation authority as the full value of the consideration. The Tribunal, after considering the precedents on the subject, had held as follows :- "6. Having gone through the decisions relied upon by the Ld. AR we find that it is now an established proposition of law that where an assessee had claimed before the AO that value of land and bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-section (1) of section 50C are further circumscribed by sub-section (2) of section 50C. In terms of clause (a) of sub-section (2) of section 50C, it is provided that where an assessee claims before the Assessing Officer that the value adopted or assessed by the Stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, then the Assessing Officer may refer valuation of the capital asset to the Valuation Officer. In instant case, factually it is evident that the assessee had claimed in the return of income itself that the value adopted by the stamp valuation authority exceeded the fair market value as on the date of transfer as provided in section 50C(2)(a). Under these ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of properties and thereafter to adopt valuation for working out the capital gains in view of the provisions of section 50C(2) of the Act. Similar are the facts of the present case before us wherein before the AO the assessee had claimed that value of land and building assessed by stamp valuation authority exceeded fair market value of property but the AO had denied the reference u/s 50C to the Valuation Officer with this finding "also, it is held there is no need to refer the matter to departmental valuation officer as stipulated in section 50C(2). The section 50C(s) uses the word May and not shall refer the matter to the valuation officer defined u/s 2(r) of the W.T. Act 1957. Sufficient evidence has not been produced before the undersigne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after affording opportunity of being heard to the assessee. The grounds are thus allowed for statistical purposes." 9. In the instant case, the assessee had raised a plea that the fair market value of the impugned property is below the circle rate. Moreover, we find that the assessee had taken up a specific ground before the CIT (A) that the impugned property sold ought to have been referred for valuation since the fair market value was less than the circle rate. In the instant case, since specific claim was raised by the assessee as regards fair market value being less than the circle rate, going by the dictum laid down by the Tribunal in the case of Sarwan Kumar vs. ITO (supra), the Assessing Officer ought to have referred the matter to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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