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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 ..... eference to the Departmental valuation officer (DVO) for valuing the property. 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 - AO should have referred to the Departmental Valuation cell for valuing the property as provided in section 50C(2). 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 - Appeals filed by the revenue are allowed for statistical purposes. - I.T.A.No.149/Vizag/2017, C.O. No.56/vizag/2017 And I.T.A.No.190/Vizag/2017, C.O. No.55/Vizag/2017, I.T.A.No.191/Vizag/2017 And C.O. No.54/Vizag/2017 - - - Dated:- 11-7-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri M.N. Murthy Naik, DR For The Respondent : Shri G.V.N. Hari, AR ORDER PER Bench: These appeals filed by the revenue are directed against differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that in the other co-owners share of property, the sub-registrar has reduced the area occupied by the tenant and valued the same on rent capitalization method. In the case of other co-owners Smt. Leelavati Leeladhar Tucker and others for the share of 50% (8 annas) of the property, the market value determined by the sub-registrar was ₹ 9,93,94,000/- and in the case of the assessee, the market value determined by the SRO was ₹ 21,69,07,000/-, which was representing the share of 3 annas out of total 16 Annas. In the assessee s case, the sub-registrar has not reduced the area occupied by the tenant. The Ld. A.R. argued before the A.O. that the value adopted by the sub-registrar in the case of the assessee was exceeding fair market value, therefore requested the A.O. to accept the actual sale consideration as per the sale deed and to complete the assessment proceedings. Not being convinced with the explanation of the assessee, the A.O. adopted the valuation adopted by the SRO for the purpose of payment of stamp duty at ₹ 21,69,07,000/- and assessed the assessee s share of ₹ 5,42,26,750/- to the long term capital gains and taxed the balance amount of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the assessee had admitted a sum of ₹ 3.00 crores in the Income tax return. Out of the long term capital gains admitted, the assessee also claimed deduction u/s 54F of the Act amounting to ₹ 1,61,14,559/-. As per section 50C of the Act, the assessee required to adopt the value determined by the authority of State Government for the purpose of payment of stamp duty in respect of the transfer of the property. The assessee has not made any dispute with regard to the stamp valuation authorities for fixing the valuation at higher rate. Therefore, the Ld. D.R. argued that the A.O. has rightly brought to tax the difference amount, accordingly, submitted that the A.O. s order required to be upheld. 5. On the other hand, the ld. A.R. submitted that the property was under occupation of the tenant. There was no approach road and the land was marked for government acquisition and also under Railway buffer reserve systems. All these factors contributed to fetch the least price compared to the prevailing market rate. Further, the ld. A.R. argued that the assessee brought to the notice of the A.O. with regard to the sale of property by the co-owner on 31.3.2010, wherein the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proportion fixed by the Award, the partners of the said firm on dissolution became co-owners as tenants in common in the said lands described in the schedule to the Deed of Conveyance dated 2nd December, 1940 and each of them were holding undivided share in the following proportion: Sl. No. Name of the party Share of property 1. Narasingji Manrupji 3 annas 2. Gulabchand Narsingji 2 annas 3. Rekabchand Bhutaji 3 annas The heir s of Sri Rekabchand Bhutaji (3 annas share holder) are as under: Sl. No. Name Relationship with Rekabchand Bhutaji 1. Smt. Jadavi Bai W/o (Late) Sri Ghewarchand Daughter-in-law 2. Madanlal Ghewarchand Jain Daughter-in-law 3. Kishore Kumar Ghewarchand Jain Grand son 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, though the assessee raised the objection, the A.O. proceeded to complete the assessment adopting value adopted by the sub-registrar office. As observed from the order of the Ld. CIT(A), 50% share of the property belonging to Smt. Leelavathi Tucker and 4 others comprising of 8 annas or 50% in the total property was sold for a consideration of ₹ 15 crores and the sub-registrar valued the property at ₹ 9,93,94,000/- on 20/10/2010 as under: a) Total area - 33,247.57 sq.mtrs. b) Occupied tenant - 24,823.80 sq.mtrs. c) Balance FSI (33247.57 24,823.80) - 8,423.77 sq.mtrs. d) Value of balance of FSI 8,423.77 x 23,500 - 19,79,58,595/- e) Value of 50% share (19,79,58,595 x 50%) - 9,89,79,297/- f) Rental value (3700x112) - Rs.4,14,400/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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), (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. 92[Explanation 1].-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 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bench of Chennai tribunal in the case of S.D. Vimalchand Jain Vs. ITO, (2016) 45 ITR (Trib) 0628 (Chennai), referred the matter back to the file of the AO for fresh consideration. The coordinate bench of Agra Tribunal in Udha Jain vs. ITO, reported in (2016) 46 CCH 0573 taken the similar view and remitted the matter back to the file of AO. Accordingly, we set aside the order of the Ld. CIT(A) and remit the matter back to the file of the A.O. to re-adjudicate the issue afresh after the reference made to the Valuation officer on merits and as per law. Since we have remitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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