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TMI Blog2017 (6) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... y of litigation in any transactions relating to the property. Assessee had during the course of the valuation proceedings before ld. DVO, brought to his attention, the existence of the litigation in the objections filed by him. It was after considering such objections that DVO made the valuation. Thus, the value determined by the DVO was after considering the effect of the pending litigation. Assessee thus, was not been able to rebut the case of the Revenue that DVO had considered all the material filed by the assessee including the details of the suit pending on the subject property. Sub Section (3) to Sec. 50C of the Act clearly mandates adoption of the value fixed by the DVO when such value was less than what was adopted by the Revenue authorities for fixing the stamp value. Admittedly, DVO had taken FMV at I74,76,054/- which was less than the value of I78,70,203/- adopted by the Registration authorities. Coming to the decision of Lucknow Bench of the Tribunal in the case of Hari Om Gupta (2016 (1) TMI 486 - ITAT LUCKNOW ) relied on by the ld. Authorised Representative, the sale was considered as done under distress, since assessee concerned was not able to pay dues to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn for the capital gains arising from such transaction. In my opinion, assessee having not filed any return voluntarily, the proceedings resulted only in a first assessment. Therefore assessee s ground challenging the reopening has no merits. Grounds 2 3 are dismissed. 5. Vide its grounds 4 to 7, assessee is aggrieved on the computation of long term capital gains at I16,84,760/- against I40,500/- declared by him. 6. As mentioned earlier assessee had sold a property with other three co-owners on 27.12.2006. Assessee had declared long term capital gains of I 40,500/- in the return filed pursuant to the notice issued u/s.148 of the Act. As per ld. Assessing Officer sale consideration though mentioned in the sale deed as I10,00,000/-, the market value of the property was much higher and stamp duty was on such higher value. When the assessee was queried on it, his reply was that there was a suit pending before Jurisdictional High Court filed by M/s. Mylapore Gymkhana for declaration of title of the subject property and hence the sale was under distress. Assessee also requested ld. Assessing Officer to refer the Valuation to the DVO. DVO vide its report dated 24.03.2015 estima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) had clearly held that in a distress sale the procedure mentioned in Sec. 50C of the Act could never be applied. According to him, assessee was constrained to sell the subject property at a rate lower than the market value due to the pending litigation. Hence to substitute the consideration which was actually paid by the buyer to the seller with market value would give rise to fictitious income. According to him, the price mentioned by the assessee in the sale deed alone could be considered for working out capital gains. 10. Per contra, ld. Departmental Representative strongly supported the orders of the authorities below. 11. I have considered the rival contentions and perused the orders of the authorities below. It is true that there was a pending litigation on the property which was sold by the assessee. This was also brought to the notice of the ld. Assessing Officer/DVO. However, Jurisdictional High Court had not restrained assessee from alienating or dealing with the property. What it directed was only to indicate the pendency of litigation in any transactions relating to the property. Assessee had during the course of the valuation proceedings before ld. DVO, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation For the purposes of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer . Sub Section (3) to Sec. 50C of the Act clearly mandates adoption of the value fixed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no valuation done by a Valuation Officer for estimating the value of the property as on 01.04.1981. Further, according to him, what was to be adopted was the guideline value based on Government records. He held that Sec. 55A of the Act had no application in such a situation and directed the ld. Assessing Officer to apply the guideline value as on 01.04.1981, at I22,000/-, per ground for arriving at the cost of acquisition. 15. Now before me, ld. Authorised Representative reiterated the contentions taken by the assessee before ld. Commissioner of Income Tax (Appeals). According to him, prior to amendment to clause (a) to Sec. 55A through Finance Act, 2012 which came into effect from 01.07.2012, a reference could not be made to the Valuation Officer when the value claimed by the assessee was more than the FMV. 16. Per contra, ld. Departmental Representative strongly supported the orders of the authorities below. 17. I have considered the rival contentions and perused the orders of the authorities below. Assessee had adopted cost as on 01.04.1981 at I1,42,000/- for 4000 sq.ft which translated to I85,200/- per ground. Ld. Commissioner of Income Tax (Appeals) had considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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