MOHANDAS FATEHPURIYA, Jaipur V. ITO, Jaipur

ITA 1072/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1940 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITHVIRAJ MEENA CIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Residential status; Fair market value
• Section: 143(3); 50C; 54F; 54; 37; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 1072/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2013-14. MOHANDAS FATEHPURIYA, SHOP NO. 67, RAMGANJ BAZAR, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 7(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAEPF 1969 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI ( CA ) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PRITHVI RAJ MEENA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.10.2017. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 26/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT (A)-III, JAIPUR DATED 27.09.2016 PERTAINING TO A.Y. 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED APPELLATE AUTHORITY, THE CIT (APPEALS) III, JAIPUR, HAS ERRED IN LAW BY HOLDING THAT AS PER SECTION 50C(2) IF THE ASSESSEE HAD CHALLENGED THE STAMP VALUE MADE BY REGISTRATION OF AUTHORITIES OR DISPUTED THE SAID VALUATION BEFORE THE COMPETENT AUTHORITIES COURT OR HIGH COURT, THEN THE AO MAY REFER VALUATION OF CAPITAL ASSET TO A VALUAT ION OFFICERS (PARA 4.3 PAGE 6 OF THE APPELLATE ORDER DATED 23.09.2016). 2 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. 2. THE LEARNED APPELLATE AUTHORITY HAS ERRED IN LAW A ND IN FACT IN OBSERVING IN THE IMPUGNED APPELLATE ORDER THAT AS OBSERVED IN THIS CASE, NO SUCH OBJECTION WAS RAISED BEFORE AO NOR CONTESTED BEFORE COMPETENT AUTHORITIES (PARA 4.3 PAGE 6 OF ORDER) AS WELL AS IN FAILING TO CONSIDER THE FACT THAT THE APPELLANT HAD CLEARLY DISPUTED THE VA LUATION ENDORSED BY THE STAMP VALUATION AUTHORITY VIDE POINT NO. 3 OF THE L ETTER DATED 18.03.2016 SUBMITTED IN THE COURSE OF ASSESSMENT PROCEEDINGS A S WELL AS IN THE COURSE OF HEARING OF FIRST APPEAL ALSO, AND HAS THU S FAILED IN GIVING PROPER DIRECTIONS TO THE AO IN TERMS OF PROVISIONS OF SECT ION 50C SUB-SECTION (2) FOR REFERRING THE VALUATION OF SOLD PLOT OF LAND TO A VALUATION OFFICER REFERRED TO IN THAT SECTION. 3. THE LEARNED APPELLATE AUTHORITY HAS ERRED IN LAW AN D IN FACT BY HOLDING THAT A.O. HAD NO OTHER OPTION BUT TO ACCEPT THE V ALUATION AS TAKEN BY SUB-REGISTRAR FOR STAMP DUTY PURPOSE WHICH IN MY VI EW IS CORRECT AS PER FACTS OF CASE AND ACCORDING TO THE PROVISION OF SEC TION 50C OF THE ACT (PARA 4.3 LAST PARA PAGE 6 OF THE APPELLATE ORDER. 4. THE LEARNED APPELLATE AUTHORITY HAS ERRED IN LAW AN D IN FACT IN FAILING TO CONSIDER VARIOUS ISSUES RAISED VIDE SUBMISSION DATE D 23.09.2016 DURING THE COURSE OF HEARING OF APPEAL, SPECIALLY THE MATT ERS RELATING TO APPLICATION OF COMMERCIAL RATES ISSUED BY DISTRICT LEVEL COMMITTEE (DLC) ON THE PLOT OF LAND FALLING IN AND MEANT FOR RESIDE NTIAL USE AND RELATING TO THE ACTUAL DATE OF REGISTRATION. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY GROUND OR GROUNDS OF APPEAL BEFORE FINAL HEARING OF THE SAME. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 21 ST MARCH, 2016. WHILE FRAMING THE ASSESSMENT, THE AO OBSERVED THAT THE ASSESSEE HAS SOLD A PROPERTY AT RS. 80,40,000/-. HOWEVER, AS PER THE STAMP VALUATION AUTHORITIES THE VALUATION WAS ADOPTED AT RS. 1,19,71,700/-. THE REFORE, THE AO INVOKING PROVISIONS OF SECTION 50C ADOPTED THE SALE VALUE OF THE PROPERTY AT RS. 1,19,71,700/- AND RE-COMPUTED THE LONG TERM CAPITAL GAIN THEREBY HE MADE ADDITION OF RS. 3 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. 48,84,149/- AS LONG TERM CAPITAL GAIN. AGAINST THI S, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THIS, THE ASSES SEE IS IN PRESENT APPEAL BEFORE US. 3. THE ONLY EFFECTIVE GROUND OF APPEAL IS AGAINST A DOPTING THE VALUE OF THE PROPERTY AS ADOPTED BY THE STAMP VALUATION AUTHORIT IES. 3.1. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME O F HEARING VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN AD OPTING THE SAID VALUE WHEN THE ASSESSEE HAS MADE A CLAIM BEFORE THE AO THAT THE VA LUE ADOPTED BY THE STAMP VALUATION AUTHORITIES IS NOT CORRECT. HE SUBMITTED THAT AS PER SECTION 50C(2) OF THE ACT, THE AO OUGHT TO HAVE REFERRED THE ISSUE TO THE DEPARTMENTAL VALUATION OFFICER (DVO). THE LD. COUNSEL REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS OF THE ASSESSEE ARE AS UNDER :- 3. SUBMISSIONS 3.1. SECTION 50C(2) PROVIDES THE SITUATION UNDER WH ICH AO IS REQUIRED TO REFER THE MATTER TO VALUATION OFFICER. THE SAID SUB -SECTION PROVIDES FOLLOWING TWO CONDITIONS: A. THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER TH AT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; B. THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE B Y THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY O THER AUTHORITY, COURT OR THE HIGH COURT. NEITHER ANY SPECIFIC MANNER NOR ANY PARTICULAR FORM IN INCOME TAX RULES IS PRESCRIBED FOR REQUESTING THE AO TO REFER THE MATTE R TO VALUATION OFFICER. THE 4 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. BASIC CONDITION IS CLAIMING BEFORE THE AO THAT VALUE ADOPTED BY STAMP VALUATION AUTHORITIES EXCEEDS THE FAIR MARKET VALUE AT WHICH THE TRANSACTION OF SALE HAS TAKEN PLACE. SUBSEQUENT CONDITION IS TH AT NO APPEAL IS FILED UNDER STAMP DUTY LAW. 3.2. IN THE PRESENT CASE, BOTH THE CONDITIONS ARE FULFIL LED. CLAIM WAS MADE VIDE LETTER DATED 18.03.2016 [PB 28-29]. FURTHER, NO APPEAL WAS FILED UNDER STAMP DUTY LAW. 3.3. THE LOWER AUTHORITIES HAVE ERRED IN HOLDING THAT TH E ASSESSEE HAS NOT MADE A REQUEST FOR REFERRING THE MATTER TO THE VALUATION OFFICER. IT IS SUBMITTED THAT VIDE LETTER DATED 18.03.2016 [PB 28-29] , THE ASSESSEE HAS DISPUTED THE VALUE OF THE PLOT TAKEN B Y THE STAMP DUTY AUTHORITIES. IT IS A SETTLED LEGAL PROPOSITION THAT LD. AO WHILE DISCHARGING HIS DUTIES IS BOUND TO REFER THE VALUAT ION TO THE VALUATION OFFICER WHEN THE ASSESSEE HAS DISPUTED TH E VALUE ADOPTED BY THE STAMP AUTHORITIES, EVEN IF THE ASSESSEE HAS NOT MADE A SPECIFIC REQUEST FOR THE SAME. 3.4. RELIANCE IS ALSO PLACED ON THE FOLLOWING JUDICIAL P RONOUNCEMENTS THE EXTRACTS OF WHICH HAVE BEEN SET OUT FOR THE SAK E OF CONVENIENCE:- HIGH COURT 3.4.I. IN THE CASE OF SUNIL KUMAR AGARWAL [2014] 47 TAXMANN.COM 158 (CALCUTTA) [CLC 1-5] IN WHICH IT WAS HELD THAT: . FOR THE AFORESAID REASONS, WE ARE OF THE OPINION TH AT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. T HE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVI DE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/T AXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATUR E SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVE N IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPR ESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUN CTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREAT MENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. [CLC 4] 5 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. JAIPUR ITAT 4.4.II IN THE CASE OF SMT. KAMLESH TIWARI , ITA NO. 587/JP/2013 [CLC 6-16] FOLLOWED THE RATIO LAID DOWN BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL (SUPRA) AND HELD THAT EVEN THOUGH THE ASSESSEE SIMPLY DISPUTED THE VALUATION A DOPTED BY THE STAMP VALUATION AUTHORITY BUT HAD NOT MADE ANY SPEC IFIC REQUEST TO REFER THE MATTER TO THE VALUATION OFFICER, THE ASSE SSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE VALUATION OFFICER. 3.4.III. IN THE CASE OF VIJAY KUMAR PATNI, ITA NO. 202/JP/2012 [CLC 29-42] , HONBLE BENCH RELYING ON THE CASE OF SUNIL KUMAR AGARWAL (SUPRA) HELD AS UNDER: AS PER SECTION 50C, THE ID ASSESSING OFFICER IS DUT Y BOUND TO TAKE VALUE AS TAKEN BY THE STAMP AUTHORITIES. AS PER LAW THE ASSESSEE CAN CHALLENGE THE VALUATION MADE BY THE STAMP AUTHORITY BY FILING THE APPEAL AGAINST THE STAMP DUTY PAID BEFORE THE APPEL LATE AUTHORITY UNDER THE REGISTRATION OF STAMP ACT AND ANOTHER ALT ERNATIVE IS THAT HE CAN OBJECT THE VALUATION PROPOSED BY THE ASSESSING OF ON THE BASIS OF SECTION 50C OF THE ACT AND ON THAT BASIS THE ASSESS ING OFFICER CAN REFER THE ISSUE TO THE DVO AND GET VALUATION AS PER LAW. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF KUMAR AGARWAL (S UPRA) CITED BY THE ASSESSEE ARE SQUARELY APPLICABLE. THEREFORE, THE LD ASSESSING OFFICER IS DIRECTED TO REFER THE MATTER TO THE DVO AND TAKE FAIR MARKET VALUE ON THE DATE OF SALE/TRANSFER. ON THAT BASIS, HE WILL C OMPUTE THE CAPITAL GAIN AS PER LAW. THEREFORE, WE SET ASIDE THIS ISSUE TO-THE ASSESSING OFFICER. [CLC 40-41] OTHER ITAT 3.4.IV. SARWAN KUMAR V. ITO [2014] 45 TAXMANN.COM 1 6 (DELHI - TRIB.) HEAD NOTES - SECTION 50C OF THE INCOME-TAX ACT, 1 961 - CAPITAL GAINS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES (CONDITIONS PRECEDENT) - ASSESSMENT YEAR 2006-07 - WHETHER WHERE AN ASSESSEE HAS CLAIMED BEFORE ASSESSING OFFICER TH AT VALUE OF LAND AND BUILDING ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDED FAIR 6 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. MARKET VALUE OF PROPERTY, THEN IN TERMS OF SECTION 50C(2)(A), ASSESSING OFFICER OUGHT TO HAVE REFERRED MATTER TO VALUATION OFFICER INSTEAD OF STRAIGHTWAY DEEMING VALUE ADOPTED BY STAMP VALUATIO N AUTHORITY AS FULL VALUE OF CONSIDERATION - HELD, YES [PARA 6] . 3.4.V. ANIL KUMAR JAIN VS. ITO [2013] 34 TAXMANN.CO M 258 (DELHI - TRIB.) ..HEAD NOTES - SECTION 50C OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - SPECIAL PROVISION FOR COMPUTATION OF FULL V ALUE OF CONSIDERATION IN CERTAIN CASES [REFERENCE TO VALUATION OFFICER] - ASSESSMENT YEAR 2009-10 - ASSESSEE EARNED SHORT TERM CAPITAL GAIN O N SALE OF PROPERTY - ASSESSEE MADE A CLAIM BEFORE ASSESSING OFFICER TH AT VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY WAS HIGHER THAN FAIR MARKET VALUE - VALUE ADOPTED BY STAMP VALUATION AUTHORITY HAD NOT EVER BEEN DISPUTED BY ASSESSEE IN ANY APPEAL OR REVISION OR O THERWISE TO ANY OTHER AUTHORITY OR COURT AS REFERRED TO IN SECTION 50C(2) - WHETHER IT WAS INCUMBENT UPON ASSESSING OFFICER TO REFER MATTE R FOR VALUATION TO A VALUATION OFFICER AS PROVIDED IN SECTION 50C(2) - HELD, YES.. 3.4.VI. RAJ KUMARI AGARWAL VS DCIT [2014] 47 TAXMA NN.COM 88 (AGRA - TRIB.) HEAD NOTES SECTION 50C OF THE INCOME-TAX ACT, 196 1 - CAPITAL GAINS - SPECIAL PROVISION FOR COMPUTATION OF FULL VALUE C ONSIDERATION (VALUATION BY DVO) - ASSESSMENT YEAR 2008-09 - WHET HER WHERE ASSESSEE HAD CLAIMED THAT ACTUAL MARKET VALUE OF HE R LAND WAS LESS THAN STAMP DUTY VALUATION ADOPTED BY ASSESSING OFFI CER, IT WAS INCUMBENT UPON ASSESSING OFFICER TO REFER VALUATION OF SAID LAND TO DEPARTMENTAL VALUATION OFFICER (DVO) - HELD, YES - WHETHER WHERE SAME HAD NOT BEEN DONE, MATTER WAS TO BE REMITTED B ACK FOR FRESH ADJUDICATION - HELD, YES [PARA 8] IN VIEW OF THE ABOVE, THE LOWER AUTHORITIES HAVE ER RED IN ADOPTING THE STAMP DUTY VALUATION WITHOUT REFERRING THE MATT ER TO VALUATION OFFICER, THEREFORE, THE SAME DESERVES TO BE QUASHED AND CAPITAL GAINS BE DIRECTED TO BE COMPLETED W.R.T. ACTUAL SAL E CONSIDERATION OF RS. 80,40,000 INSTEAD OF RS. 1,19,71,700. GROUND NO. 3: INVOKING THE PROVISIONS OF SECTION 50C : 7 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. 1. ASSESSING OFFICER LD. AO, ON OBSERVING THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY IS MORE THAN THE SALES CONSIDERATION, INVOKED THE P ROVISIONS OF SECTION 50C AND COMPUTED THE CAPITAL GAINS AT RS. 48,84,149. 2. COMMISSIONER OF INCOME TAX (APPEALS) LD. CIT(A) UPHELD THE ACTION OF LD. AO. 3. SUBMISSIONS 3.1. SECTION 50C IS A DEEMING PROVISION WHICH SHOUL D BE STRICTLY CONSTRUED. NOTHING MORE SHOULD BE READ THAN WHAT IS SPECIFICAL LY PROVIDED IN THE SECTION. IT IS SUBMITTED THAT THE PROVISIONS OF SEC TION 50C REQUIRE SUBSTITUTION OF SALES CONSIDERATION WITH STAMP DUTY VALUATION SU BJECT TO THE CONDITIONS LAID THEREIN, FOR THE PURPOSES OF SECTION 48 ONLY. IT HAS NOT BEEN REFERRED TO IN THE OTHER TAX SAVING SECTIONS LIKE SECTION 54, 5 4EC AND 54F. THEREFORE, THESE TAX SAVING PROVISIONS WILL OPERATE WITHOUT AN Y REFERENCE TO SECTION 50C. 3.2. RELIANCE IS PLACED ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ACE BUILDERS (P) LTD. (2006) 281 ITR 210 (BOM.) (CL C 17-24) WHEREIN IT WAS HELD THAT IT IS TRUE THAT SECTION 50 IS ENACTED WITH THE OBJECT OF DENYING MULTIPLE BENEFITS TO THE OWNERS O F DEPRECIABLE ASSETS. HOWEVER, THAT RESTRICTION IS LIMITED TO THE COMPUTA TION OF CAPITAL GAINS AND NOT TO THE EXEMPTION PROVISIONS. IN OTHER WORDS, WH ERE THE LONG-TERM CAPITAL ASSET HAS AVAILED OF DEPRECIATION, THEN THE CAPITAL GAIN HAS TO BE COMPUTED IN THE MANNER PRESCRIBED UNDER SECTION 50 AND THE C APITAL GAINS TAX WILL BE CHARGED AS IF SUCH CAPITAL GAIN HAS ARISEN OUT OF A SHORT-TERM CAPITAL ASSET BUT IF SUCH CAPITAL GAIN IS INVESTED IN THE MANNER PRESCRIBED IN SECTION 54E, THEN THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SE CTION 45 OF THE INCOME- TAX ACT [CLC 23] 3.3. IN THE ABOVE BACKGROUND IT IS SUBMITTED THAT W HEN, AS PER THE COMPUTATION OF TOTAL INCOME, THE CAPITAL GAINS OFFERED FOR TAX ARE RS. NIL, PROVISIONS OF SECTION 50C CANNOT BE INVOKED. SECTION 50C COMES IN TO PLAY ONLY WHEN SOME CAPITAL GAIN IS LIABLE FOR TAXATION. 3.4. RELIANCE IS PLACED ON THE HONBLE JAIPUR BENCH OF ITAT IN THE CASE OF SHRI GYAN CHAND BATRA (2010) 133 TTJ 482 (JP) [CLC 25-28] WHEREIN THE HONBLE BENCH HAS TAKEN THE VIEW THAT MEANING OF FU LL VALUE OF CONSIDERATION 8 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. IN SECTION 54F IS NOT GOVERNED BY SECTION 50C. HEAD NOTES OF THE CASE ARE REPRODUCED BELOW: SECTION 50C PROVIDES A DEEMING PROVISION OR CONSID ERING THE FULL VALUE OF CONSIDERATION AS THE VALUE ADOPTED FOR STAMP DUTY. THE DEEMING FICTION AS PROVIDED IN SECTION 50C IN RESPECT OF THE WORDS FU LL VALUE OF CONSIDERATION IS TO BE APPLIED ONLY FOR SECTION 48. THE WORDS FULL VALUE OF CONSIDERATION AS MENTIONED IN OTHER PROVISIONS OF THE ACT ARE NOT GO VERNED BY THE MEANING OF FULL VALUE OF CONSIDERATION AS CONTAINED IN SECTI ON 50C. THE NATURAL MEANING OF FULL VALUE OF CONSIDERATION REFERS TO CO NSIDERATION SPECIFIED IN THE SALE DEED. IN EXPLANATION TO SECTION 54F(1), IT IS MENTIONED T HAT NET CONSIDERATION MEANS THE FULL VALUE OF CONSIDERATION RECEIVED OR A CCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXP ENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER. T HE MEANING OF FULL VALUE OF CONSIDERATION IN EXPLANATION TO SECTION 54F(1) WILL NOT BE GOVERNED BY MEANING OF WORDS FULL VALUE OF CONSIDERATION AS M ENTIONED IN SECTION 50C. THE VALUE ADOPTED FOR STAMP DUTY IS TO BE CONSIDERE D AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTING THE CAPI TAL GAINS UNDER SECTION 48. SECTION 54F(1) SAYS THAT CAPITAL GAIN IS TO BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTIONS (A) AND (B) OF SECTION 54F(1). HENCE, DEEMING PROVISIONS AS MENTIONED IN SECTION 50C WILL NOT BE APPLICABLE TO SECTION 54F SO FAR AS THE MEANING OF FULL VALUE OF CONSIDERATION IS CONCERNED. [CLC 25] 3.5. HONBLE ITAT JAIPUR BENCH, RECENTLY IN THE CAS E OF SH. NAND LAL SHARMA, ITA NO. 413/JP/2012 FOLLOWING THE DECISION IN THE CASE OF SHRI GYAN CHAND BATRA (SUPRA) HELD THAT . WE FIND MERIT IN THE ARGUMENTS OF THE LD. AR THAT SECTION 50C IS DEEMING FICTION BY WHICH STAMP DUTY VALUE OF THE ASSET SOLD IS TO BE SUBSTITUTED FOR ACTUAL CONSIDERATION. THIS BEING PURELY A FICTION, ITS SCOPE IS LIMITED TO SECTION 50C ONLY AND CANNOT BE ENLARGED WITHOUT A SPECIFIC REFERENCE. IN THE ABSENCE OF ANY ENABLING STATUTORILY PROVISION, A FICTION CANNOT BE IMPORTED IN OTHER SECTION. THIS V IEW HAS BEEN SQUARELY ADOPTED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. NILOFER SINGH (SUPRA) AND FOLLOWED IT BY THIS BENCH ITAT IN THE CASE OF GYAN CHAND BATRA VS. ITO (SUPRA). RESPECTFULLY FOLLOWING THE S AME, WE HOLD THAT WHILE COMPUTING EXEMPTION U/S 54, THE ACTUAL SALE CONSIDE RATION IS TO BE TAKEN INTO CONSIDERATION AND NOT THE STAMP DUTY VALUATION U/S 50C. 3.6. IN VIEW OF THE ABOVE RATIO, THE PROVISIONS OF SECTION 50C CANNOT BE INVOKED IN THE PRESENT CASE. FROM PERUSAL OF RETURN FORM [PB 34-35] AND COMPUTATION OF RETURN OF INCOME [PB 42], IT IS EVIDENT THAT THE ASSESSEES 9 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. CAPITAL GAIN WAS RS. NIL. HENCE, LD. CIT(A) HAS ERR ED IN CONFIRMING THE ACTION OF LD. AO OF INVOKING THE PROVISIONS OF SECT ION 50C. IN VIEW OF THE ABOVE, PROVISIONS OF SECTION 50C HAS BEEN WRONGLY INVOKED AND, THEREFORE, THE ADDITION DESERVES TO BE DELETED . GROUND NO. 4: COMPUTING CAPITAL GAINS AT RS. 48,84, 149 BY CONSIDERING THE PLOT SOLD AS COMMERCIAL ASSET : 1. ASSESSING OFFICER LD. AO CONSIDERED THE PLOT OF LAND TO BE COMMERCIAL IN NATURE ON THE BASIS OF ENDORSEMENT OF STAMP VALUATION AUTHORITY [PB 8] AND ADOPTED THE DLC VALUE OF RS. 1,19,71,700 AS SALES CONSIDERATION INSTEAD OF R S. 80,40,000 DECLARED BY THE ASSESSEE. 2. COMMISSIONER OF INCOME TAX (APPEALS) LD. CIT(A) UPHELD THE CONTENTION OF THE LD. AO THAT THE PLOT SOLD IS COMMERCIAL PLOT BY HOLDING THAT THE ASSESSEE, EXCEPT FURNISHIN G PHOTOGRAPHS OF THE LAND, HAS NOT FURNISHED ANY EVIDENCE THAT THE ORDER OF SUB-RE GISTRAR WAS APPEALED AGAINST. 3. SUBMISSIONS 3.1. THE ASSESSEE PURCHASED THE SAID PLOT FROM NEW LIGHT HOSING CO-OPERATIVE SOCIETY [PB 7], AND, THEREFORE, IT IS ESTABLISHED BEYOND DOUBT THA T THE PLOT OF LAND WHEN PURCHASED WAS A RESIDENTIAL PLOT. FURTHER , THE PLOT WHEN SOLD WAS ALSO BEARING THE RESIDENTIAL STATUS ONLY. MERE MENT ION BY STAMP DUTY AUTHORITIES CANNOT CHANGE THE USE OF LAND. CHANGE O F LAND USE IS POSSIBLE THROUGH A LEGAL PROCESS. ASSESSEE HAS NEVER EVEN AT TEMPTED TO GET THE LAND USE CHANGED. THERE IS NO INDEPENDENT FINDING OF LOW ER AUTHORITIES THAT LAND USE WAS CHANGED. 3.2. THE ASSESSEE, BEFORE THE LOWER AUTHORITIES, HA S FURNISHED THE LATEST PHOTOGRAPHS OF THE PLOT OF LAND [PB 19-27] FROM WHICH IT IS EVIDENT THAT THE NEW LIGHT COLONY IN WHICH THE PLOT IS SITUATED IS A RESIDENTIAL AREA. 3.3. IN VIEW OF ABOVE, IT IS CLEAR THAT THE ASSESSE E HAS SUBMITTED ALL THE POSSIBLE EVIDENCES TO PROVE HIS CONTENTION. 10 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. IN VIEW OF THE ABOVE, THE PLOT IN QUESTION IS RESID ENTIAL ONLY AND, ACCORDINGLY, THE STAMP DUTY VALUATION HAS NO RELEVA NCE. 3.2. ON THE CONTRARY, THE LD. D/R VEHEMENTLY OPPOSE D THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 3.3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT (A) IN PARA 4.3 OF HER ORDER HAS DECIDED THE ISSUE AS UNDER :- 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, FINDINGS OF THE AO AND SUBMISSION OF THE APPELLANT. GROUND 1 & 2 AR E INTERRELATED AND THEREFORE TAKEN UP TOGETHER. THE FACTS ARE THAT THE APPELLANT SOLD A PIECE OF LAND SITUATED AT NEW LIGHT COLONY, JAIPUR FOR RS. 80,40,000/- WHICH WAS VALUED BY SUB-REGISTRAR AS ON DATE OF REG ISTRATION AT RS. 1,19,71,700/- IN TERMS OF ENDORSEMENT U/S 54 MADE I N REGISTERED SALE DEED. ACCORDINGLY AO ADOPTED THE SAME AS SALE CONSI DERATION FOR COMPUTATION OF LONG TERM CAPITAL GAIN U/S 50C. BEFO RE ME, THE ASSESSEE CONTENDED THAT THE SAID PLOT WAS SITUATED IN RESIDENTIAL AREA AND IS A RESIDENTIAL PLOT AND SUB REGISTRAR HAS WRO NGLY VALUED THE SAME AT RS. 1,19,71,700/- WITHOUT INFORMING APPELLA NT. THEREFORE, HE REQUESTED FOR CONSIDERING THE DECLARED SALE CONSIDE RATION OF RS. 80,40,000/- FOR COMPUTING CAPITAL GAIN. ON CAREFUL CONSIDERATION OF FACTS, IT IS S3EEN THAT EVEN BEFORE ME EXCEPT FURNISHING PHOTOGRAPHS OF LAND, NO EVIDEN CE IS FILED CLAIMING THAT THE ORDER OF SUB REGISTRAR CHARGING ADDITIONAL STAMP DUTY ON VALUE OF RS. 1,19,71,700/- WAS APPEALED AGAINST, BY THE A SSESSEE. MOREOVER THE ASSESSEE CONTENDED THAT AO SHOULD HAVE REFERRED THE MATTER FOR VALUATION, BUT FROM THE RECORDS IT I S SEEN NO SUCH REQUEST WAS MADE DURING ASSESSMENT PROCEEDINGS. AS PER SECTION 11 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. 50C(2) IF THE ASSESSEE HAD CHALLENGED THE STAMP VAL UE MADE BY REGISTRATION OF AUTHORITIES OR DISPUTED THE SAID VA LUATION BEFORE THE COMPETENT AUTHORITIES COURT OR HIGH COURT, THEN AO MAY REFER VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER. AS OBSERVE D IN THIS CASE, NO SUCH OBJECTION WAS RAISED BEFORE AO NOR CONTESTED BEFORE COMPETENT AUTHORITIES. FURTHER AS PER SECTION 155(15), THE A SSESSING OFFICER CAN RECTIFY THE ASSESSEE IF THE VALUATION DONE BY SUB-R EGISTRAR IS MODIFIED IN ANY APPEAL OR REVISION BY THE COMPETENT AUTHORIT IES. THEREFORE AO HAD NO OTHER OPTION BUT TO ACCEPT THE VALUATION AS TAKEN BY SUB-REGISTRAR FOR STAMP DUTY P8URPOSE WHIC H IN MY VIEW IS CORRECT AS PER FACTS OF CASE AND ACCORDING TO THE P ROVISION OF SECTION 50C OF THE ACT, THUS ACTION OF AO IS UPHELD. THE LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED UPO N THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF SUNIL K UMAR AGARWAL VS. CIT (2014) 47 TAXMANN.COM 158 (CALCUTTA). THE HONBLE HIGH COURT IN PARA 8 OF THE JUDGMENT HAS HELD AS UNDER :- 8. FOR THE AFORESAID REASONS, WE ARE OF THE OPINI ON THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CO NTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JU STICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXE D MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REG ISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CA RE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY TH E LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD B E REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PR OPERLY INSTRUCTED 12 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR T REATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. IN THE PRESENT CASE, THE ASSESSEE HAS POINTED OUT T HAT VIDE LETTER DATED 18 TH MARCH, 2016 DISPUTED THE VALUATION OF THE PROPERTY. HE DR EW OUR ATTENTION TO PAPER BOOK PAGES 28-29 WHERE THE LETTER DATED 18 TH MARCH, 2016 IS ENCLOSED. FOR THE SAKE OF CLARITY, SECTION 50C IS REPRODUCED HEREIN BELOW : 50C. SPECIAL PROVISION FOR FULL VALUE OF CONSIDER ATION IN CERTAIN CASES. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A R ESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED (O R ASSESSABLE) BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN T HIS SECTION REFERRED TO AS THE STAMP VALUATION AUTHORITY) 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 C ONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER: [PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXI NG THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR T HE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED O R ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTIN G FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT FO CONSIDERATION, OR A PART THEREO F, HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOU NT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER.] (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTION (1), WHERE - 13 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER TH AT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VA LUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSED (OR ASSESSABLE) BY TH E STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MAD E BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTI ON 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SEC TION 23A, SUB- SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFIC ER UNDER SUB- SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION (1) FOR THE PURPOSES OF THIS SECTION, VALUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE OF SECTI ON 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). [EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE ST4AMP VALUA TION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR A SSESSED, IF IT WERE REFERRED TO SUCH AUTHORIT6Y FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY]. FROM THE ABOVE PROVISIONS, IT IS EVIDENT THAT THE A O IS REQUIRED TO REFER THE ISSUE OF VALUATION OF PROPERTY TO THE DVO IF THE ASSESSEE CL AIMS THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITIES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. IN THE LIGHT OF THE ABOVE PROVISION AND RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE CALC UTTA HIGH COURT, SUPRA, WE HEREBY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND R ESTORE THE ASSESSMENT TO BE FRAMED DENOVO TO THE FILE OF THE AO. THE AO IS DIR ECTED TO REFER THE ISSUE OF FAIR 14 ITA NO. 1072/JP/2016 MOHANDAS FATEHPURIYA, JAIPUR. MARKET VALUE OF THE PROPERTY TO THE DVO. THE AO SH ALL MAKE ENQUIRY FROM THE STAMP VALUATION AUTHORITIES AS TO WHAT WAS THE BASI S FOR ADOPTING THE IMPUGNED VALUATION. THUS THE GROUND OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES.. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /10 /2017. SD/- SD/- FOE FLAG ;KNO DQY HKKJR (VIKRAM SINGH YADAV) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 /10/2017. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- MOHANDAS FATEHPURIA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 7(1), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1072/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR