Sonia Gupta, Sunam V. ITO, Sunam

ITA 102/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5350 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D K GOEL; ABHISHEK KAPOOR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 143(3); 50C; 234B; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC, CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.102 /CHD/2011 (ASSESSMENT YEAR : 2007-08) SONIA GUPTA, VS. THE INCOME-TAX OFFICER, W/O SH.RAKESH KUMRA SUNAM. NEAR OLD M.C.OFFICE, PEERAN WALA GATE, SUNAM. PAN: AFBPG0681F (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI D.K.GOEL & ABHISHEK KAPOOR RESPONDENT BY: SMT.SARITA KUMARI, DR O R D E R THE APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 10.12.2010 RELATING TO ASS ESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED U/S 143(3) OF THE INCOME-T AX ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. BECAUSE THE ACTION FOR UPHOLDING THE ADDITION F OR AN AMOUNT OF RS.2,50,800/- IS BEING CHALLENGED ON FACTS AND LAW BY INVOKING THE PROVISIONS OF SECTION 50C DEEMING THE SALE CONSIDERATION AS AN INCOME INSPITE OF THE MARKET VALUE, TOTAL SALE CONSIDERATI ON UNDISPUTED AND ACCEPTED WHICH EVEN IN ACCORDANCE TO FACTS AND EVIDENCE IS BELOW THE STAMP DUTY DETERMINED BY SUB-REGISTRAR. 2. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW AND THE QUANTUM OF THE ADDITION TOO IS BEING DISPUTED. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DECLARED INCOME FROM SHORT TERM CAPITAL GAINS AT RS.1,87,739/-. THE ASSESSEE HAD PURCHASED ONE SHOP ON 15.5.2005 JOINTLY WITH TWO OTHER CO-OWNERS. THE TO TAL COST OF THE PROPERTY WAS 8,19,250/-. THE ASSESSEE HAD 66% SHA RE IN THE SAID PROPERTY AMOUNTING TO RS.5,40,000/-. THE SAID PLOT WAS SOLD ON 3.5.2006 VIDE TWO SEPARATE SALE DEEDS AMOUNTING TO RS.7 LACS AND RS.2,05,000/-. THE REVENUE AUTHORITIES CHARGED STAMP DUTY ON SALE CONSIDERATION OF RS.10,80,000/- AND RS.2,45,000/- RESPECTIVELY. THE TOTAL VALUE ADOPTED BY THE REVENUE AUTHORITIES FOR THE PURPOSE OF STAMP DUTY WAS RS.13,25,000/- AS AGAINST RS.9,05,000/- AS SHOWN BY THE ASSESSEE AND OTHER CO-OWNERS. THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE TO EXPLAIN WHY THE VALUE ADOPTED BY THE REVENUE AUTHOR ITIES BE NOT TAKEN AS FULL VALUE OF SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE INCOME OF SHORT TERM CAPITAL GAIN. IN REPLY THE ASSESSEE EXPLAINED THAT ON THE DATE OF PURCHASE THE STAMP DUTY VALUATION FIXED BY THE REVENUE AUTHORITIES WAS RS.13,25,000/- WHILE THE ASSESSEE A LONGWITH OTHER CO- OWNERS HAD PURCHASED THE SAME FOR RS.7 LACS. EVEN ON THE DATE OF SALE THE STAMP DUTY VALUATION FIXED BY THE REVENUE AUTHO RITIES WORKED OUT TO RS.13,25,000/-. THE CONTENTION OF THE ASSESSEE WAS THAT THE RATES FIXED BY THE STAMP VALUATION AUTHORITIES WERE HIGHLY EXCE SSIVE AND THE SAME HAD REMAINED CONSTANT STILL AFTER ONE YEAR. THE AS SESSEE FURTHER CLAIMED TO HAVE SOLD THE SHOP AT THE PREVAILING MARKET RATE AND A REQUEST WAS MADE THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE NOT APPLICABLE. THE ASSESSING OFFICER OBSERVED THAT IN VIEW OF THE PROVISIONS OF SECTION 50C OF THE ACT, WHERE THE STAMP DUTY HAD BEEN CHARG ED AT A HIGHER VALUE IN RESPECT OF ANY TRANSACTION OF PROPERTY, THEN SUC H HIGHER VALUE SHOULD BE DEEMED TO BE THE VALUE OF CONSIDERATION FOR THE PURPOSES OF SECTION 48 OF THE INCOME TAX ACT. ACCORDINGLY, APPLYING THE P ROVISIONS OF SECTION 3 50C OF THE ACT, THE SHORT TERM CAPITAL GAIN WAS COM PUTED AT RS.3,34,500/-, RESULTING IN AN ADDITION OF RS.2,50, 800/-. 4. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFF ICER IN APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. 5. THE LEARNED A.R. FOR THE ASSESSEE REFERRED TO TH E FACTUAL ASPECT OF THE ISSUE AND POINTED OUT THAT AN APPLICATION WAS M ADE TO THE ASSESSING OFFICER TO REFER THE ISSUE OF VALUATION TO THE VALU ATION OFFICER UNDER THE PROVISIONS OF SECTION 50C (2)(A) OF THE INCOME TAX ACT OR ACCEPT THE ALE RATE DECLARED BY THE ASSESSEE. RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT VS. SMT.SHWETA BHUCHAR, 192 TAXMAN 67 (P&H). 6. THE LEARNED D.R. FOR THE REVENUE PLACING RELIANC E ON THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) ALSO REFERRED TO T HE RATIO LAID DOWN IN MOHD.SHOIB VS. DCIT, 127 TTJ 459 (LUCKNOW). 7. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN CONNECTION WITH THE APPLICABILITY OF PROVISIONS OF SECTION 50C OF THE ACT. THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION HAD SOLD ONE SHOP IN JOINT CO-O WNERSHIP WITH TWO CO-OWNERS FOR THE TOTAL CONSIDERATION OF RS.9,05,00 0/-. THE REVENUE AUTHORITIES FOR THE PURPOSES OF STAMP DUTY HAD VALU ED THE SAID PROPERTY AT RS.13,25,000/-. THE ASSESSEE HAD PURCHASED THE SAID ASSET IN JOINT CO- OWNERSHIP ON 15.5.2005 FOR RS.7 LACS. THE STAMP VA LUATION AUTHORITIES AT THE RELEVANT TIME HAD VALUED THE SAID PROPERTY A T RS.13,25,000/-. THE FACTUAL ASPECTS OF THE PURCHASE AND SALE OF THE SAI D PROPERTY ARE NOT IN DISPUTE. THE ASSESSING OFFICER WHILE COMPLETING TH E ASSESSMENT HAD INVOKED THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT AND COMPUTED THE INCOME UNDER THE HEAD INCOME FROM SHO RT TERM CAPITAL 4 GAINS BY ADOPTING THE SALE VALUE AT RS.13,25,000/- , RESULTING IN AN ADDITION OF RS.2,50,800/-. 8. SECTION 50C INSERTED BY THE FINANCE ACT, 2002 W. E.F 1.4.2003 PROVIDES AS UNDER:- SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING A S A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION A UTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER; (B) THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFER ENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF T HE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND ( 6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 O F 1957), SHALL, WITH NECESSARY MODIFICA-TIONS, APPLY IN RELATION T O SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY TH E ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. [ EXPLANATION 1 ] .FOR THE PURPOSES OF THIS SECTION, VALUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. ] 5 (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER.] 9. THE PROVISIONS OF SECTION 50C OF THE ACT ARE INV OKED IN CASES WHERE THE SALE CONSIDERATION RECEIVED ON TRANSFER OF A CAPITA L ASSETS, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. UNDER THE PROVISIONS OF SECTION 50C( 1) OF THE ACT, IT IS PROVIDED THAT THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEM ED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER, UNDER SECTION 48 OF THE ACT. 10. SECTION 50C (2) OF THE ACT PROVIDES THAT WHERE THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE O F PROPERTY, AS ON THE DATE OF TRANSFER AND THE SAME HAS NOT BEEN DISPUTED BEFORE THE APPELLATE AUTHORITY UNDER THE STAMP DUTY ACT, THEN THE ASSESSING OFFICE R MAY REFER THE VALUATION OF THE SAID CAPITAL ASSET TO A VALUATION OFFICER AS A REFERENCE MADE THE PROVISIONS OF SECTION 16A OF THE WEALTH TAX ACT. 11. THE LUCKNOW BENCH OF THE TRIBUNAL IN MOHD. SHOI B VS. DCIT (SUPRA), HELD THAT .. IT IS CLEAR FROM THE EXPLANATORY NOTE S TO THE AMENDMENT INTRODUCED BY FINANCE ACT, 2002 THAT IN CASE ASSESS EE CLAIMS THAT VALUE ADOPTED BY SVA EXCEEDED THE FAIR MARKET VALUE OF TH E PROPERTY ON THE DATE OF TRANSFER AND HE HAS NOT DISPUTED THAT VALUE BEFORE APPELLATE AUTHORITIES UNDER STAMP DUTY ACT, THE ASSESSING OFFICER MAY REFER TH E VALUATION OF THE PROPERTY TO THE DVO. IN OTHER WORDS, THE EXPLANATORY NOTES CLARIFY THAT BOTH THE 6 CONDITIONS AS MENTIONED IN CL.(A) AND CL.(B) OF S.5 0C (2) SHOULD BE CUMULATIVELY SATISFIED. THUS, THE ARGUMENT OF THE A UTHORIZED REPRESENTATIVE BASED ON INTERPRETATION OF SEMI-COLON BETWEEN CL.(A ) AND CL.(B) THAT IF EITHER OF THE CONDITIONS AS MENTIONED IN CL. (A) AND CL. (B) ARE SATISFIED THEN ASSESSING OFFICER HAS TO REFER THE PROPERTY TO THE DVO IS RE QUIRED TO BE REJECTED BAL KRISHNA DAS VS. PERFECT POTTERIES CO LTD AIR 1985 M P 42 APPLIED. 12. IT WAS FURTHER HELD AS UNDER:- A WHOLE READING OF S. 50C (2) CLEARLY INDICATES THA T WHEN ASSESSEE CLAIMS THAT FAIR MARKET VALUE OF PROPERTY UNDER TRANSFER IS LESS THAN THE VALUATION DONE BY SVA AND THERE IS PRIMA FACIE MATERIAL TO JUSTIFY THIS CLAIM OF THE ASSESSEE THEN ASSESSING OFFICER IS STATUTORILY REQUIRED TO REFER TO THE PROPERTY TO THE DVO UNLESS HE JUSTIFIES THAT MATERIAL SUBMITTED BY THE ASSESSE E IN THIS REGARD ARE FALSE OR IT COULD NOT LEAD TO ANY INFERENCE THA T ASSESSEE WANTS HIM TO DRAW. ORDINARILY, EXPRESSION MAY IN THE S TATUTORY CONTEXT IS NOT AN EXPRESSION OF COMPULSION BUT IS A N ENABLING WORD INTENDING CAPACITY OR DISCRETION. CONTEXTUALLY IT M AY CONSTITUTE AN EXPRESSION OF POWER COUPLED WITH DUTY. WHETHER THE WORD MAY IS MANDATORY OR DISCRETIONARY CAN ALSO BE DECIDED W HERE IN THE SAME PROVISION OF WORDS SHALL OR MAY ARE USED. IF IT IS SO THEN IT IS CLEARLY INDICATIVE OF THE FACT THAT AT O NE PLACE WHERE SHALL IS USED, LEGISLATURE INTENDED TO MAKE THE P ROVISIONS MANDATORY AND WHERE THE WORD MAY IS USED IT IS IN TENDED TO MAKE IT DISCRETIONARY AND ENABLING ON THE FULFILLME NT OF CONDITIONS PRECEDING TO THE EXERCISE OF DUTY OF THE STATUTORY AUTHORITY. IN S.50C, LEGISLATURE HAS USED THE WORD SHALL IN S. 50C(1) THEREBY MANDATING THE ASSESSING OFFICER TO SUBSTITUTE THE VALUATION DONE BY SVA IN PLACE OF SALE CONSIDERATION SHOWN BY THE ASSESSEE IN CASE SALE CONSIDERATION IS LESS THAN VALUATION DONE BY SVA. IN CONTRAST TO THIS, IN S. 50C(2) THE WORD MAY IS US ED ENABLING THE ASSESSING OFFICER TO REFER THE VALUATION OF THE CA PITAL ASSET TO THE VALUATION OFFICER SUBJECT TO THE OBLIGATIONS FULFIL LED BY THE ASSESSEE AS LAID DOWN IN CLS.(A) AND (B). 7 13. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS , VIDE LETTER DATED 4.12.2008 HAD EXPLAINED THE REASO NS OF THE DISPARITY BETWEEN THE SALE CONSIDERATION REC EIVED AND THE VALUE WORKED BY THE STAMP VALUATION AUTHORITIES. FURTHER, A REQU EST WAS MADE TO REFER THE VALUATION OF LAND SOLD BY THE ASSESSEE TO THE VALUA TION OFFICER AS PRESCRIBED U/S 50C OF THE ACT. THE COPY OF THE SAID REQUEST LETTE R IS PLACED AT PAGE 11 OF THE PAPER BOOK. EVEN BEFORE THE CIT(A), IN THE WRITTEN SUBMISSIONS FILED IT WAS POINTED OUT THAT THE ASSESSING OFFICER HAD MADE THE ADDITIONS ON ACCOUNT OF DIFFERENCE IN SALE VALUE AS PER THE SALE DEED AND T HE CONSIDERATION RECEIVED BY THE ASSESSEE U/S 50C OF THE ACT, WITHOUT REFERRING THE SAID PROPERTY TO THE VALUATION CELL FOR DETERMINING THE FAIR MARKET VALU E OF THE SAID LAND ON THE DATE OF TRANSFER. READING THE PROVISIONS OF SECTIO N 48 AND 50C OF THE ACT IN CONJUNCTION, WE FIND THAT THE EXERCISE IS TO WORK O UT THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE DURING THE T RANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH. THE HON'BLE DELHI HIGH COURT IN CIT VS. SMT. NEELOFAR I. SINGH (2008) 14 DTR 108 (DEL) HAD EXPLA INED THE EXPRESSION FULL VALUE OF THE CONSIDERATION USED IN SECTION 48 OF THE ACT AS NOT HAVING ANY REFERENCE TO THE MARKET VALUE BUT ONLY TO THE CONSI DERATION REFERRED TO IN THE SALE DEED AS THE SALE PRICE OF THE ASSET WHICH HAD BEEN TRANSFERRED. UNDER SECTION 50C (1) OF THE ACT, IT IS PROVIDED THAT ON A TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH, WHERE THE SALE CONS IDERATION RECEIVED IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY A STAMP VALUA TION OFFICER, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY, SUCH VALUE SO ADO PTED OR ASCERTAINED SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION REC EIVED OR ACCRUING TO THE ASSESSEE, ON THE TRANSFER OF SUCH ASSET, FOR THE PU RPOSE OF SECTION 48 OF THE ACT. SECTION 50C (2) OF THE ACT, WITHOUT PREJUDICE TO TH E PROVISIONS OF SUB SECTION (1), PROVIDES THAT WHERE THE ASSESSEE CLAIMED BEFOR E ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATIO N OFFICER, EXCEEDED THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFE R AND WHERE THE VALUE SO 8 ADOPTED OR ASSESSED HAS NOT BEEN DISPUTED BEFORE TH E APPELLATE AUTHORITIES OF VALUATION, THE ASSESSING OFFICER MAY REFER THE VALU ATION OF CAPITAL ASSET TO A VALUATION OFFICER. THOUGH THE WORD MAY IS USED BUT IN CASE THE ASSESSEE FULFILLS THE OBLIGATIONS LAID DOWN IN CLAUSES (A) A ND (B) OF SECTION 50C(2) OF THE ACT, A REFERENCE IS TO BE MADE TO DVO TO ASCERTAIN THE FAIR MARKET VALUE OF PROPERTY. 14. THE ASSESSEE IN THE PRESENT CASE HAS FULFILLED BOTH THE CONDITIONS PROVIDED IN CLAUSES (A) AND (B) OF SECTION 50C (2) OF THE ACT AND IN THE ABSENCE OF THE ASSESSING OFFICER NOT POINTING OUT ANY FALS ITY IN THE CLAIM OF THE ASSESSEE WITH REGARD TO THE FAIR MARKET VALUE OF TH E PROPERTY THE ASSESSING OFFICER WAS STATUTORILY REQUIRED TO REFER THE VALUA TION OF THE SAID PROPERTY TO THE DVO. WE FIND THAT THE ASSESSING OFFICER IN T HE PRESENT CASE HAS FAILED TO MAKE A REFERENCE TO THE DVO. HOWEVER, IN ORDER TO MEET THE ENDS OF JUSTICE, WE REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OF FICER FOR DECIDING THE ISSUE AFRESH AFTER MAKING A REFERENCE TO THE DVO TO ASCER TAIN THE FAIR MARKET VALUE OF THE ASSET ON THE DATE OF TRANSFER AND IN ACCORDA NCE WITH LAW. THE ASSESSING OFFICER SHALL AFFORD A REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS ALL OWED FOR STATISTICAL PURPOSES. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JUNE, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 30 TH JUNE, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 9 10 ITA NO. 1010/CHD/2009 6. SECTION 50C INSERTED BY THE FINANCE ACT, 2002 W. E.F 1.4.2003 PROVIDES AS UNDER:- SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING A S A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION A UTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER; (B) THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFER ENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF T HE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND ( 6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 O F 1957), SHALL, WITH NECESSARY MODIFICA-TIONS, APPLY IN RELATION T O SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY TH E ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. [ EXPLANATION 1 ] .FOR THE PURPOSES OF THIS SECTION, VALUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. ] 11 (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [ OR ASSESSABLE ] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER.] 7. THE PROVISIONS OF SECTION 50C OF THE ACT ARE INV OKED IN CASES WHERE THE SALE CONSIDERATION RECEIVED ON TRANSFER OF A CAPITA L ASSETS, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. UNDER THE PROVISIONS OF SECTION 50C( 1) OF THE ACT, IT IS PROVIDED THAT THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEM ED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER, UNDER SECTION 48 OF THE ACT. 8. SECTION 50C (2) OF THE ACT PROVIDES THAT WHERE T HE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE O F PROPERTY, AS ON THE DATE OF TRANSFER AND THE SAME HAS NOT BEEN DISPUTED BEFORE THE APPELLATE AUTHORITY UNDER THE STAMP DUTY ACT, THEN THE ASSESSING OFFICE R MAY REFER THE VALUATION OF THE SAID CAPITAL ASSET TO A VALUATION OFFICER AS A REFERENCE MADE THE PROVISIONS OF SECTION 16A OF THE WEALTH TAX ACT. 9. THE LUCKNOW BENCH OF THE TRIBUNAL IN MOHD. SHOIB VS. DCIT (SUPRA), HELD THAT .. IT IS CLEAR FROM THE EXPLANATORY NOTE S TO THE AMENDMENT INTRODUCED BY FINANCE ACT, 2002 THAT IN CASE ASSESS EE CLAIMS THAT VALUE ADOPTED BY SVA EXCEEDED THE FAIR MARKET VALUE OF TH E PROPERTY ON THE DATE OF TRANSFER AND HE HAS NOT DISPUTED THAT VALUE BEFORE APPELLATE AUTHORITIES UNDER STAMP DUTY ACT, THE ASSESSING OFFICER MAY REFER TH E VALUATION OF THE PROPERTY TO THE DVO. IN OTHER WORDS, THE EXPLANATORY NOTES CLARIFY THAT BOTH THE 12 CONDITIONS AS MENTIONED IN CL.(A) AND CL.(B) OF S.5 0C (2) SHOULD BE CUMULATIVELY SATISFIED. THUS, THE ARGUMENT OF THE A UTHORIZED REPRESENTATIVE BASED ON INTERPRETATION OF SEMI-COLON BETWEEN CL.(A ) AND CL.(B) THAT IF EITHER OF THE CONDITIONS AS MENTIONED IN CL. (A) AND CL. (B) ARE SATISFIED THEN ASSESSING OFFICER HAS TO REFER THE PROPERTY TO THE DVO IS RE QUIRED TO BE REJECTED BAL KRISHNA DAS VS. PERFECT POTTERIES CO LTD AIR 1985 M P 42 APPLIED. 10. IT WAS FURTHER HELD AS UNDER:- A WHOLE READING OF S. 50C (2) CLEARLY INDICATES THA T WHEN ASSESSEE CLAIMS THAT FAIR MARKET VALUE OF PROPERTY UNDER TRANSFER IS LESS THAN THE VALUATION DONE BY SVA AND THERE IS PRIMA FACIE MATERIAL TO JUSTIFY THIS CLAIM OF THE ASSESSEE THEN ASSESSING OFFICER IS STATUTORILY REQUIRED TO REFER TO THE PROPERTY TO THE DVO UNLESS HE JUSTIFIES THAT MATERIAL SUBMITTED BY THE ASSESSE E IN THIS REGARD ARE FALSE OR IT COULD NOT LEAD TO ANY INFERENCE THA T ASSESSEE WANTS HIM TO DRAW. ORDINARILY, EXPRESSION MAY IN THE S TATUTORY CONTEXT IS NOT AN EXPRESSION OF COMPULSION BUT IS A N ENABLING WORD INTENDING CAPACITY OR DISCRETION. CONTEXTUALLY IT M AY CONSTITUTE AN EXPRESSION OF POWER COUPLED WITH DUTY. WHETHER THE WORD MAY IS MANDATORY OR DISCRETIONARY CAN ALSO BE DECIDED W HERE IN THE SAME PROVISION OF WORDS SHALL OR MAY ARE USED. IF IT IS SO THEN IT IS CLEARLY INDICATIVE OF THE FACT THAT AT O NE PLACE WHERE SHALL IS USED, LEGISLATURE INTENDED TO MAKE THE P ROVISIONS MANDATORY AND WHERE THE WORD MAY IS USED IT IS IN TENDED TO MAKE IT DISCRETIONARY AND ENABLING ON THE FULFILLME NT OF CONDITIONS PRECEDING TO THE EXERCISE OF DUTY OF THE STATUTORY AUTHORITY. IN S.50C, LEGISLATURE HAS USED THE WORD SHALL IN S. 50C(1) THEREBY MANDATING THE ASSESSING OFFICER TO SUBSTITUTE THE VALUATION DONE BY SVA IN PLACE OF SALE CONSIDERATION SHOWN BY THE ASSESSEE IN CASE SALE CONSIDERATION IS LESS THAN VALUATION DONE BY SVA. IN CONTRAST TO THIS, IN S. 50C(2) THE WORD MAY IS US ED ENABLING THE ASSESSING OFFICER TO REFER THE VALUATION OF THE CA PITAL ASSET TO THE VALUATION OFFICER SUBJECT TO THE OBLIGATIONS FULFIL LED BY THE ASSESSEE AS LAID DOWN IN CLS.(A) AND (B). 13 11. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS , VIDE WRITTEN REQUEST HAD EXPLAINED THE REASONS OF THE DISPARITY BETWEEN THE SALE CONSIDERATION RECEIV ED AND THE VALUE WORKED BY THE STAMP VALUATION AUTHORITIES. FURTHER, A REQUEST WAS MADE TO REFER THE VALUATION OF LAND SOLD BY THE ASSESSEE TO THE VALUA TION OFFICER AS PRESCRIBED U/S 50C OF THE ACT. THE COPY OF THE SAID REQUEST IS PL ACED AT PAGES 10-11 OF THE PAPER BOOK. EVEN BEFORE THE CIT(A), IN THE WRITTEN SUBMISSIONS FILED IT WAS POINTED OUT THAT THE ASSESSING OFFICER HAD MADE THE ADDITIONS ON ACCOUNT OF DIFFERENCE IN SALE VALUE AS PER THE SALE DEED AND T HE CONSIDERATION RECEIVED BY THE ASSESSEE U/S 50C OF THE ACT, WITHOUT REFERRING THE SAID PROPERTY TO THE VALUATION CELL FOR DETERMINING THE FAIR MARKET VALU E OF THE SAID LAND ON THE DATE OF TRANSFER. READING THE PROVISIONS OF SECTIO N 48 AND 50C OF THE ACT IN CONJUNCTION, WE FIND THAT THE EXERCISE IS TO WORK O UT THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE DURING THE T RANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH. THE HON'BLE DELHI HIGH COURT IN CIT VS. SMT. NEELOFER I. SINGH (SUPRA) HAD EXPLAINED THE EXPRESS ION FULL VALUE OF THE CONSIDERATION USED IN SECTION 48 OF THE ACT AS NOT HAVING ANY RE FERENCE TO THE MARKET VALUE BUT ONLY TO THE CONSIDERATION REFEREED TO IN THE SALE DEED AS THE SALE PRICE OF THE ASSET WHICH HAD BEEN TRANSFERRED. UNDER SECTION 50C (1) OF THE ACT, IT IS PROVIDED THAT ON A TRANSFER OF CAPIT AL ASSET BEING LAND OR BUILDING OR BOTH, WHERE THE SALE CONSIDERATION RECEIVED IS L ESS THAN THE VALUE ADOPTED OR ASSESSED BY A STAMP VALUATION OFFICER, FOR THE PURP OSE OF PAYMENT OF STAMP DUTY, SUCH VALUE SO ADOPTED OR ASCERTAINED SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING TO THE ASSESS EE, ON THE TRANSFER OF SUCH ASSET, FOR THE PURPOSE OF SECTION 48 OF THE ACT. S ECTION 50C (2) OF THE ACT, WITHOUT PREJUDICE TO THE PROVISIONS OF SUB SECTION (1), PROVIDES THAT WHERE THE ASSESSEE CLAIMED BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION OFFICER, EXCEEDED T HE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFER AND WHERE THE VALU E SO ADOPTED OR ASSESSED HAS 14 NOT BEEN DISPUTED BEFORE THE APPELLATE AUTHORITIES OF VALUATION, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER. THOUGH THE WORD MAY IS USED BUT IN CASE THE ASSESSEE FUL FILLS THE OBLIGATIONS LAID DOWN IN CLAUSES (A) AND (B) OF SECTION 50C(2) OF TH E ACT, A REFERENCE IS TO BE MADE TO DVO TO ASCERTAIN THE FAIR MARKET VALUE OF P ROPERTY. 12. THE ASSESSEE IN THE PRESENT CASE HAS FULFILLED BOTH THE CONDITIONS PROVIDED IN CLAUSES (A) AND (B) OF SECTION 50C (2) OF THE ACT AND IN THE ABSENCE OF THE ASSESSING OFFICER NOT POINTING OUT ANY FALS ITY IN THE CLAIM OF THE ASSESSEE WITH REGARD TO THE FAIR MARKET VALUE OF TH E PROPERTY THE ASSESSING OFFICER WAS STATUTORILY REQUIRED TO REFER THE VALUA TION OF THE SAID PROPERTY TO THE DVO. WE FIND THAT THE ASSESSING OFFICER IN T HE PRESENT CASE HAS FAILED TO MAKE A REFERENCE TO THE DVO. HOWEVER, IN ORDER TO MEET THE ENDS OF JUSTICE, WE REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OF FICER FOR DECIDING THE ISSUE AFRESH AFTER MAKING A REFERENCE TO THE DVO TO ASCER TAIN THE FAIR MARKET VALUE OF THE ASSET ON THE DATE OF TRANSFER AND IN ACCORDA NCE WITH LAW. THE ASSESSING OFFICER SHALL AFFORD A REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS ALL OWED FOR STATISTICAL PURPOSES. 13. THE GROUND NO.2 RAISED BY THE ASSESSEE IS WITH REGARD TO THE LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT, IS DIS MISSED, BEING CONSEQUENTIAL IN NATURE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES.