ITO, Ward-7(1), Hyderabad V. Smt. Chitti Parvatha Vardhanamma, Hyderabad

ITA 1085/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74677 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1085/HYD/2013 ASSESSMENT YEAR 2005-06 THE INCOME TAX OFFICER WARD-7(1) HYDERABAD VS. SMT. CHITTI PARVATHA VARDHANAMMA, HYDERABAD PAN: AAZPC9873A [APPELLANT] [RESPONDENT] APPELLANT BY: SMT. K. HARITHA RESPONDENT BY: SRI B. SHANTHI KUMAR DATE OF HEARING: 18.02.2014 DATE OF PRONOUNCEMENT: 12.03.2014 ORDER PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 10 TH APRIL, 2013 FOR ASSESSMENT YEAR 2005-06. 2. THE REVENUE RAISED THE GROUND THAT THE CIT(A) OUGHT TO HAVE CONFIRMED THE ADDITION MADE ON THE BASIS OF TH E VALUE OF THE PROPERTY ADOPTED BY THE SR FOR STAMP DUTY PU RPOSES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, DERI VING INCOME FROM HOUSE PROPERTY, OTHER SOURCES AND INCOM E FROM CAPITAL GAINS HAD FILED THE RETURN OF INCOME ADMITT ING AN ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 2 INCOME OF RS. 1,00,717. THE ASSESSEE HAD SOLD PROP ERTY BEARING H. NO. 28-3-85, AND 86 AT BOTLAVARI STREET, GOVERNORPET, VIJAYAWADA ON 28.01.2005 FOR A SALE CONSIDERATION OF RS. 15,10,200/- AS RECORDED IN THE REGISTERED SALE DEED AND WHEREAS THE MARKET VALUE ADOPTED BY T HE REGISTRATION AUTHORITIES AS PER SALE DEED WAS RS. 4 4,57,000/-, HENCE, BY INVOKING THE PROVISIONS OF SEC. 50C, THE AO HAD BROUGHT THE DIFFERENCE IN THE LONG TERM CAPITAL GAI NS (LTCG) TO TAX, WHICH WORKED OUT TO RS. 29,46,800/-. ALL T HE GROUNDS RAISED BY THE ASSESSEE RELATE TO THIS ISSUE ONLY. THE ASSESSEE HAD SOLD THE PROPERTY BEARING H. NO. 28-3-85 AND 86 AT BOTLAVARI STREET, GOVERNORPET, VIJAYAWADA ON 28.01. 2005 FOR A SALE CONSIDERATION OF RS. 15,10,200/- AS RECORDED I N THE REGISTERED SALE DEED. HOWEVER, THE REGISTRATION AU THORITIES HAVE ADOPTED THE MARKET VALUE AS INDICATED IN THE S ALE DEED AT RS. 44,57,000/-. IN VIEW OF THE PROVISIONS OF S EC. 50C, THE LTCG HAD TO BE WORKED OUT, BY CONSIDERING THE VALUE ADOPTED BY THE REGISTRATION AUTHORITIES AS AGAINST THE RATE OF RS. 15,10,200/- TAKEN BY THE ASSESSEE. IT WAS OBSERVED BY THE AO FROM THE COMPUTATION OF STATEMENT OF INCOME THAT TH E ASSESSEE ADMITTED LTCG OF RS. 8,14,200/- ON SALE CONSIDERATION OF RS. 15,10,200/- BASED ON THE SALE DEED, AND CLAIMED EXEMPTION U/S. 54F. IT WAS OBSERVED THAT IN THE COMPUTATION STATEMENT THE ASSESSEE HAD MENTIONED TH AT THE ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 3 VIJAYAWADA PROPERTY WAS SOLD IN DISTRESS AS THE ASS ESSEE IS FORCED TO GO TO COURT FOR EVICTION OF TENANTS WHO H AVE BEEN STAYING THERE FOR OVER 25 YEARS AND NOT PAYING RENT REGULARLY. THE COURT CASES WERE PENDING WITH RENT CONTROL COUR T, VIJAYAWADA BEARING NOS. RCC 2/03, RCC 3/03 AND RCC 4/0 3. BEARING IN THEIR ADVANCED AGE OF 67 YEARS IN MIND A ND NONE OF THE CHILDREN IS IN A POSITION TO DEAL WITH THE COUR T MATTERS, THE ASSESSEE AND HER HUSBAND COULD NOT TAKE THE TRO UBLE OF THE COURT CASES AND DECIDED TO SELL OFF THE PROPERT Y, AS PER THE CLAIM OF THE ASSESSEE. HENCE, DUE TO THE PENDIN G LITIGATIONS, THEY WERE FORCED TO SELL THE PROPERTY AT THE ABOVE RATE EVEN THOUGH THE REALIZABLE MARKET VALUE IS HIG HER. 4. WHEN QUESTIONED ABOUT THE MARKET VALUE ADOPTED BY THE REGISTRATION AUTHORITIES IN THE SALE DEED AT RS . 44,57,000, THE AR OF THE ASSESSEE FILED LETTER DT. 18.10.2008 BEFORE THE AO STATING THAT EVEN IF THE MARKET VALUE OF RS. 12, 000 PER SQ. YARD IS CONSIDERED, AS INDICATED BY REGISTRATION AU THORITIES, THE LTCG CHARGEABLE TO TAX WOULD BE NIL. IN SUPPOR T OF THE VALUE OF RS. 12,000/- PER SQ. YARD, THE ASSESSEE HA D FILED A CERTIFICATE OF MARKET VALUE ISSUED BY THE JOINT SUB REGISTRAR, GUNADALA, WHEREIN IT WAS MENTIONED THAT THE MARKET VALUE WAS RS. 12,000/- PER YARD AS PER 2005 MARKET VALUE GUIDELINES REGISTER, ALTHOUGH IN ANOTHER CERTIFICAT E, THE SAME ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 4 JOINT SUB REGISTRAR MENTIONED THE MARKET VALUE AT R S. 12,000/- PER SQ. ACRE FOR THE SAME PROPERTY. HOWEV ER, WHILE REGISTERING THE PROPERTY, THE REGISTRATION AUTHORIT IES HAVE ADOPTED THE MARKET VALUE AT RS. 1536 PER SQ. YARD ( SQY). THE AO COMMENTED IN THE ASSESSMENT ORDER THAT IT IS NOT KNOWN WHY THE JOINT SUB REGISTRAR MENTIONED IN THE CERTIF ICATES LESSER FIGURES OF MARKET VALUE AND IN VIEW OF THIS, BOTH THE CERTIFICATES ISSUED BY THE JOINT SUB REGISTRAR, GUN ADALA CANNOT BE TAKEN INTO COGNIZANCE. FURTHER THE ASSES SEE IN THE LETTER FILED BEFORE THE AO SUBMITTED THAT EVEN IF T HE MARKET VALUE AT RS. 12,000/- PER SQY IS CONSIDERED, THERE WILL NOT BE ANY LONG TERM CAPITAL GAINS CHARGEABLE TO TAX, SINC E THE INVESTMENT IN NEW PROPERTY WAS QUANTIFIED AT RS. 25 ,17,610/-. THE AO, HOWEVER, NOT CONSIDERING THE EXPLANATION OF THE ASSESSEE HAD PROCEEDED TO BRING THE DIFFERENCE IN S ALE CONSIDERATION DECLARED (RS. 15,10,200) WITH THAT OF THE MARKET VALUE ADOPTED BY THE REGISTRATION AUTHORITIES (RS. 44,56,700) TO TAX, AS LTCG AND QUANTIFIED THE ADDITION AT RS. 29,46,800/- 5. THE LEARNED DR SUBMITTED THAT SECTION 50C IS MANDATORY AND NEEDS TO BE APPLIED IN THIS CASE. 6. ON THE OTHER HAND, THE LEARNED AR SUBMITTED THAT TH E ACTUAL SALE CONSIDERATION IS RS. 15,10,200 AS AGAIN ST SRO VALUE OF RS. 45,45,540 WHICH IS THE STAMP VALUE FOR THE ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 5 PURPOSE OF REGISTRATION. HE SUBMITTED THAT THE ASS ESSEE FILED TWO CERTIFICATES OF MARKET VALUE ISSUED BY THE JOIN T REGISTRAR ON 31.12.2008 FOR A.Y. 2005-06 MENTIONING VALUE OF THE PROPERTY IN ONE CERTIFICATE AS RS. 12,000 PER SQY A ND IN ANOTHER CERTIFICATE AS RS. 12000 PER ACRE. ACCORDI NG TO HIM, THE VALUE ADOPTED BY THE SRO IS UNFAIR AND EXCESSIV E. ACCORDING TO THE AR, THE PROPERTY WAS SOLD FOR LESS ER PRICE ON ACCOUNT OF PENDING LITIGATIONS WITH THE TENANTS. 7. FURTHER, HE SUBMITTED THAT THE ASSESSEE'S MOTHER HA D ACQUIRED THE PROPERTY ABOUT 70 YEARS BACK AND ON HE R DEMISE ON 18.08.1968 THE SAME WAS DEVOLVED ON THE ASSESSEE AND THAT FOR THE PURPOSE OF INDEXATION, THE ASSESSEE HA D TAKEN VALUE OF SUPERSTRUCTURE AS ON 01.04.1981 AT A VERY NOMINAL RATE WHEREAS THE REGISTRATION AUTHORITIES ADOPTED T HE SAME @ RS. 370/- PER SQUARE FOOT (SFT) FOR GROUND FLOOR AN D @ RS. 400/- PER SFT FOR 1 ST FLOOR. IT WAS AVERRED THAT THIS WAS THE VALUE FOR NEW STRUCTURES AS ON 2004-05. IT WAS PLEA DED THAT THIS VALUE CANNOT BE ADOPTED TO THE PROPERTY UNDER CONSIDERATION WHICH WAS BUILT IN 1934. IT WAS NARRA TED THAT THE BUYER AFTER PURCHASE HAD IMMEDIATELY DISMANTLED THE HOUSE PROPERTY. AND CONSTRUCTION NEW HOUSE SINCE TH E OLD HOUSE WAS IN DILAPIDATED CONDITION AND HENCE, THE V ALUE OF SUPER STRUCTURE ADOPTED BY THE ASSESSING OFFICER IS ON MUCH ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 6 HIGHER SIDE. IT WAS ALSO AVERRED THAT THE ASSESSING OFFICER HAD NOT BROUGHT OUT ANY REASONS FOR REJECTING THE ASSES SEE'S CLAIMS NOR BROUGHT ON RECORD ANY EVIDENCE TO SHOW T HAT THE ASSESSEE HAD RECEIVED MORE CONSIDERATION THAN WHAT HAD BEEN MENTIONED IN SALE DEED. IN THIS REGARD THE ASS ESSEE HAD PLACED RELIANCE IN THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CHANDNI BUCHAR (323 IT R 510) TO HOLD THAT 'THE VALUATION DONE BY ANY STATE AGENCY F OR THE PURPOSE OF STAMP DUTY WOULD NOT IPSO FACTO SUBSTITUTE THE ACTUAL SALE CONSIDERATION AS BEING PASSED ON TO THE SELLER BY THE PURCHASER IN THE ABSENCE OF ANY ADMISSIBLE EVID ENCE. 8. THE AR OBJECTED TO INVOKING OF PROVISIONS OF SEC. 5 0C BY THE AO, WHICH READ AS UNDER: '(A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAM P VALUATION 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 ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB SECTION (1) HAS NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE 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 MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4) (5) AN D (6) OF SECTION 16A, CLAUSE (I) OF SUB SECTION (1) AND SUB SECTIONS (6) AND (7) OF SECTION 23 R SUB SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 27 OF WEALTH TAX ACT, 1957 (27 OF 19 57), SHALL, WITH NECESSARY MODIFICATION, APPLY IN RELATION TO S UCH 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.' ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 7 9. THE AR SUBMITTED THAT IN THE ASSESSEE'S CASE, BOTH CONDITIONS MENTIONED IN (A) AND (B) ARE SATISFIED A ND, THEREFORE, THE AO WAS NOT JUSTIFIED IN INVOKING SEC TION 50C OF THE ACT. THE AR FURTHER RELIED ON THE DECISION OF I TAT, C- BENCH, MUMBAI IN THE CASE OF DR. CHANDIDAS GUPTA VS . ITO IN ITA NO. 3666/MUM/2009 DT. 19.03.2010 WHEREIN IT WAS HELD THAT 'WHEN THE ASSESSEE OBJECTS TO THE VALUATION AD OPTED BY REGISTRATION FOR STAMP DUTY PURPOSE, THE DEPARTMENT HAS TO REFER THE ISSUE TO THE VALUATION OFFICER AND ADOPTI NG MARKET VALUE, WHEN THE SAME IS DISPUTED BY THE ASSESSEE, W ITHOUT REFERRING TO VALUATION OFFICER IS NOT A JUSTIFIED A CTION OF THE AO'. THE AR PLEADED FOR DELETION OF THE ADDITION O F RS. 29,46,800/- MADE BY THE AO. 10. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE SO LD HER PROPERTY LOCATED AT 28-3-85 AND 86, BOTLAVARI S TREET, GOVERNORPET, VIJAYAWADA, FOR A CONSIDERATION OF RS. 15,10,200/- VIDE SALE DEED DATED 28.02.2005 AND COM PUTED THE CAPITAL GAINS AT RS. 8,14,200/- AND CLAIMED EXE MPTION U/S, 54, FOR HAVING INVESTED THE AMOUNTS OF RS. 25,17,66 0/-, IN A RESIDENTIAL PROPERTY AT HYDERABAD. HOWEVER, THE AO HAS ADOPTED THE SALE VALUE OF THE PROPERTY AT RS. 44,56 ,720/-, BEING THE MARKET VALUE OF THE LAND (242 SQY) AND TH E STRUCTURE THEREON, TO ARRIVE AT THE NET TAXABLE CAPITAL GAINS OF RS. ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 8 29,46,800/-, BEING THE DIFFERENCE BETWEEN THE SALE CONSIDERATION OF THE PROPERTY AS PER SALE DEED (RS. 15,10,200) AND THE MARKET VALUE OF THE PROPERTY UNDER REFERENC E (RS. 44,57,000), BY INVOKING THE PROVISIONS OF SEC. 50C OF THE INCOME-TAX ACT, 1961. IN THE PROCESS, THE AO IGNOR ED THE CLAIM OF THE ASSESSEE THAT EVEN AT THE RATE OF RS. 12,000/- PER SQ. YARD, WHICH WAS AS PER THE CERTIFICATE ISSUED B Y THE REGISTRATION AUTHORITY DT. 31.12.2007, AND AS PER T HE CALCULATIONS BASED ON SUCH VALUATION, THERE WOULD N OT BE ANY TAXABLE CAPITAL GAINS, AFTER THE CLAIM OF ELIGIBLE EXEMPTION OF RS. 25,17,600/-. IN THIS REGARD IT MAYBE PERTINENT TO MENTION HERE THAT THE PROPERTY UNDER REFERENCE WAS IN LITIG ATION, WITH REGARD TO THE PROVISIONS OF AP RENT CONTROL ACT AND THE SAID CONDITION WAS ALSO STIPULATED IN THE SALE DEED. AS PER THE ASSESSEE, DUE TO THE SAID REASON THE PROPERTY WAS S OLD AT LESSER VALUE, COMPARED TO THE MARKET VALUE. FURTHER , THE STRUCTURE THEREON THE LANDED PROPERTY WAS OLD, WITH BUILDING MORE THAN 70 YEARS OLD, AS SUCH THERE IS NO VALUE F OR THE CONSTRUCTED AREA, AS AGAINST WHICH THE REGISTERING AUTHORITIES PUT THE MARKET VALUE AT RS. 370 (GROUND FLOOR) TO R S. 400 (FIRST FLOOR). FURTHER, AS PER THE ASSESSEE, THE M ARKET VALUE OF THE PROPERTY WAS INDICATED AT RS. 12,000 PER SQ. YA RD, FOR THE YEAR 2005, AS PER THE CERTIFICATE DT. 31.12.2007, I SSUED BY JOINT SUB REGISTRAR, GUNADALA, VIJAYAWADA, FOR THE PURPOSE OF ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 9 COURT PROCEEDINGS, AND IF THE VALUE IS ADOPTED AT T HE SAME RATE, THERE WOULD NOT BE ANY FURTHER CAPITAL GAINS BY VIRTUE OF INVESTMENTS MADE IN PROPERTY AT HYDERABAD. IN THIS REGARD, IT MAY BE RELEVANT TO MENTION THAT SUCH CLAIM OF THE A SSESSEE WAS REJECTED BY THE AO FOR THE REASONS THAT THE SAM E REGISTERING AUTHORITY ISSUED THE CERTIFICATE, PUTTI NG THE VALUE OF THE PROPERTY UNDER REFERENCE AT RS. 12,000/- PER ACRE AND THE SAME PROPERTY GOT REGISTERED AT THE VALUE OF RS . 18,000/- PER SQ. YARD. IN THE LIGHT OF INCONSISTENT POSITION /STAND TAKEN BY THE SUB-REGISTRATION AUTHORITIES, THE AO ADOPTED THE VALUE OF THE PROPERTY AT MARKET VALUE AS PER THE SALE DEE D, AS ON 28.01.2005, WHICH HAS BEEN WORKED OUT AS UNDER: LAND OF 242 SQY @ RS. 15,360/- PER SQY RS. 37,17 ,120 GROUND FLOOR 1706 SFT @ RS. 370 PER SFT RS. 6 ,31,220 FIRST FLOOR 493 SFT @ RS. 400 PER SFT RS. 1,97,200 TOTAL MARKET VALUE RS. 45,45,540 11. THE CIT(A) OBSERVED THAT THE AO HAS ADOPTED THE TOT AL VALUE AT RS. 44,56,720/- AS AGAINST THE TOTAL VALUE OF RS. 45,45,540/- AS WORKED OUT ABOVE IN DETAIL. FURTHER, THE VALUE ADOPTED FOR THE LAND IS RS. 15,360/- PER YARD, BUT NOT RS. 18,000/- PER SQ. YARD, AS ASSUMED BY THE ASSESSING OFFICER. IN THIS REGARD, IT IS RELEVANT TO MENTION HERE THAT TH E PROPERTY UNDER REFERENCE WAS IN DISPUTE WITH THE TENANT AND DUE TO THE ADVANCED AGE OF THE ASSESSEE, BEING THE OWNER OF TH E ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 10 BUILDING, PUT THE PROPERTY FOR DISTRESS SALE AND TH IS FACT REVEALED BY THE RELEVANT CLAUSE IN THE SALE DEED. T HUS, THE SALE CONSIDERATION AS PER SALE DEED WAS QUANTIFIED AT RS. 15,10,200/- ON WHICH THE CAPITAL GAINS HAVE BEEN CA LCULATED. FURTHER, THE MARKET VALUE OF THE PROPERTY FOR THE F Y 2005-06, WAS PUT AT RS. 12,000 PER SQ. YARD, AS PER THE CERT IFICATE DATED 31.12.2008, ISSUED BY THE CONCERNED REGISTRATION AU THORITY, WHICH WAS NEITHER DISPUTED OR QUESTIONED, THOUGH IT IS A FACT THAT THE SAME REGISTRATION AUTHORITY ISSUED ANOTHER CERTIFICATE OF THE SAME DATE, APPARENTLY BY FAUX PA SS, INDICATING THE RATE AT RS. 12,000 PER ACRE. THE AO INSTEAD OF PONDERING OVER, HOW THE REGISTRATION AUTHORITY ADOP TED THE DIFFERENT RATES ON DIFFERENT OCCASIONS FOR THE SAME PROPERTY, THE CLAIM OF THE ASSESSEE COULD HAVE BEEN EXAMINED WITH REFERENCE TO THE FACTS OF THE CASE / DEFICIENCIES AS SOCIATED WITH THE PROPERTY UNDER REFERENCE OR COULD HAVE REF ERRED FOR VALUATION. FURTHER, AS COULD BE SEEN FROM THE FACT S OF THE CASE, THE BUILDING IS QUITE OLD AND THE RATES AT PR ESENT MARKET VALUE AS ADOPTED FOR THE SAID BUILDING/STRUCTURE, MA Y INDICATE THE SITUATION THAT DEFIES THE LOGIC. THE P ROVISIONS OF SEC. 50C(2), TO VALUATION DEMANDS SITUATION OF REFE RENCE, WHICH THE AO APPEARS TO HAVE CONVENIENTLY IGNORED. 4.5 IT MAY BE RELEVANT TO MENTION THAT THE ASSESSEE RELIED ON THE VALUATION AS INDICATED BY THE JOINT SU B REGISTRAR AT RS. ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 11 12,000 PER SQ. YARD, FOR THE PURPOSE OF COURT PROCE EDINGS, WHICH APTLY APPLIES TO THIS CASE, AS AN ALTERNATE P LEA, FOR ADOPTING AND COMPUTING THE CAPITAL GAINS. THE VALUA TION INDICATED BY THE REGISTRATION AUTHORITY, SUPPORT TH E ALTERNATE PLEA OF THE ASSESSEE, WHERE THE VALUATION AS PER TH E SALE DEED IS DISPUTED BY THE AO. THERE IS NO SEPARATE INFORMA TION TO THE AO TO DISPUTE THE VALUE AS PER THE SALE DEED, EXCEP T THE VALUE AS PER DRO. UNDER THE CIRCUMSTANCES, THE JUDICIAL D ECISION IN THE CASE OF CIT VS. CHANDINI BUCHAR (SUPRA), AS REL IED UPON BY THE ASSESSEE, SUPPORT THE VIEW THAT THE AO IS OBLIG ED TO BRING ON RECORD POSITIVE EVIDENCE, INDICATING THAT THE AS SESSEE HAS PAID ANYTHING MORE THAN THE SUM DISCLOSED IN THE PU RCHASE DEED. IN THIS CASE, NOT ONLY THE AO FAILED TO BRING IN THE FURTHER EVIDENCE TO INDICATE HIGHER PRICE PAID BY T HE ASSESSEE BUT ALSO IGNORED TO LOOK AT THE PROBLEMS ASSOCIATED WITH THE PROPERTY UNDER REFERENCE AS WELL AS THE VALUE OF TH E PROPERTY INDICATED BY THE REGISTRATION AUTHORITIES, AS AN AL TERNATIVE EVIDENCE FOR VALUING THE PROPERTY. THUS, BASED ON T HE FACTS OF THE CASE AND THE JUDICIAL DECISIONS, THE CIT(A) WAS OF THE OPINION THAT THE AO SHOULD ACCEPT THE SALE VALUE AS SHOWN IN SALE DEED OR ADOPT THE VALUE OF THE PROPERTY AS PER THE VALUATION FOR COURT PROCEEDINGS, AS INDICATED BY TH E REGISTRATION AUTHORITIES, FOR COMPUTING THE CAPITAL GAINS. FURTHER, WHILE SHOWING THE EXEMPTION U/S. 54, THE ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 12 INVESTMENTS IN PROPERTY AT HYDERABAD, AS INDICATED BY THE ASSESSEE, IN THE COMPUTATION AND RETURN OF INCOME N EED TO BE CONSIDERED, BY EXAMINING THE SOURCES FOR SUCH INVES TMENT, IF REQUIRED. ACCORDINGLY, THE CIT(A) HELD THE ISSUE I N FAVOUR OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SECTION 50C OF THE ACT PROVIDE S THAT WHERE A CONSIDERATION RECEIVED OR ACCRUED AS A RESU LT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMEN T, REFERRED TO AS THE STAMP VALUATION AUTHORITY FOR TH E PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFE R, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, F OR THE PURPOSE OF SECTION 48, BE DEEMED TO BE THE FULL VAL UE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. 13. IT IS STATED IN THAT SECTION THAT THE GUIDELINE VAL UE SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION WHERE THE CONSIDERATION STATED BY THE ASSESSEE IS LESS THAN T HE GUIDELINE VALUE. NO MUCH ARGUMENT IS NECESSARY TO SAY THAT SE CTION 50C(1) IS A DEEMING PROVISION. A DEEMING PROVISION IS TO BE STRICTLY APPLIED WITHOUT WIDENING ITS SCOPE. BUT IT IS ALSO ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 13 EQUALLY IMPORTANT TO NOTE THAT A DEEMING PROVISION IS UN- FLEXIBLE. WHERE A DEEMING PROVISION STATES A PARTIC ULAR MODE OF OPERATION, THAT MODE SHOULD BE ADOPTED AND IT CA NNOT BE DILUTED OR DISTINGUISHED OR DIFFERENTIATED. IN THE PRESENT CASE, THE GUIDELINES VALUE OF THE IMPUGNED PROPERTY IS AT RS. 44,57,000. THE SALE DEED VALUE IS AT RS. 15,10,200 . THE DOCUMENT CONSIDERATION IS LESS THAN THE GUIDELINES VALUE. THE DEEMING PROVISION OF SECTION 50C(1) OPERATES. THE AO HAS TO ADOPT THE GUIDELINES VALUE. 14. TO SAFEGUARD ASSESSEE'S INTEREST, THE ASSESSEE COUL D REQUEST THE AO TO REFER THE MATTER TO THE DVO FOR V ALUATION. THE ASSESSEE HAS NOT ASKED FOR THIS. BEING SO, THE AO HAS TO COMPLETE THE ASSESSMENT AS PER THE PROVISIONS OF SE CTION 50C OF THE ACT AND THE ONLY WAY OPEN TO THE AO WAS TO C OMPLETE THE ASSESSMENT BY ADOPTING THE GUIDELINES VALUE CON SIDERED BY THE SRO. IN THE PRESENT CASE THE CIT(A) WAS CAR RIED AWAY BY CERTAIN SITUATIONS EXPLAINED BY THE ASSESSEE BEF ORE HIM. FIRSTLY, THE ASSESSEE HAD EXPLAINED THAT THE ASSESS EE HAS MADE SALE OF CAPITAL ASSET ON ACCOUNT OF OLD AGE AN D PENDING LITIGATIONS WITH THE TENANTS. IN OTHER WORDS, IT W AS A DISTRESSED SALE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE JOINT REGISTRAR HAS GIVEN TWO CERTI FICATES, VIDE LETTER DATED 31.12.2008 FOR THE YEAR 2005, THAT THE PROPERTY ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 14 VALUATION IN THAT AREA IS AT RS. 12000 PER SQY AND ANOTHER CERTIFICATE RS. 12000 PER ACRE. HOWEVER, FACTS ON RECORD SUGGEST THAT THE PROPERTY WAS REGISTERED BY THE ASS ESSEE WITH THE REGISTRATION AUTHORITIES AT RS. 18000 PER SQY. HAD THE ASSESSEE HAS ANY GRIEVANCE, SHE SHOULD HAVE CHALLEN GED THE VALUE ADOPTED BY THE SRO BEFORE THE REGISTRAR. THE ASSESSEE HAVING NOT CHALLENGED THE VALUE ADOPTED BY THE SRO FOR REGISTRATION PURPOSES AT RS. 18000 PER SQY, SHE CAN NOT CHALLENGE THE VALUATION ADOPTED BY THE SRO BEFORE U S. IN OUR OPINION, THESE FACTORS, HOWEVER, HEARTENING MAY BE, CANNOT BE ACTED UPON BY THE AUTHORITIES FOR THE REASON THA T SECTION 50C IS A DEEMING SECTION. ANY RELIEF GRANTED TO TH E ASSESSEE MUST BE ON THE BASIS OF A REASON. THE REASON MUST BE WITHIN THE FOUR CORNERS OF THE LAW. WHATEVER MAY BE THE P ROBLEMS SUFFERED BY AN ASSESSEE, IN REALITY, THOSE REASONS CANNOT BE PERMITTED TO GO BEYOND THE SCOPE OF SECTION 50C. WHEN SECTION 50C SAYS THAT THE SALE CONSIDERATION SHALL BE THE GUIDELINES VALUE, IF THE STATED CONSIDERATION IS LE SS THAN THAT, IT MEANS THE LAW HAS ALREADY DECIDED THE COURSE OF ACTION. NOTHING CAN PERSUADE THE SITUATION INCLUDING THE GE NUINE AND VALID DIFFICULTIES OF AN ASSESSEE. 15. IT IS TO ALLEVIATE THE DIFFICULTIES OF AN ASSESSEE THAT A PROVISION FOR REFERENCE TO DVO IS GIVEN IN THE SECT ION. BUT, ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 15 WHILE CONSIDERING THE REPORT OF THE DVO AND OTHER S UCH FACTORS TO INTERFERE IN THE VALUATION OF THE PROPER TY, IT IS NOT PERMISSIBLE FOR THE APPELLATE AUTHORITIES TO CONSID ER PERSONAL AND INDIVIDUAL REASONS. THE RELIEF GRANTED BY THE A PPELLATE AUTHORITY SHOULD BE ON THE BASIS OF APPARENT FEATUR ES OF THE PROPERTY IN QUESTION. THE MISFORTUNES HAPPENED TO T HE ASSESSEE OR THE DIFFICULTIES FACED BY THE ASSESSEE OR THE MATTER OF DISTRESS SALE, ETC. CANNOT BE A GROUND TO MODIFY THE VALUATION. IF SUCH EXTRANEOUS FACTORS ARE RELIED UP ON, WE WOULD BE CONTRAVENING THE DEEMING PROVISION OF LAW STATED IN SECTION 50C OF THE ACT. THEREFORE, WE FIND THAT ON THE ABOVE STATED POINT WE HAVE TO DIFFER FROM THE VIEW TAKEN BY THE CIT(A). THIS IS WITHOUT QUESTIONING THE AUTHORITY O F THE CIT(A) TO INTERFERE IN THE VALUATION OF THE PROPERTY, FOR THE PURPOSE OF DETERMINING THE CONSIDERATION UNDER SECTION 50C OF THE ACT. 16. IN THE JUDGEMENT RELIED ON BY THE LEARNED AR IN THE CASE OF CHANDNI BUCHER (SUPRA), THE AO CONSIDERED THE ST AMP VALUE INSTEAD OF PURCHASE PRICE DISCLOSED IN THE SA LE DEED TO TREAT IT AS INCOME FROM UNEXPLAINED SOURCES IN THE HANDS OF PURCHASER TO TREAT THE EXCESS PAYMENT AS UNEXPLAINE D INVESTMENT. IN OTHER WORDS, THE AO APPLIED THE PRO VISIONS OF SECTION 50C IN THE CASE OF PURCHASER THOUGH THE PRO VISIONS OF ITA NO. 1085/HYD/2013 SMT. CHITTI PARVATHA VARDHANAMMA ============================== 16 SECTION 50C ARE APPLICABLE TO THE SELLER. BEING SO , THIS JUDGEMENT CANNOT BE APPLIED TO A SELLER OF CAPITAL ASSET. ACCORDINGLY, THE GROUND TAKEN BY THE REVENUE IS ALL OWED. 17. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2014. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 12 TH MARCH, 2014 TPRAO COPY FORWARDED TO: 1. THE ITO, WARD-7(1), 2 ND FLOOR, B BLOCK, IT TOWERS, HYDERABAD. 2. SMT. CHITTI PARVATHA VARDHANAMMA, D. NO. 10-3-41 4/ 92/2RT, VIJAYANAGAR COLONY, HYDERABAD. 3. THE CIT(A)-VI, HYDERABAD. 4. THE CIT-VI, HYDERABAD 5. THE DR BENCH 'A', ITAT, HYDERABAD