9911796707
TMI Blog2017 (1) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the property was shown to be sold at Rs. 39 lakhs and the assessee's share being 50% comes to Rs. 19,50,000/- and after deducting the indexed cost and consideration paid to one Sri P.C. Srimal, the assessee had arrived at a net long term capital gain of Rs. 14,23,800/-. On perusal of the sale deed and other documents submitted by the assessee's counsel, the AO found that the stamp valuation authority has taken the market value of the property at Rs. 1,35,57,500/- for the purpose of levying of stamp duty. Accordingly, the AO was of the view that the case of the assessee attracts provisions of section 50C of the Act as per which he has to adopt the value adopted by the stamp valuation authority for the purpose of computation of capital gains. 2.1 The AO, therefore, issued a show cause notice dated 20/06/2013 to the assessee asking her explanation as to why the value of Rs. 1,35,57,500/- adopted by the stamp valuation authority for the purpose of levying stamp duty should not be adopted for the purpose of computation of capital gains as per section 50C of the Act. The AR of the assessee, inter-alia, submitted that the consideration received by her may be adopted as fair value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward by the assessee for the actual consideration being less than the value adopted for registration purposes. He, therefore, concluded that the addition made by the AO is without following the due process of law and, hence, the same cannot be sustained and accordingly the addition is deleted by the CIT(A). 4. Aggrieved by the order of the CIT(A), the revenue is in appeal before us raising the following grounds of appeal: "1. Whether the Ld. CIT(A) is correct on facts and circumstances in deleting the addition made by the AO by adopting the guide line value of the property for stamp duty purpose in place of stated consideration in the sale deed for the purpose of computing long term capital gains on the ground that the Assessing Officer has not referred the matter to departmental valuation officer. 2. Whether the Ld. CIT(A) has erred on facts and circumstances holding that reference to departmental valuation officer u/s 50C(2)(a) is mandatory for Assessing Officer while determining value of the property as per the provisions of section 50C ignoring that the expression used is "may" and "shall". 3. Without prejudice to the above, the Ld. CIT(A) ought to have remanded the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the AO to obtain the value by referring the matter to DVO. In other words, he chose to brush aside the submissions, by not referring the matter to the DVO. 7.1 The issue that comes up for our consideration is as to whether the AO can be given a second opportunity to make good his deficiencies at the cost of expenditure to be incurred by the assessee by continuing the litigation for a further period, particularly, in view of the period of limitation prescribed u/s 153 of the Act. The Hon'ble Supreme Court in the case of Prashuram Pottery Works Co. Ltd. Vs. ITO, 106 ITR 1, observed that no litigation should continue beyond a period of time prescribed under the Act. Relevant observations of the Hon'ble Court are extracted below, for immediate reference: "It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the AO/DVO at this stage to prove that the sale price declared by her is reasonable. 7.4 As could be noticed from the order passed by the AO, assessee raised a specific plea that the tenants have not vacated the property even as on the date of sale of property and they had filed cases against their vacation. Literally, there were no purchasers for this litigated property and, hence, the property was sold at a rate lesser than the market value with a clause in the sale deed that the purchaser would deal with the tenants regarding their vacation etc. it was also stated that the property was fully occupied by seven tenants, who are in possession of their respective premises. Their names and the fact that they are paying a rent of only Rs. 450/- per month as on the date of sale have also been annexed to the sale deed. The sale deed also contains a clause that the property was sold under "as is where is" condition and the purchaser has agreed to acquire the same from the vendors on the same basis for a consideration of Rs. 39 lakhs. It was also explained that her father and grand father in their life time could not take possession of the property nor could get the tenants vacated. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value cannot be adopted. In these circumstances, the Courts time and gain held that reference u/s 50C(2) of the IT Act is mandatory and the AO having failed to follow the provisions of the Act, he should not be given one more chance to refer the matter to the DVO. Recently, the Hon'ble Supreme Court in the case of Manish Mahaeswari Vs. ACIT and another, and Indore Construction P. Ltd. Vs. CIT, [2007] 289 ITR 341 (SC) vis-à-vis the provisions of section 153C of the Act, observed that if the AO has not recorded his satisfaction for issue of notice u/s 153C of the Act, the proceedings deserve to be quashed rather than giving the AO another chance to record proper reasons. The same principle holds good even in this case; when the AO has not followed the procedure prescribed in law, the addition made deserved to be deleted. Under these circumstances, in our considered view, the order of the CIT(A) in deleting the addition made by the AO, does not call for any interference. Accordingly, we uphold the order of the CIT(A) and dismiss the grounds raised by the revenue.
8. In the result, appeal of the revenue is dismissed.
Pronounced in the open court on 4th January, 2017. X X X X Extracts X X X X X X X X Extracts X X X X
|
