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TMI Blog2022 (1) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... g if the value adopted by the assessee is less than the value adopted by the stamp valuation authority difference should be added as income of the assessee u/s. 50C - There is no provision in the act permitting the AO to deviate from that. Hence, the AO not invoking the provision of section 50C, certainly makes the order of AO being erroneous. Hence, invocation of the provision of section 263 of the Ld.CIT is quiet correct - we note that section 50C duly provides that ,if the assessee is not satisfied with the valuation done by Stamp valuation authority, he can object to the same to the AO and in that case AO shall refer this matter to the DVO. This aspect was mentioned by the assessee before the Ld.CIT. CIT has referred to amendment brought in Explanation 2 of section 263. However, we note that it was inserted w.e.f. 01.06.2015 and it has been held by courts that amendment is prospective. However, this is not germane in the context of fact that AO has not invoked the provision of section 50C and has passed an erroneous order prejudicial to the interest of the revenue. We find that no prejudice would be caused to the assessee by the order of the Ld.CIT, wherein, he has direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the market value of this flat on which stamp duty has been Paid is ₹ 47,74,000/-. Therefore, as per provisions of section 50C(1) of the IT Act this amount of ₹ 47,74,000/- was required to be taken as the full value of the consideration received as a result of such transfer. Therefore, the Short Term Capital Gain should have been calculated by the assessee at ₹ 47,74,000/- (-) cost of acquisition in FY 2007-08 i.e ₹ 30.59.140/- = ₹ 17.24.860/- instead of the Short Term Capital Gain of ₹ 5,40,860/- shown by the assessee in the return of income. 3. During the course of assessment proceedings, the AO never examined this issue of application of section 50C nor any query was raised with reference to the same. The AO simply accepted the net taxable income declared by the assessee in its return in response to notice u/s 148 and also accepted calculation of Short Term Capital Gains at ₹ 5,40,860/-. The AO should have assessed the Short Term Capital Gains at ₹ 17,14,860/- instead of ₹ 5,40,860/- as declared by the assessee. Therefore, the assessment order of the AO was not as per provisions of section 50C of the IT Act. 4. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of flat on 22.06.2009 has been calculated by reducing the purchase cost of ₹ 30,59,140/- from sale consideration of ₹ 36 Lakhs. However, as per information available on record, the market value of this flat on which stamp duty has been paid is ₹ 47,74,000/-. Therefore, as per provisions of section 50C(1) of the I.T.Act, the amount of ₹ 47,74,000/- was required to be taken as the full value of consideration received as a result of such transfer. Therefore, Short Term Capital Gain should have been calculated at ₹ 17,14,860/- instead of ₹ 5,40,860/- as declared by the assessee. Therefore the assessment order of the AO was not as per provisions of section 50C of the I.T.Act. 6. Thereafter, Ld.CIT observed that failure to make proper enquiries to arrive at the correct and complete facts and to apply the correct law makes assessment order erroneous and prejudicial to the interest of the revenue. In this regard, Ld.CIT referred to several case laws. He also referred to the newly inserted Explanation 2 of section 263 w.e.f 01.06.2015, for the proposition that the order shall be deemed to be erroneous insofar as prejudicial to the interest of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147. 2) In view of this, the Proceedings u/s. 148 are void so far as it relates to issue of Provisions under section 50C. 3) Alternatively, Assessee further requests your honor to refer the valuation of Sale Consideration of flat under dispute to departmental valuer. This flat Was under distress sale property market was under recession. Moreover, occupation Certificate (O.C.) was not given to the Society at the time of Sale of Property. Therefore, this property could not fetch proper value. The occupation certificate was issued on 11 July 2011 the copy of which is enclosed. If O.C. is not given by Municipal Corporation, the value of property is reduced as per trend of property market in Mumbai. In view of all above grounds, we request you to drop the proceedings under section 263 of the Act. 10. Per contra, Ld. DR relied upon the orders of the Ld.CIT. Upon careful consideration, we note that the first objection of the assessee that notice u/s. 263 is beyond time is not sustainable in view of the fact that due to COVID, pandemic time barring dates were extended. This has been duly dealt with by the Ld.CIT in his order. Ld. Counsel of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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