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Sudha Garg R-16/369, Vasundara Ghaziabad vs ITO Ward-2(3) Ghaziabad
August, 16th 2018

Subject :- Sudha Garg R-16/369, Vasundara Ghaziabad vs ITO Ward-2(3) Ghaziabad

Referred Sections:
Section 50 C of Income Tax act
Section 16A (4) of the Wealth Tax Act
Section 50C of the Act.
section 48,

                  IN THE INCOME TAX APPELLATE TRIBUNAL
                      DELHI BENCH: `SMC + C' NEW DELHI

             BEFORE SH. BHAVNESH  SAINI, JUDICIAL MEMBER
                                 AND
             SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER

                    ITA No. 141/DEL/2018 (A.Y 2009-10)

           Sudha Garg               Vs                ITO
       R-16/369, Vasundara                          Ward-2(3)
            Ghaziabad                              Ghaziabad
          BEFPG7247H                             (RESPONDENT)
          (APPELLANT)

               Appellant by      Sh. Amresh Vashisht, CA &
                                 Ms. Sunaina Sharma, Adv
               Respondent by     Sh. Vijay Kumar Tiwari, Sr.
                                 DR

                Date of Hearing                09.08.2018
                Date of Pronouncement           14.08.2018

                                  ORDER

PER Prashant M Maharishi A. M.

1.        This appeal is filed by the assessee against the order of the Ld.
          Commissioner of Income Tax (Appeals)- Ghaziabad for Assessment
          Year 2009-10 raising following grounds of appeal as under:-

               1."Because the learned Commissioner of Income Tax (Appeals)
               erred in law as well as on facts not to acknowledge the report
               of Assistant Valuation Officer Meerut at Rs. 2178000/-
               against assessee sale price of Rs 2000000/- but valued at
               Circle rate of Rs.3485000/- adding Rs. 14,82,000/-under
               Section 50 C of Income Tax act , 1961 read with Section 16A
               (4) of the Wealth Tax Act 1961 before him as evidence and
                                 Page 1 of 9
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                                                                  A Y 2009-10
                                                             Sudha Garg V ITO

           passed the order in arbitrary manner.




        2. Because the learned CIT (Appeals) has erred in overlooking
           and in summarily rejecting the detailed statement of facts
           submitted along with memorandum of Appeal, Documents,
           and evidences while accepting the factually incorrect version
           of the learned assessing officer.




        3. That the valuation as given by the Assistant Valuation Officer
           be accepted as sale price in the interest of Justice or the
           matter be referred back to assessing officer for fresh
           assessment considering report of Assistant Valuation Officer.




           4.     The assessee craves leave to add/alter any of grounds
           of Appeal before or at the time of hearing."



2.   The assessee is aggrieved that the Ld. Assessing Officer           has
     computed the capital gains by applying the provisions of Section
     50C of the Act.
3.   The brief facts of the case are that the assessee is an individual.
     On the basis of the AIR information, the Ld. Assessing Officer
     noted that she has sold a property for sale consideration of
     Rs.36,83,000/-. Therefore, notice u/s 148 of the Act was issued.
     Consequently, it was found that the assessee and her son have
     jointly sold a residential plot at Vasundhra, Ghaziabad for a sale of
     consideration of Rs. 20 lakhs for which the stamp duty value is






                             Page 2 of 9
                                                                 ITA No 141 Del 2018
                                                                         A Y 2009-10
                                                                    Sudha Garg V ITO

     Rs.34.85 lacs as per the registered sale deed dated 13/5/2008.
     Therefore, the Ld. Assessing Officer           computed the long term
     capital   gain   of   Rs.     15,96,410/-    taking   the     deemed      sale
     consideration u/s 50C of Rs. 34,85,000/-. Before the ld AO
     assessee submitted the report of Registered Valuer Shri R N bansal
     who valued the property at Rs. 19.52 lakhs. Ld AO was not
     satisfied with the report of RV. Therefore,            Prior to passing
     assessment order on 26/12/2106 u/ 143 (3) rws 148 of the Act,
     the Ld. Assessing Officer        on 28/10/2016 referred to the District
     Valuation Officer for determining the market value of the above
     property. The Ld. Assistant Valuation Officer (Meerut) determined
     the fair market value of the property vide letter dated 7/3/2017 at
     Rs.21.78 lacs. As the assessment was getting time barred the ld
     AO passed assessment order without             waiting for the report of
     DVO taking the circle rate for stamp duty purposes as deemed
     sales consideration.
4.   Meanwhile, the assessee-preferred appeal against the order of the
     Ld. Assessing Officer       before the Ld. CIT (A) and during the course
     of the hearing, the assessee submitted that the difference in the
     market value is because of the condition of the property. The Ld.
     CIT (A) did not accept the argument of the assessee and confirmed
     the addition. Before the Ld. CIT(A), the assessee submitted that
     the Departmental Valuer has valued the property vide letter dated
     7/3/2017 at Rs 21.78 lakhs Only, therefore only that can be taken
     as deemed sales consideration             for working out capital gain.
     However, the Ld. CIT (A) rejected           it, as according to him, the
     appellant has not claimed before the A.O that the value adopted by
     the Stamp Valuation Authority has exceeded the fair market value
     property. Therefore, he rejected the appeal of the assessee.


                                 Page 3 of 9
                                                          ITA No 141 Del 2018
                                                                  A Y 2009-10
                                                             Sudha Garg V ITO

5.   The Ld. Authorized Representative reiterated the same arguments
     and facts before us. It was the claim of the assessee that Ld.
     assessing officer has only referred the matter to the departmental
     valuer only when the assessee has objected before the Ld.
     assessing officer that the Stamp duty valuation is higher side by
     submitting the report of the registered valuer who valued the
     property at Rs. 21.78 Lacs, he submitted that assessee has made
     proper claim before the assessing officer. He submitted that there
     is no proper manner provided under the law for making a claim
     before the assessing officer it may be in the return of income or by
     various communications addressed to the Ld. assessing officer. He
     submitted that when the assessee has disputed the applicability of
     the stamp duty value is the deemed consideration for working out
     the capital gain of the property by submitting the report of the
     registered valuer it is a proper claim made by the assessee before
     AO. He therefore submitted that to that extent the order of the Ld.
     CIT ­ A is erroneous holding that assessee has not made any claim
     before the Ld. assessing officer. With respect to the difference in
     valuation adopted by the district valuation officer of Rs. 21.78 Lacs
     and the actual sale consideration of Rs. 20 lakhs is submitted that
     the differences very small and therefore same should be ignored.
6.   The Ld. departmental representative also supported the orders of
     the lower authorities.
7.   We have carefully considered the rival contention and the orders of
     the lower authorities. Admittedly, the assessee has sold a property
     at Rs. 20 lakhs whose circle rate for stamp duty purposes was Rs.
     34.85 Lacs. Before the assessing officer, the government-approved
     valuer's report was submitted by the assessee of Shri Dr. S.N.
     Bansal who valued the property at Rs. 19.52 lakhs. The Ld.
     assessing officer was not satisfied with the report of the registered

                              Page 4 of 9
                                                      ITA No 141 Del 2018
                                                              A Y 2009-10
                                                         Sudha Garg V ITO

valuer and therefore he called for the report of the district
valuation officer. However, the valuation as per the report of the
Asst valuation officer was Rs. 21.78 Lacs. Before the assessing
officer the report of the assistant valuation officer was not available
as the assessment order was passed on 26/12/2016 where as the
valuation report by AVO was received on 7/3/2017. However it
was available before the Ld. CIT ­ A but he rejected it for the
reason that it is for the assessee to claim before the Ld. assessing
officer that the value adopted by the Stamp valuation authority
exceeds the fair market value of the property as on the date of the
transfer and the value has not been disputed in any appeal or
revision before any other authority or the court. According to him
such claim was not made by the assessee before the AO. According
to the provisions of section 50 C of the income tax act, where the
consideration received or accruing as a result of the transfer by an
assessee of the capital asset being land or building or both is less
than the value adopted or assessed or assessable by any authority
of the state government for the purpose of payment of stamp duty
in respect of such transfer, the value so adopted or assessed shall
for the purpose of section 48, be deemed to be the full value of the
consideration received or accruing as a result of such transfer.
However if the assessee claims before the assessing officer that the
value adopted or assessed by the Stamp valuation authority
exceeds the fair market value of the property as on the date of the
transfer then the Ld. assessing officer may refer the valuation of
the capital asset to the valuation officer. Further where            the
valuation ascertained by the district valuation officer exceeds the
value adopted or assessed by the stamp valuation authority then
the valuation of the stamp duty authorities shall be considered as
a deemed sale consideration. Further when the stamp duty value

                        Page 5 of 9
                                                    ITA No 141 Del 2018
                                                            A Y 2009-10
                                                       Sudha Garg V ITO

adopted by the Stamp duty authorities is more than the fair
market value determined by the Department of valuation officer,
than such valuation made by the departmental valuation officer is
taken as the full value of consideration. The only dispute remains
here is whether the assessee has objected the adoption of the
Stamp duty value before the Ld. assessing officer or not. Before us
the assessee has submitted that assessee has submitted the report
of the government-approved valuer who valued the property at Rs.
19.65 Lacs. Further, as the Ld. assessing officer was not satisfied
with the valuation report of the government-approved valuer, he
referred the matter or valuation to the district valuation officer.
There is no specific manner provided by the act for making a claim
before the Ld. assessing officer under section 50 C of the income
tax act. Such claim can also be made in the return of income as
well as in various communications before the assessing officer. As
the assessee has submitted the report of the registered government
approved valuer, Therefore, it cannot be said that the assessee has
not claimed before the Ld. assessing officer that valuation adopted
by the Stamp duty authorities is not the correct valuation of the
property sold. Otherwise there would have been no occasion for the
ld. assessing officer to refer the matter to the district valuation
officer. the ld. departmental valuer submitted its valuation report
determining the fair market value of the property at Rs. 21.78 lacs.
Therefore according to us the assessee has made proper claim
before the assessing officer. Further the argument of the Ld.
authorized representative that where the difference between the
actual sale consideration of Rs. 20 lakhs and the valuation made
by the departmental valuation officer of Rs. 21.78 Lacs is nominal
and therefore it should be ignored as the report of the district
valuation officer is merely an opinion. We have carefully considered

                       Page 6 of 9
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                                                                          A Y 2009-10
                                                                     Sudha Garg V ITO

             this argument however; it deserves to be rejected, as there is no
             such provision in section 50 C of the income tax act with respect to
             the difference between the value determined by the district
             valuation officer and the actual sale consideration. The provisions
             of section 50 C are amended w.e.f. 1/4/2019 only for ignoring the
             stamp valuation authority valuation if it does not exceed 105% of
             the consideration received. However, that applies only when
             comparing the stamp duty valuation with the actual sale
             consideration of the property. In view of above facts we direct the
             Ld. assessing officer to work out the capital gain by considering the
             deemed sale consideration of the property at Rs. 21.78 Lacs and
             then work out the capital gain chargeable to income tax act.
             Accordingly, we reverse the orders of the lower authorities. In view
             of this ground No. 1 ­ 3 of the appeal of the assessee is allowed.
8.           In the result appeal of the assessee is allowed for statistical
             purposes.






              Order pronounced in the Open Court on 14.08.2018.

            -Sd/-                                        -Sd/-
      (BHAVNESH SAINI)                              (PRASHANT MAHARISHI)
     JUDICIAL MEMBER                                 ACCOUNTANT MEMBER


Dated: 14/08/2018

Copy forwarded to:

1.    Appellant
2.    Respondent
3.    CIT
4.    CIT(Appeals)
5.    DR: ITAT
                                                   ASSISTANT REGISTRAR
                                                      ITAT NEW DELHI



                                     Page 7 of 9
                                                         ITA No 141 Del 2018
                                                                 A Y 2009-10
                                                            Sudha Garg V ITO




Date of dictation                                    09.08.2018

Date on which the typed draft is placed before the   10.08.2018
dictating Member

Date on which the typed draft is placed before the
Other Member

Date on which the approved draft comes to the Sr.
PS/PS

Date on which the fair order is placed before the
Dictating Member for pronouncement

Date on which the fair order comes back to the Sr.    .08.2018
PS/PS

Date on which the final order is uploaded on the      .08.2018
website of ITAT

Date on which the file goes to the Bench Clerk        .08.2018

Date on which the file goes to the Head Clerk

The date on which the file goes to the Assistant
Registrar for signature on the order

Date of dispatch of the Order




                       Page 8 of 9

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