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TMI Blog2013 (12) TMI 1747X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual consideration of Rs. 2,11,68,000 received by the appellant. 2. Briefly stated the relevant facts are like this. The assessee firm had sold a site along with building on 14.11.2005 for a consideration of Rs. 2,11,68,000. Originally, the assessment was completed under section 143(3) of the Act, wherein, while calculating the capital gains, the AO had not applied provisions of section 50C. However, the CIT set aside the order of the AO vide his order under section 263 and directed the AO to do de novo assessment on the ground that the assessee has received more consideration as per the valuation made by the Stamp Valuation Authority for stamp duty than what is stated in the sale deed. During the de novo assessment proceedings, the AO noticed that as per the sale deed the assessee had sold a property bearing Door No. 19-1-106, Vallabhai Street, Kakinada on 14.11.2005 for a consideration of Rs. 2,11,68,000/-. Whereas the registering authority, i.e., Joint Sub-Registrar Kakinada adopted the value of the property at Rs. 3,27,66,000 for the purpose of stamp duty. Since, the valuation made by the stamp valuation authority for stamp duty purpose was more than the consideration mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation into new facts. Since, it can be decided on the basis of facts on record, we admit the additional ground and proceed to decide the same. 5. Ld. A.R. opening his arguments on the additional ground submitted that the provisions contained in section 50C(1) of the Act is a deeming fiction. Ld. A.R. submitted that admittedly, in the case of the assessee, the objection was raised with regard to valuation of stamp valuation authority in terms of sub-section (2) of the Act and the matter was referred to the DVO by the AO. The DVO determined the market value of the property at Rs. 2,67,59,000/- which is less than the value adopted by the stamp valuation authority at Rs. 3,27,66,000/-. Ld. A.R. therefore, submitted that since subsection (3) of Section 50C of the Act only provides for adoption of value of the stamp valuation authority in a case where the market value determined by the DVO exceeds the value adopted by the stamp valuation authority, in such a situation, the AO cannot adopt the market value determined by the DVO as it is less than the value adopted by the Stamp Valuation authority. ld. A.R. submitted that since sub-section (3) of Section 50C does not provide for adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the value determined by the DVO exceeds the value adopted by the SVA, therefore, the AO could not have considered the market value determined by the DVO and should have accepted the value shown by the assessee in the sale deed. Before going into the merits of such contention of the assessee, let us examine the provisions contained in section 50C of the Act, which was introduced to the statute w.e.f. 1.4.2003 by the Finance Act, 2002. Section 50C: (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 by any authority of a State Government (hereinafter 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 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. 8. A plain reading of the aforesaid provision makes it clear that as per sub section (1) of section 50C, in a case, where the consideration received as a result of transfer by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y purposes, the AO may take such fair market value to be the full value of consideration. However, if the fair market value determined by the Valuation Officer is more than the value adopted or assessed for stamp duty purpose, the AO shall not adopt such fair market value and shall take the full value of consideration to be the value adopted or assessed for stamp duty purposes (emphasis bys us) 37.4. This amendment will take effect from 1st April, 2003 and will accordingly, apply in relation to the assessment year 2003-04 and subsequent years. 9. A plain reading of the aforesaid circular, more specifically para 37.3 makes it abundantly clear that if the fair market value determined is less than the value adopted for the stamp duty purpose, the AO may take such fair value to be full value of consideration. Therefore, the provisions contained in section 50C(3) r.w. explanatory notes of the Board vide Circular No. 8/2002 (supra) would be sufficient to indicate that where in a case the fair market value determined by the DVO, on a reference made by the AO in sub-section (2) of the said section is less than the value adopted or assessed by the SVA then such fair market value determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s section the provisions of the Wealth-tax Act are applicable. This Hon'ble Court observed that (page 308): A reading of the sub-section shows that the Wealth-tax Officer has no option but to proceed to complete the assessment in conformity with the assessment of the Valuation Officer in so far as the valuation of the asset in question is concerned. This is also the view taken by a Division Bench of this court in MC. Khunnah v. Union of India [1979] 118 ITR 414 (All.). In view of the above discussions and by considering the totality of the facts and circumstances of the case, it is crystal clear that generally, when Assessing Officer has obtained the D.V.O. report then the same is binding. Therefore, we find no reason to interfere with the impugned order passed by the Tribunal, it is hereby upheld with the reasons mentioned therein. 10. The Hon'ble Karnataka High Court in the case of Gouli Mahadevappa (supra), also expressed similar view by observing as under: Section 50C(1) is a deeming provision wherein the registration value fixed by the State Government under the Stamp Act is deemed to be considered as the full value consideration. Section 500(2), however, permits the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1987 In the aforesaid view of the matter, we do not find any reason to interfere with the order passed by the CIT(A) and, accordingly, the additional ground raised by the assessee is dismissed. 12. So far as grounds relating to chargeability of interest under section 234B of the Act are concerned, we have heard the parties on this issue. Ld. A.R. relied upon the decision of Hon'ble Bombay High Court in the case of Prime Securities Ltd. v. Asstt. CIT (Investigation) [2011] 333 ITR 464 : [2012] 20 taxmann.com 757 (Bom.) and contended that since the assessee could not foresee what income is going to be assessed on the date he paid the advance tax, interest should not have been charged under section 234B of the Act. ld. D.R. on the other hand relying on the decision of Hon'ble Karnataka High Court in the case of Gouli Mahadevappa (supra) submitted that as held by the Karnataka High Court, interest under section 234B is mandatory, which the assessee cannot avoid. After considering the submissions of the parties in the light of the ratio laid down in the decisions relied upon, we are of the view that no relief can be granted to the assessee in this regard. As can be seen from ..... 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