CIT,-1 V. M/S ORIENTAL TEXTILES PROCESSING CO. LTD. LUDHIANA

ITA/433/2009

AI Insights

The case involves an appeal by the Commissioner of Income Tax-I, Ludhiana against M/s Oriental Textiles Processing (P) Ltd., Ludhiana, concerning the applicability of Section 50C of the Income-tax Act, 1961 for the Assessment Year 2005-06. The core issue was whether the consideration declared in the sale deed by the assessee, which was accepted by the Stamp Valuation Authority, was lower than the value assessed by them, which would trigger the provisions of Section 50C(1). The Tribunal found that the declared consideration was not lower than the assessed value, and thus Section 50C(1) could not be invoked. The High Court agreed with the Tribunal's decision, emphasizing that the opinion of the Stamp Valuation Authority should prevail.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 720650 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 08-04-2010
• Assessment Year: misc
• Other Referred Cases: K.P. Verghese v. I.T.O., 131 I.T.R. 597 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: VIVEK SETHI
• Keywords: Assessment Year 2005-06; Immovable Property; Income Tax; Market value; Stamp Valuation Authority
• Section: 48; 50C(1); 50C(2); 50C(3); 260-A

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 433 of 2009 (O&M) Date of Decision: April 8, 2010 Commissioner of Income Tax-I, Ludhiana ..Appellant Versus M/s Oriental Textiles Processing (P) Ltd., Ludhiana ...Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Vivek Sethi, Advocate, for the appellant-revenue. 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. The instant appeal filed under Section 260-A of the Income-tax Act, 1961 (for brevity, ‘the Act’), is directed by the revenue, challenging order dated 31.12.2008, passed by the Income Tax Appellate Tribunal, Chandigarh Bench ‘A’, Chandigarh (for brevity, ‘the Tribunal’), in I.T.A. No. 758/Chandi/2008, in respect of the Assessment Year 2005-06. The Tribunal has reached the conclusion that one of the requirements for invoking Section 50C(1) of the Act is that the consideration declared by the assessee with regard to purchase of immovable property should be lower than the value adopted and I.T.A. No. 433 of 2009 (O&M) assessed by the Stamp Valuation Authority. On facts it was found that the consideration amount declared by the assessee in the sale deed has been duly accepted by the Stamp Valuation Authority and was not lower than the value assessed by the Stamp Valuation Authority, therefore, Section 50C(1) of the Act could not have been invoked. The power of the Assessing Officer to refer the matter for valuation under Section 50C(2) has then been examined. The Tribunal has reached the conclusion that sub-section (2) of Section 50C of the Act comes into play only in a situation where the assessee claims before the Assessing Officer that the value adopted by the Stamp Valuation Authority exceeds the fair market value of the property on the date of transfer. The claim of the assessee is that the consideration stated in the transfer deed is the market value, which stands accepted by the Stamp Valuation Authority. It has further been held that in accordance with sub-section (3) of Section 50C of the Act, if the value ascertained under sub-section (2) by the Valuation Officer exceeds the value adopted by the Stampt Valuation Authority then the value so adopted or assessed must be taken as the full value of the consideration for the purposes of Section 48 of the Act. In nutshell, the conclusion reached by the Tribunal is that it is the opinion of the Stamp Valuation Authority which is to prevail even when the value estimated by the Valuation Officer is higher. On facts it has been found that the value assessed by the Stamp Valuation Authority is the same as the one disclosed by the assessee in the sale deed. Having heard learned counsel for the appellant-revenue 2 I.T.A. No. 433 of 2009 (O&M) we are of the considered opinion that the conclusions recorded by the Tribunal is un-exceptionable and it does not suffer from any legal infirmity warranting admission of the appeal. In any case, Hon’ble the Supreme Court in the case of K.P. Verghese v. I.T.O., 131 I.T.R. 597 (SC), has held that in order to justify the impugned condition there has to be some evidence to show that the amount actually received was more than the amount shown in the transfer deed which was presented for registration. There has been no evidence produced on record to that effect. There is no question of law much less a substantive question of law, which may require determination by this Court. The appeal is wholly without merit. Dismissed. (M.M. KUMAR) JUDGE (JITENDRA CHAUHAN) April 8, 2010 JUDGE Pkapoor 3 "