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TMI Blog2017 (10) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... - Shri Kul Bharat, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri Rajeev Sogani ( CA ) Revenue by : Shri Prithvi Raj Meena (Addl. CIT) ORDER Shri Kul Bharat, J.M. This appeal by the assessee is directed against the order of ld. CIT (A)-III, Jaipur dated 27.09.2016 pertaining to A.Y. 2013-14. The assessee has raised the following grounds of appeal :- 1. The learned Appellate Authority, the CIT (Appeals) III, Jaipur, has erred in law by holding that As per section 50C(2) if the assessee had challenged the stamp value made by registration of authorities or disputed the said valuation before the competent authorities court or High court, then the AO may refer valuation of capital asset to a valuation officers (Para 4.3 page 6 of the appellate order dated 23.09.2016). 2. The learned Appellate Authority has erred in law and in fact in observing in the impugned Appellate order that As observed in this case, no such objection was raised before AO nor contested before competent authorities (para 4.3 page 6 of order) as well as in failing to consider the fact that the appellant had clearly disputed the valuation endorsed by the stamp valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w were not justified in adopting the said value when the assessee has made a claim before the AO that the value adopted by the Stamp Valuation Authorities is not correct. He submitted that as per section 50C(2) of the Act, the AO ought to have referred the issue to the Departmental Valuation Officer (DVO). The ld. Counsel reiterated the submissions as made in the written brief. The submissions of the assessee are as under :- 3. SUBMISSIONS 3.1. Section 50C(2) provides the situation under which AO is required to refer the matter to Valuation Officer. The said sub-section provides following two conditions: a. the assessee claims before any Assessing Officer that the value adopted or assessed 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 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. Neither any specific manner nor any particular Form in Income Tax Rules is prescribed for requesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta High Court in the case of Sunil Kumar Agarwal (Supra) and held that even though the assessee simply disputed the valuation adopted by the Stamp Valuation Authority but had not made any specific request to refer the matter to the Valuation Officer, the Assessing Officer should have referred the matter to the Valuation Officer. 3.4.iii. In the case of Vijay Kumar Patni, ITA No. 202/JP/2012 [CLC 29-42], Hon ble Bench relying on the case of Sunil Kumar Agarwal (supra) held as under: As per Section 50C, the Id Assessing Officer is duty bound to take value as taken by the Stamp Authorities. As per law the assessee can challenge the valuation made by the stamp authority by filing the appeal against the stamp duty paid before the appellate authority under the Registration of Stamp Act and another alternative is that he can object the valuation proposed by the Assessing Of on the basis of Section 50C of the Act and on that basis the Assessing Officer can refer the issue to the DVO and get valuation as per law. The Hon ble Calcutta High Court in the case of Kumar Agarwal (supra) cited by the assessee are squarely applicable. Therefore, the ld Assessing Officer is directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, the lower authorities have erred in adopting the Stamp Duty Valuation without referring the matter to Valuation Officer, therefore, the same deserves to be quashed and capital gains be directed to be completed w.r.t. actual sale consideration of ₹ 80,40,000 instead of ₹ 1,19,71,700. GROUND NO. 3: INVOKING THE PROVISIONS OF SECTION 50C: 1. ASSESSING OFFICER Ld. AO, on observing that the value adopted by the Stamp Valuation Authority is more than the sales consideration, invoked the provisions of section 50C and computed the capital gains at ₹ 48,84,149. 2. COMMISSIONER OF INCOME TAX (APPEALS) Ld. CIT(A) upheld the action of ld. AO. 3. SUBMISSIONS 3.1. Section 50C is a deeming provision which should be strictly construed. Nothing more should be read than what is specifically provided in the section. It is submitted that the provisions of section 50C require substitution of sales consideration with Stamp Duty Valuation subject to the conditions laid therein, for the purposes of Section 48 only. It has not been referred to in the other tax saving sections like section 54, 54EC and 54F. Therefore, these tax saving provisions w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be governed by meaning of words full value of consideration as mentioned in section 50C. The value adopted for stamp duty is to be considered as full value of consideration for the purpose of computing the capital gains under section 48. Section 54F(1) says that capital gain is to be dealt with in accordance with the provisions of sub-sections (a) and (b) of section 54F(1). Hence, deeming provisions as mentioned in section 50C will not be applicable to section 54F so far as the meaning of full value of consideration is concerned. [CLC 25] 3.5. Hon ble ITAT Jaipur Bench, recently in the case of Sh. Nand Lal Sharma, ITA No. 413/JP/2012 following the decision in the case of Shri Gyan Chand Batra (Supra) held that .We find merit in the arguments of the ld. AR that Section 50C is deeming fiction by which stamp duty value of the asset sold is to be substituted for actual consideration. This being purely a fiction, its scope is limited to Section 50C only and cannot be enlarged without a specific reference. In the absence of any enabling statutorily provision, a fiction cannot be imported in other section. This view has been squarely adopted by Hon'ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention. In view of the above, the plot in question is residential only and, accordingly, the Stamp Duty Valuation has no relevance. 3.2. On the contrary, the ld. D/R vehemently opposed the submissions and supported the orders of the authorities below. 3.3. We have heard the rival contentions, perused the material on record and gone through the orders of the authorities below. The ld. CIT (A) in para 4.3 of her order has decided the issue as under :- 4.3. I have carefully considered the facts of the case, findings of the AO and submission of the appellant. Ground 1 2 are interrelated and therefore taken up together. The facts are that the appellant sold a piece of land situated at New Light Colony, Jaipur for ₹ 80,40,000/- which was valued by Sub-Registrar as on date of registration at ₹ 1,19,71,700/- in terms of endorsement u/s 54 made in registered sale deed. Accordingly AO adopted the same as sale consideration for computation of Long Term Capital Gain u/s 50C. Before me, the assessee contended that the said plot was situated in residential area and is a residential plot and Sub Registrar has wrongly valued the same at ₹ 1,19,71,700/- wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erly instructed in law, the assessing officer, 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. In the present case, the assessee has pointed out that vide letter dated 18th March, 2016 disputed the valuation of the property. He drew our attention to paper book pages 28-29 where the letter dated 18th March, 2016 is enclosed. For the sake of clarity, section 50C is reproduced herein below : 50C. Special provision for full value of consideration in certain cases. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed (or assessable) by any authority of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed (or assessable) shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer: [Provided that where the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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