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TMI Blog2022 (6) TMI 1372X X X X Extracts X X X X X X X X Extracts X X X X ..... FMV of the property at Rs.1,25,30,606/- by considering the factors like type of property, transactions, & specific situation of the property etc. 3. The Hon'ble Madras High Court, in the case of M/s. Jagannathan Sail Chitta v. The Income Tax officer, T.C.A. No.142 of 2019, Dated 15.02.2019 dealing with similar question held that ' A bare reading of Scheme of Sec. 50C of the Act would show that Assessee can object to presumptive value as per Sec.50C (1) and, therefore, it is only after hearing the objections of the Assessee, the Fair Market Value of the Capital Asset as per Guidance Value' can be determined by the authorities. The Assessee cannot be denied an opportunity to raise his objections even against the presumptive Fair Market Value under Sec, 50C (1) of the Act or Report of DVO under Section 50C (2) of the Act and the Assessing Authority or the Appellate whose powers are coextensive with those of the Assessing Authority, cannot refuse to meet those objections point by point'. 4. The Hon'ble Delhi High Court, in the case of CIT v. Khoobsurat Resorts (P) Ltd., (2012) 28, taxmann.com 93 dealing with a similar question held that the provisions of Sec. 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Govt. notification; and the property has been sold in piecemeal and not as whole stock and barrel which considerable impacts its value negatively, and consequently the proposed addition of Rs.27,87,500/- which appears to be very discretionary and not factual. 2.2 The A.O. referred the matter of valuation of the impugned property to the valuer who determined the value of the property at Rs.2,34,63,205/- against the value declared by the assessee at Rs.1.55 crores. However, the A.O. considered the guideline value of Rs.2,66,50,000/- as sales consideration and out of this, assessee's share of 25% considered as consideration received by assessee at Rs.66,62,500/- to compute the capital gain. Thus, the Ld. A.O. in his order of assessment has made addition of Rs.49,62,526/ - with the following observation vide para 5 which reads thus; The assessee's submissions in this regard have been considered carefully. In this case the sale consideration as per registered sale deed is less than the guidance value therefore, the transaction attracts provisions of sec.50C of the IT Act. The provisions of Sec.50C reads as under: " ........ (1) Where the consideration received or accruing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed the value so adopted or assessed in any appeal or revision or reference before any authority, the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the Act. If the fair market value determined by the Valuation Officer is less than the value adopted for stamp duty purposes, the Assessing Officer has to take such fair market value to be the full value of consideration but if the fair market value so determined by the DVO is more than the value adopted or assessed by stamp duty Authorities for the purposes of collection of stamp duties, the Assessing Officer shall not adopt such fair market value but shall take full value of consideration to be the value adopted or assessed for the 'purposes of stamp duty. In our view, in the present case, the CIT(A) has referred the matter to the DVO for ascertaining the fair market value, who ascertained the fair market value at Rs.30,87,675/- as against the value adopted by Stamp Duty Authorities at Rs.1,33,22,222/-. In our view, in view of the provisions of sub-section (2) of section 50C, fail: market value as assessed by the DVO is lower than the value adopted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be the price that the capital asset would ordinarily fetch on sale in the open market on the relevant date and where such price is not ascertainable it should be determined in accordance with rules made under the Income-tax Act. It was pointed out that no rule in this regard has been made so far." b) In the case of Ravi Kant vs Income Tax Officer, the Delhi ITAT Bench has held that - "The sweeping generalizations inherent in the circle rates cannot hold good in all situations. It is, therefore, not uncommon that while fixing the circle rates, authorities do err on the side of excessive caution by adopting higher rates of the land in a particular area as the circle rate. In such circumstances, the DVO's blind reliance on circle rates is unjustified. When DVO's valuation is required to compare the same with the valuation by the stamp valuation authority, it is futile to base such a report on the circle report itself Such an approach will render exercise under Section 50C(2) a meaningless ritual and an empty formality." c) In the case of ACIT Cir-32 vs Bajaj Chemicals by the Kolkata ITAT held that :- "The stamp duo, authority generally estimates the value Wardwise. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO considered the guideline value adopted for registration as sale consideration to determine the capital gain. There is a substantial difference between the value adopted for registration and valuation made by different valuers. The argument of the Ld. D.R. is that the assessee has not furnished copy of registered valuer report to AO at the time of assessment and only at the time of first appellate proceedings, he has produced it. Hence, no credence has been given. In our opinion, an appropriate opportunity ought to have been given to the assessee to reconcile the value mentioned by DVO and registered valuer and also with regard to the method of valuation followed by the different valuers. It is also submitted by Ld. A.R. that DVO has considered the value of certain property, which was not in the impugned sale deed which has to be excluded while determining the FMV of the impugned property. We also direct the authorities to bring more comparable cases for deciding the issue. With this observation, we remit the entire issue to the file of AO for reconsideration in the light of above. 8. Further, the assessee raised one more ground in ground No.5 with regard to the sustaining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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