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TMI Blog2017 (12) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... e given an option to the assessee to have the valuation made by the Departmental Valuation Officer (DVO) contemplated u/ s 50C. Therefore as a matter of course, in all such cases the AO should give an option to the assessee to have the valuation made by the DVO. The valuation by the DVO is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer was made the AO, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. For the reasons set out above, and with the observations as above, we remit the matter to the file of the AO for recomputation of taxable capital gains. The AO shall decide the matter afresh in accordance with the law, by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations of plot no. 1657P, Sector 13, Hisar at ₹ 60,54,000.00 being value taken by the stamp valuation authorities as against the sale consideration actually received at ₹ 45,00,000.00 by applying the provisions of Sec. 50C of the Income Tax Act 1961, that without prejudice to the aforesaid grievance the CIT(A) ought to have adopted the actual sale consideration of the said plot at ₹ 45,00,000.00 in which appellant assessee was having 1/3rd share only and the relief is prayed to be granted. 5. The additional grounds of appeal is prayed to be taken into consideration while adjudicating the matter, since the same escaped to be raised earlier as the same goes to the roots of the case and had a great bearing to the matter involved in this appeal which read as under: Because the transfer of said plot was mutually agreed between the parties prior to 31st March 2007(A.Y 2007-08) at the time when the collectorrate rate viz. a viz. fair market value were quite on the lower side as alleged and compared to the Assessment Year 2008-09(enhanced quite disproportionately), accordingly the fair market value of the said plot stand at ₹ 45,00,000.00 the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It was further submitted as under:- With reference to the capital gain accrued/ arosed on transfer of plot bearing No. 1657-P section 013-P, Huda Hisar of which the assessee was the owner of 1/3rd share say about 336 sq yards. The assessee received ₹ 1500000/- on account of this 1/3rd share, since the total consideration was received through bank drafts as mentioned in the above referred transfer deed which was registered by the registration authority Sub-Registrar Hisar. However, the value of the said plot was deemed at ₹ 6054000/- by the stamp valuation registration authority in respect of the said transferred plot, contrary to the fact that the actual consideration received by the transferor was 15 laks (1/3 share of 4500000/0) and it is quite immaterial that the sub-registrar/ stamp valuation authority valued the said plot at the so called collector rate which are imposed at the whims and arbitrary decisions of the state officials and are subject to discretionary relief by the SDM/ collector and the commissioner when contested, meaning thereby there is no hard and far yard stick for fixing the stamp valuation for the registration. In as much as there is har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the provisions of section 50C of the Act, the AO issued show cause as to why the sale consideration should not be taken at ₹ 60,54,000/- as against C 45.00 lacs declared for the purpose of computation of capital gains. In response, the assessee contended before the AO that the actual sale consideration was only C 45.00 lacs and it is immaterial that Stamp Valuation Authority valued the said plot at the so called Collector's rate which are imposed at the whims and arbitrary decisions of the State officials and are subject to discretionary relief by the SDM/Collector when contested in appeal, meaning thereby that there is no hard and fast yard stick for fixing the stamp valuation for registration. 2.3 Relying upon the provisions of section 50C and the intent of Legislature in insertion of this section by Finance Act, 2002 w.e.f. 1.4.2003, the AO rejected the contention of the assessee. The AO concluded that had there been any grievance to the assessee from the Registration Authorities, he would certainly preferred appeal to the concerned authorities, but nothing has been submitted to show that such appeal was filed. The AO further discarded the affidavit furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en done in the instant case. The AR further relied upon the case law of jurisdictional High Court in CIT Vs Chandni Bhuchar [2010] 229 CTR 190 (P H) wherein it was held that in the absence of any admissible evidence, valuation done by Stamp Duty Authorities could not be taken as actual sale consideration and the value shown in the sale deed has to be accepted. In the instance case the AO failed to bring any positive evidence on record indicating that the assessee has paid anything more than the amount disclosed in the sale deed. 4. I have considered the issue and the submissions made by the AR. It is not in dispute that the Sub-Registrar assessed the value of the asset at ₹ 60,54,000/- as against sale consideration of C 45.00 lacs shown in the sale deed. It was stated by the AR himself that the Sub-Registrar refused registration to transfer the plot at the agreed consideration. I have perused the memo issued by Financial Commissioner Secretary, Revenue Department, Haryana. The gist of the memo is that the Deputy Commissioners have to constitute committees to undertake valuation of different categories of land in rural and urban areas and thereafter issue suitable guid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of computation of capital gains as it is common knowledge that significant part of the real estate transactions are transacted in cash and not reported. It is with the intention of levying and collecting correct capital gains tax, this deeming provision was introduced. In the facts of the present case, the property has been assessed by the Sub-Registrar as per the extant provisions and the Memo of the Govt. of Haryana and no case has been made out by the assessee that the value assessed by Sub-Registrar exceeds the FMV. Therefore, the action of the AO in adopting the value assessed by the Sub-Registrar for the purpose of computation of capital gains as per the provisions of section 50C is upheld and the grounds of appeal are dismissed. Therefore, the assessee has preferred an appeal before us. 5. The ld AR has reiterated the same contention which were raised before the lower authorities. He further stressed upon the page No. 15 of the paper book wherein, the objection has been raised. He further submitted that the assessee is merely 1/3rd owner of the property and in case of other two owners no action has been taken by the revenue and therefore on the principle of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted the price fixed by the District Sub Registrar for stamp duty purposes as the fair market value of the property because the assessee has nothing to do in the matter. Stamp duty is payable by the purchaser it is for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub-Registrar, have claimed anything more than the agreed consideration of a sum of ₹ 10 lakhs which, according to the assessee, was the highest prevailing market price. It would follow automatically that his case was that the fair market value of the property could not be ₹ 35 lakhs as assessed by the District Sub Registrar. In a case of this nature the AO should, in fairness, have given an option to the assessee to have the valuation made by the Departmental Valuation Officer (DVO) contemplated u/ s 50C. Therefore as a matter of course, in all such cases the AO should give an option to the assessee to have the valuation made by the DVO. The valuation by the DVO is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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