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TMI Blog2009 (7) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... or ₹ 12,50,000/- being price recorded in the transfer deed. However, the Stamp Valuation Authorities worked out that the valuation at ₹ 16,66,400/- and charged additional stamp duty at ₹ 39,980/-. While finalizing the assessment, the Assessing Officer pointed out that the difference between recorded purchase price and valuation done by Stamp Valuation Authorities worked out at ₹ 4,16,400/- would be treated as an investment made by the assessee, in purchase of the plot, not recorded in the regular books of account. Accordingly, the Assessing Officer invoked section 69 of the Act and made the addition of ₹ 4,16,400/-. While making this addition the Assessing Officer noted that even though the provisions of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es adopted arbitrary method of valuing the property. The aggrieved party has no alternative but to accept the said valuation so as to get proper title over the property. The valuation done by Stamp Valuation Authorities cannot be taken as a real amount of consideration paid by the purchaser to the seller as it is done for limited purposes of levying stamp duty by the State Government authorities. The Assessing Officer has to show that assessee has actually made the investment not recorded in the books. Further, section 50C could not be invoked in the case of the assessee as it can be invoked in the case of seller of the land and for calculating capital gains only. Further, the Assessing Officer did not reject the books of account, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities in place of declared consideration. It can be done in the case of seller then, transaction being the same it has to be also done in the case of purchaser. 6. We have heard the rival submissions and perused the material on record. The only issue involved is whether difference between apparent consideration recorded in the transfer deed and valuation done by the Stamp Valuation Authorities for levying stamp duty can be treated as undisclosed investment to be taxed u/s 69. In our considered view, this presumption raised by the Assessing Officer and CIT(A) cannot be legally sustained. Section 50C creates a legal fiction thereby apparent consideration is substituted by valuation done by Stamp Valuation Authorities and capital gains is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (1985) 155 ITGR 711 (SC) held that legal fictions are created only for some definite purpose and they must be limited to that purpose and should not be extended beyond that legitimate field. In CIT v. Bharani Pictures (1981) 129 ITR 244 (Mad.) it is held that legal fictions are for a definite purpose and are limited to the purpose for which they are created and should not be extended beyond its legitimate field. Statutory fiction introduced in one enactment cannot be incorporated in other Act. The point that legal fiction cannot be extended to a new field was highlighted by Hon ble Madras High Court in CIT v. Rajam T.S. (1988) 125 ITR 207(Mad.) wherein it is held that section 41(2) creates a legal fiction under which the balancing charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther and, therefore, cannot be invoked by Assessing Officer to tax the difference in the hands of the purchaser. 8. Hon ble Madras High Court in CGT v. R. Damodaran (2001) 247 ITR 698 held that Stamp Valuation Authorities have their own method of evaluating the property. Merely because for the purpose of stamp duty, property is valued at higher cost, it cannot be said that assessee has made more payment than what is stated in the sale deed. Hon ble Allahabad High Court in Dinesh Kumar Mittal v. ITO (1992) 193 ITR 770 (All.) qaushed the order of authorities below, wherein half of the difference between the amount paid and the value for purposes of stamp duty was added as income of the assessee by the Assessing Officer. It is held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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