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Mrs. Kusum Chandidas Gupta, (Legal heir of Late Dr. Chandidas Gupta), 23, Green Park, 11 St. Paul Road, Bandra, Mumbai -400 050 Vs. Income Tax Officer 11(2)(2), Aayakar Bhavan, New Marine Lines, Mumbai -400 020
August, 20th 2015
                                     1
                                                                Mrs. Kusum Chandidas Gupta,
                                                     (Legal heir of Late Dr. Chandidas Gupta)
                                                                       ITA No. 818/Mum/2013

               ""    
           IN THE INCOME TAX APPELLATE TRIBUNAL
                 MUMBAI BENCH "C", MUMBAI
                      . .  ,    
                     ,      
    BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER
       AND SHRI AMIT SHUKLA, JUDICIAL MEMBER

                      ITA No. : 818/Mum/2013
                      (Assessment year: 2004-05)
Mrs. Kusum Chandidas Gupta,          Vs      Income Tax Officer 11(2)(2),
(Legal heir of Late Dr. Chandidas            Aayakar Bhavan,
Gupta),                                      New Marine Lines,
23, Green Park, 11 St. Paul Road,            Mumbai -400 020
Bandra, Mumbai -400 050
   .:PAN: AAFPG 3871 J
 (Appellant)                                        (Respondent)
                      Appellant by       :   Shri R. N. Vasaniajesh Shah
                     Respondent by       :   Shri Durga Dutt

          /Date of Hearing                        : 23-06-2015
          /Date of Pronouncement                  : 19-08-2015

                                     
                                     ORDER

        , . .:
      PER AMIT SHUKLA, AM:

             The aforesaid appeal has been filed by the assessee against
      impugned order dated 26.11.2012 passed by CIT(A)-III, Mumbai for
      quantum of assessment passed u/s 143(3) in pursuance of
      direction given by the Tribunal u/s 254 for the assessment year
      2004-05.

      2.     In the grounds of appeal, the assessee has challenged the
      taxing of capital gain by invoking the provisions of section 50C on
      the sales of property.

      3.     Brief background of the case is that original assessment was
      made u/s 143(3) on 22.11.2006, wherein the long-term-capital-
      gains on sale of property was determined at Rs. 5,99,000/- by
      adopting fair market value as per stamp valuation u/s 50C at
                           2
                                                  Mrs. Kusum Chandidas Gupta,
                                       (Legal heir of Late Dr. Chandidas Gupta)
                                                         ITA No. 818/Mum/2013
Rs. 20,06,500/- as against the sale amount mentioned in the sale
deed at Rs. 13 lakhs. In the first appeal, the Ld CIT(A) has upheld
the finding of the Assessing Officer. However, the Tribunal set
aside the matter to the file of the Assessing Officer to refer the
matter to the Departmental Valuation Officer (DVO) in terms of
section 50C(2)(a) and compute the capital gains in accordance with
the law. The relevant observation and the direction of the Tribunal
reads as under:-
5. The assessee is in further appeal before the Tribunal. We have heard the rival contentions and also gone through the relevant statutory provisions. Under sub-section (1) of Section 50C, if the sale consideration for the property is less than the value adopted by the stamp duty authorities, the capital gains can be computed by the Assessing Officer by taking the value adopted by the stamp duty authorities as the full valuation of the consideration. However, under clause (a) of sub-section (2), if the assessee claims that the valuation for stamp duty purposes exceeds the fair market value of the property, then the Assessing Officer may refer the valuation of the property to the departmental valuation officer. In the case before us the Assessing Officer himself has accepted in the assessment order that a claim had been made by the assessee under the aforesaid provisions on the basis of the approved valuer's report, according to which the fair market value of the property was Rs.11,28,000/- which is less than the stamp duty value of Rs.20,06,500/-. He has not disputed the assessee's claim that the aforesaid provision is applicable and that a reference has to be made to the departmental valuation officer. All that he has stated in the assessment order is that there is no time left to carry out the exercise of referring the valuation to the departmental valuation officer as the assessment was getting barred by time on 31.12.2006. We are unable to uphold the stand taken by the Assessing Officer. The assessment order 3 Mrs. Kusum Chandidas Gupta, (Legal heir of Late Dr. Chandidas Gupta) ITA No. 818/Mum/2013 itself was passed on 22.11.2006 and five weeks time was available to the Assessing Officer to complete the assessment which was getting barred by time only on 31.12.2006. The assessee had made the claim by letter dated 6.11.2006 which was in response to the query raised by the Assessing Officer on 26.10.2006. It cannot therefore be stated that the delay was entirely on the part of the assessee. Under the circumstances, we are of the view that the orders of the departmental authorities on this point have to be set aside. We do so and direct the Assessing Officer to process the assessee's claim made under section 50C(2)(a) and refer the matter to the departmental valuation officer as contemplated by the statutory provisions and compute the capital gains in accordance with law. Needless to add that the assessee should be given due opportunity. The appeal is accordingly allowed in the above terms, for statistical purposes". 4. In pursuance thereof, the matter was referred to the District Valuation Officer by the Assessing Officer in term of Section 50C(2), to value the property in question as on the date of sale i.e. 06.03.2004. In the reference, the Asst. Valuation Officer, Lucknow vide his report dated 16.11.2011 valued the fair market value of the property at Rs. 23,27,000/-, which was higher than the stamp value. The said report was forwarded to the assessee as to why the FMV valued by the AVO should not be taken as sale consideration. In response, the assessee submitted that the assessee had only received the amount of consideration at Rs. 13 lakhs and the valuation done by the DVO cannot be accepted as the same was done on November, 2011 whereas, the property was already sold in March, 2004. At the time of inspection, the structure / property was already sold on 11th March, 2004 and was not in existence on the date of valuation. Nothing has been brought on record that assessee has received more than 13 lakhs. Reliance was placed on the decision of P&H High Court in the case of CIT vs Chandni 4 Mrs. Kusum Chandidas Gupta, (Legal heir of Late Dr. Chandidas Gupta) ITA No. 818/Mum/2013 Bhuchar, reported in 323 ITR 0520. However, the Assessing Officer held that the valuation has been done as per the direction of the Tribunal, which was made at the request of the assessee only and therefore, the value of Valuation Officer or as per the stamp duty valuation has to be adopted as the Assessing Officer is bound by the decision of the Tribunal. Now that the valuation by the DVO is more than valuation of the property by stamp valuation authority, therefore, the market value as per the stamp duty would be adopted. Thus he took FMV at Rs. 20,06,500/-. 5. The Ld. CIT(A), too confirmed the said addition on the ground that Assessing Officer has bound to follow the direction of the Tribunal. 6. Before us the Ld. Counsel, strongly relying upon the decision of P&H High Court in the case of CIT vs Chandni Bhuchar (supra), submitted that in absence of any positive evidence, stamp duty value cannot be adopted, if the assessee proves that sale consideration mentioned in the sale deed is actual. 7. On the other hand, Ld. DR strongly relied upon the order of the CTI(A). 8. We have considered the rival submissions and perused the relevant material on record. This is the second round of proceedings passed in pursuance of direction given by the Tribunal, wherein it was directed that the Assessing Officer will process the assessee's claim u/s 50C(2)(a) and referred the matter to the DVO for ascertaining the fair market value. In pursuance thereof, the assessing officer had made the reference to the DVO who has valued the property at a higher value at Rs. 23,27,000/- as against the stamp duty valuation of Rs. 20,06,500/-. Section 50C is a deeming provision where fair market value has to be deemed at the value adopted by the stamp valuation authority. However, such a deeming provision will not apply, if the assessee 5 Mrs. Kusum Chandidas Gupta, (Legal heir of Late Dr. Chandidas Gupta) ITA No. 818/Mum/2013 claims that the value adopted or assessed by the stamp valuation authority exceeds the fair market value of the property as on the date of transfer. In case of such a claim, Assessing Officer has to refer the matter to the Valuation Cell and in such cases, the Assessing Officer is bound by such a valuation. Here in this case, since value adopted by the DVO is more than the stamp valuation, therefore, the Assessing Officer had rightly adopted the FMV as per the stamp valuation authority. To wriggle out from such a situation here in this case, the assessee should have rebutted the entire DVO's report before the CIT(A) by evidence and proper material as to how and why the DVO's report cannot be relied upon and the assessee's sale value is actually the fair market value. Here such an exercise has not been done by the assessee. Accordingly, the order of the CIT(A) confirming the fair market value as per section 50C is affirmed. 9. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 19th August, 2015. Sd/- Sd/- (. . ) ( ) (B R BASKARAN) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 19th August, 2015 /Copy to:- 1) /The Appellant. 2) /The Respondent. 3) The CIT(A) -3, Mumbai. 4) The CIT­11, Mumbai. 5) "", , / The D.R. "C" Bench, Mumbai. 6 Mrs. Kusum Chandidas Gupta, (Legal heir of Late Dr. Chandidas Gupta) ITA No. 818/Mum/2013 6) Copy to Guard File. /By Order / / True Copy / / / , Dy./Asstt. Registrar I.T.A.T., Mumbai * .. *Chavan, Sr.PS
 
 
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