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
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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
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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.
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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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