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TMI Blog2018 (7) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (hereinafter called as 'the Act') for the purpose of computing the long term capital gains on sale of immovable property. During the year under consideration, the assessee along with three other co-owners sold the property situated at Nahur village, Mumbai and disclosed the toal sale consideration of the property at Rs. 12.00 crores and offered 1/4th of his share of Rs. 3.00 crores to capital gains. The A.O. collected the sale deed bearing No.ADJ/2092/11/K dated 29.9.2011 and found that the value adopted by the Stamps Valuation Authority of State Government (herein after referred to as SRO) was valued at Rs. 21,69,07,000/-. Accordingly, 1/4th share of the assessee worked out to Rs. 5,42,26,750/- against the capital gains admitted by the assessee at Rs. 3.00 crores. The A.O. has called for the explanation of the assessee as to why the sale consideration should not be adopted as determined by the SRO and the difference amount should not be brought to tax. In response to the notice issued by the A.O., the assessee submitted their explanation stating that the property in question was leased out on 2.1.1975 for a period of 94 years and the lease period has not yet expired. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument No.ADJ/3430/10/K. Their share of 50% was valued by sub-registrar at Rs. 9,93,94,000/- crores. While valuing the 50% of undivided share belonging to Smt. Leelavati Leeladhar Tucker and 4 others, the sub-registrar reduced the area occupied by the tenant and valued the same on rent capitalization method, whereas in the case of the assessee, no such reduction was allowed. The Ld. CIT(A) further observed that the assessee has raised the objection during the assessment proceedings for adoption of the valuation made by the subregistrar as excessive, hence, the assessing officer should have referred the valuation to the DVO as provided by sub-section 2 of section 50C of the Act. Accordingly, the Ld. CIT(A) allowed the appeal of the assessee. 4. Aggrieved by the order of the CIT(A), the revenue carried the matter to the Tribunal. During the appeal hearing, the Ld. D.R. submitted that the assessee owns 3 Annas ( out of 16 annas) share of immovable property in survey Nos.33(1), 34(1), 37, 38, 44(1), 54(3) and 102 situated at Nahur village, Mumbai in the registration District and sub- district of Mumbai city, Mumbai within the limits of Municipal Corporation of Greater Mumbai. The pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopting the value adopted by the sub-registrar office. Since the assessee has raised the objection for adopting the valuation, the Ld. A.R. argued that the A.O. should have referred the valuation to the Departmental Valuation Officer. Non reference to the departmental valuation cell renders the addition made unsustainable, accordingly, argued that the CIT(A) has rightly deleted the addition and no interference is called for. 6. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. We have gone through the papers and documents placed before us. As per the details in the assessment order, on 2.12.1940, Sri Narsingji Manrupji, Sri Gulabchand Narsingji and Sri Rekabchand Bhutaji as partners of M/s. Bhuta Manrupji & Co and Sri Pragji Ramji Thakkar have purchased the immovable properties bearing S.Nos.33(1), 34(1), 37, 38, 44(1), 54(3) and 101(2) situated at Nahur village, Mumbai in the Registration District and Sub District of Mumbai City and Mumbai suburban within the limits of Municipal Corporation of Greater Mumbai. Later, due to differences of opinion among the partners, the dispute was referred to the Arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the co-owners of the property proposing to adopt the stamp duty valuation for the purpose of capital gains as per section 50C of IT Act.. In response to the notices issued by the A.O., the assesses have filed their objections explaining the reasons for receipt of less consideration and also submitted that valuation made by the sub-registrar for the purpose of stamp duty is in excess of market value. The assessee also furnished a chart explaining that the value of the property of the other co-owners i.e Leelavati Leeladhar Tucker and others which was about 50% or 8 annas was sold on 30.10.2010 and the SRO valued the property at Rs. 9,93,94,000/- @ Rs. 23,500/- per sq.mtr and reduced the market value of the area occupied by the tenant and valued the same on rent capitalization method, whereas, in the case of assessee no such reduction was allowed. The Ld. A.R. argued that though the co-owners have sold the property one year prior to the sale of the property by the assessee and there was no such steep increase of prices in the land in the intervening period. However, though the assessee raised the objection, the A.O. proceeded to complete the assessment adopting value adopted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C of the Act. The Hon'ble High Court of Allahabad decision in the case of Dinesh Kumar Mittal Vs. ITO 193 ITR 770 (1991) was also related to unexplained investment and the assessment year involved is 1984-85 before introduction of section 50C of the Act. Therefore, all the case laws relied upon by the Ld. CIT(A) has no relevance to the assessee's case and has no application. 9. In this connection, it is pertinent to go through section 50C of the Act which reads as under: (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed 91 [or assessable] by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed 91 [or assessable] by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer 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), ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stamp duties but objected for adoption of the same for capital gains. The assessee explained that SRO value was not disputed because of payment of stamp duty by the buyer. The assessee also did not request the AO for making reference to the Departmental valuation officer (DVO) for valuing the property. However the assessee brought on record regarding the non exclusion of tenants share and complexities involved in sale of the property and for getting the lesser rate. Therefore in all fairness the AO should have referred to the Departmental Valuation cell for valuing the property as provided in section 50C(2) of IT Act. Since the AO has ignored the objections of the assessee and failed to refer the valuation of property to the DVO, we are of the opinion that the case should be remitted back to the file of the A.O. to make reference to the DVO to determine the fair market value of the property for the purpose of computation of capital gains. 10. On the similar facts the coordinate bench of ITAT 'A' Bench Chennai in ITA No.2115/Mds/2016 for the assessment year 2005-06 dated 28.10.2016 remitted the matter back to the file of the A.O. for readjudication. Similarly Hon'ble coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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