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TMI Blog2018 (6) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 250 of the Income-tax Act,1961 ("Act"), your appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1. Addition u/s.50C: Rs. 5.03,000/- 1.1 On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs. 5,03,000/- made by the Ld. AO u/s.50C of the Act in assessing the capital gains on sale of land at Shirgaon, Taluka Ambernath, Dist. Thane. 1.2 The Ld. CIT(A) failed to appreciate, and ought to have held, that the Ld. AO could not have made addition u/s.50C of the Act without first making a reference to the Valuation Officer, whether or not a specific request for the same was made by the appellant during the assessment proceedings. In view of above, the appellant prays that the addition of Rs. 5,03,000/- be deleted. 2. Addition of alleged bogus purchases: Rs. 19,92,426/- 2.1 On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs. 19,92,426/- made by the Ld. AO on account of alleged bogus purchases made from five parties. 2.2 The Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) on merits and learned CIT(A) accordingly adjudicated the issue against the assessee. The assessee pleaded before learned CIT(A) that AO should have referred the matter to Departmental Valuation Officer(DVO) and sought the valuation done from DVO but learned CIT(A) held that no purpose will be served by sending the matter to DVO for valuation as the assessee never raised this issue in assessment proceedings and by referring the same to DVO at appellate stage would only delay the proceedings. The assessee cited before learned CIT(A) decision of Hon'ble High Court of Calcutta in the case of Sunil Kumar Agarwal v. CIT reported in (2014) 47 taxmann.com 158(Cal.) but the matter was adjudicated against assessee by learned CIT(A) vide appellate order dated 17-11-2015 passed by learned CIT(A). 5. Now the assessee has come in an appeal before tribunal . It is contended by ld. Counsel for the assessee that the actual consideration as per sale deed of the plot of land sold was of Rs. 4,00,000/- while the value for payment of stamp duty adopted by Sub-Registrar, Ulhasnagar was Rs. 9,03,000/- and keeping in view provision of section 50C , the AO adopted value of Rs. 9,03,000/- as full valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter to DVO for determining full value of consideration of the plot of land sold for computing long term capital gains u/s 48. Hon'ble Calcutta High Court vide its decision in the case of Sh. Sunil Kumar Agarwal (supra) has clearly laid down that it is AO's duty to have given an option to assessee to have the valuation undertaken by DVO as is contemplated u/s 50C . The aforesaid decision of the Hon'ble Calcutta High Court is reproduced here under:- "6.We have considered the rival submissions advanced by the learned advocates appearing for the parties. The submission of Ms. Ghulghutia that the requirement of clauses a) and (b) of sub-Section (2) of Section 50C has not been met by the assessee, can hardly be accepted. The requirement of clause (b) of sub-Section (2) of Section 50C was evidently met, The only question is whether the requirement of clause (a) of sub-Section (2) of Section 50C was met by the assessee. 7. We have already set out hereinabove the recital appearing in the Deeds of Conveyance upon which the assessee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh adjudication thereafter, the said decision of tribunal is re-produced here under:- " 7. We have carefully considered the rival contentions and perused the material placed before us including the orders of authorities below and case law relied upon by the assessee. We find that the assessee has sold plot of land at Bandra in which he owned 1/3 share for a total consideration of Rs. 3,00,00,000/- and accordingly calculated capital gain and his share in the long term capital gain worked out to Rs. 84,01,050/-. The assessee after claiming deduction u/s 54 of the Act to the tune of Rs.,82,87,600/-, offered the balance long term capital gains of Rs. 1,33,450/- to tax. The AO upon finding that the actual consideration received was much lower than the value of stamp duty valuation substituted the same as FMV u/s 50C for the purpose of calculating the capital gains and accordingly framed the assessment. We further find from the order of the ld. CIT(A) that the assessee raked up the issue stating that he never agreed with the value of plot as determined by the stamp valuation authority in place of actual sale consideration as stated by the AO and even filed sworn affidavit before the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that his case was that the fair market value of the property could not be Rs. 35 lakhs as assessed by the District Sub Registrar. In a case of this nature the assessing officer should, in fairness, have given an option to the assessee to have the valuation made by the departmental valuation officer contemplated under Section 50C. As a matter of course, in all such cases the assessing officer should give an option to the assessee to have the valuation made by the departmental valuation officer. For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, 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 is made by the learned advocate representing the assessee, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3, 39,470/- 2 Impex Sales Corporation Rs. 5, 01, 132/- 3 Shivraj Traders Rs. 3, 37,500/- 4 Riddhi Siddhi Enterprises Rs. 5,00,000/- 5 Nilofar Trade Pvt. Ltd. Rs.3, 14,324/- Total Rs. 19, 92,426/- The above purchases were held to be bogus as the information was received by Revenue from Maharashtra VAT authorities that these firms/concerns are hawala dealers and were issuing bogus bills without supplying any material. The assessee was asked to submit the details such as purchases bills , confirmations from these parties , transport receipts, stock register, utilisation/consumption details . The assessee only submitted purchase bills and submitted that the payments were made by cheque. The copies of ledger accounts of these parties as is appearing in the books of accounts of the assessee were also submitted by assessee before the AO but however, stock register, transport receipts, evidences to prove movement of material, utilisation/ consumption details could not be submitted . Notices u/s. 133(6) were issued by the AO which returned back in 4 out of 5 cases as parties were not existing on the respective addresses. Inspector was deputed by the AO to make f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies were made by Inspector deputed by AO , who reported that these are bogus parties and are not existing on the given addresses and they are not doing any genuine business of sales and purchases of material. The assessee was asked by AO to submit all details such as transport receipts, challans , invoices, bank statements, consumption/utilisation records of material for business purposes, stock register etc. to prove genuineness of the purchases and its consumption/utilisation for business purposes. The assessee only gave invoices and ledger accounts of these parties. The assessee contended that payments were made through cheques . the assessee did not produced stock records, utilisation/consumption records to prove consumption of material for business purposes nor transport receipts, stock register, challans etc were produced to evidence movement of material. The assessee surrendered this amount before the authorities below . Before us also nothing concrete is brought on record to justify that these purchases are genuine purchases and the material was consumed/utilised for business purposes. We have gone through the ledger account of the parties produced before us and we have obs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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