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TMI Blog2017 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation. There cannot be an automatic presumption that a purchaser of the property had paid consideration higher than the sale consideration reflected in the sale deed, the moment the stamp valuation authority of the State Government demanded and the parties paid higher stamp duty. This may be one of the factors which may prompt the Assessing Officer to probe further. This leads us to the second reason viz. this information that the assessee had purchased an immovable property for a declared sale consideration of ₹ 60 lakhs and that at the time of registration of the sale deed, he was asked to pay additional stamp duty of ₹ 1,34,256/was very much before the Assessing Officer even during the original assessment as can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an additional stamp duty of ₹ 1,34,256/for the said sale. In the order of assessment, the Assessing Officer made no addition on the premise that the assessee had invested amount larger than the reflected sale consideration of ₹ 60 lakhs. He however, on 29.12.2010 had made reference to the District Valuation Officer ('DVO' for short) under section 142A of the Act, calling for his opinion on the fair market value of the property in question. The valuer's report was submitted on 16.07.2012 in which, the fair market value as on the date of the sale was estimated at ₹ 1,71,94,072/. 4. After receipt of the valuer's report, the Assessing Officer issued the impugned notice dated 04.12.2012 seeking to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arring assessment, the reference was made u/s. 142A to the valuation cell on 29/12/2010 for determining the fair market value of the property in question. On the basis of the above reference, the valuation cell has submitted the report on 16/7/2012 determining fair market value of the property after taking in to account all the items exited/executed in the building as on date of inspection. The weighted average cost index is based on the yearwise expenditure details made available by the assessee. The fair market value determined by the valuation cell is ₹ 1,71,94,072/as on 11/5/2007 where as the purchase deed was executed by the assessee of ₹ 60 lacs only. Hence, the assessee has undervalued the property to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of the said property was not examined by the Assessing Officer in the original assessment. Even if the reference to the DVO was invalid, report can be relied upon for the purpose of reopening of the assessment. In this context, she relied on the judgment of the Supreme Court in case of Pooran Mal v. Director of Inspection (Investigation) of IncomeTax, New Delhi, reported in (93) ITR 505 . She also drew our attention to a judgment of Division Bench of this Court in case of Kanaiyalal Dhansukhlal Sopriwala v. District Valuation Officer and another , reported in 391 ITR 56 , in which, considering the facts of the case, reference made by the Assessing Officer to the DVO for estimation of the property sold by the assessee ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the eye of law and therefore, we hereby quash and set aside the communication dated 29.12.2010 as also the consequent communication dated 10.3.2011 and 26.4.2011 respectively. The petition is allowed to the aforesaid extent. Rule is made absolute. 10. Thus, the very reference to the DVO was held to be invalid. We are not required to go into the reasons why the Court came to such a conclusion since it is not the case of the Revenue that this judgment has not attained finality. That being the position, we must proceed on the basis that the reference to the DVO which eventually led to the DVO making his report dated 16.07.2012 itself was found to be invalid. Once a reference was found to be invalid, there is thereafter no sanctity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means that the assessee had made an unaccounted investment in purchase of the property. 12. For two reasons, this information would not permit the Assessing Officer to reopen the assessment. Firstly, there is no presumption in law that whenever the Stamp Duty authority collects duty higher than what would be payable on the declared sale consideration, it would automatically mean that the purchaser had paid a sum in excess of the reflected sale consideration. The statutory presumption flowing from section 50C of the Act is in relation to the capital gain to be assessed in the hands of the seller. This presumption is also rebuttable if the assessee disputes the stamp duty valuation. In any case, there cannot be an automatic presumption th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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