DCIT,Cir.-2, Pune V. Tajuddin M. somjee, Pune

ITA 1149/PUN/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56441 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 16-11-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: DR SUNIL PATHAK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH: B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI D. KARUNAKARA RAO, AM I.T.A. NO. 1149/PN/2006 : A.Y. 2003-04 DY. CIT CIR. 2, PUNE APPELLANT VS. MR. TAJJUDIN M. SOMJEE 1 NAYLOR ROAD PUNE-411 001 PAN ACQPS 5642 E RESPONDENT I.T.A. NO. 1199/PN/2006 : A.Y. 2003-04 MR. TAJJUDIN M. SOMJEE 1 NAYLOR ROAD PUNE-411 001 PAN ACQPS 5642 E APPELLANT VS. ASSTT. CIT (OSD) PUNE RESPONDENT ASSESSEE BY : DR. SUNIL PATHAK DEPARTMENT BY: SHRI S.K. SINGH DATE OF HEARING : 23-8-2011 DATE OF PRONOUNCEMENT : 30-8-2011 ORDER PER SHAILENDRA KUMAR YADAV THESE CROSS APPEALS PERTAIN TO THE SAME ASSESSEE FO R A.Y. 2003-04. SO THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONV ENIENCE. ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 2 - 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN ALLOWING RELIEF OF RS. 75,26,125/- ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF LAND, WITHOUT APPRECIATING THE SPECIAL PROVISION S OF SEC. 50-C(1) OF THE ACT; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN INTERPRETING THE PROVISIONS OF SEC. 50C(2) WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE NEVER CLAIMED BEFORE THE ASSESSIN G OFFICER THAT THE VALUE SO ADOPTED OR ASSESSED BY TH E STAMP VALUATION AUTHORITY EXCEEDS THE FMV OF THE PROPERTY AS ON HE DATE OF TRANSFER 3. THE GROUNDS RAISED BY THE ASSESSEE IN HIS APPEAL READ AS UNDER: 1) THE LEARNED CIT(A) ERRED IN CONFIRMING ACTION O F ASSESSING OFFICER IN DISALLOWING CLAIM FOR EXEMPTIO N U/S 54EC. 2. THE APPELLANT PRAYS THAT 2.1 IT MAY BE HELD THAT APPELLANT HAS MADE INVESTMENT WITHIN SPECIFIED TIME AND THAT IT IS ENTITLED TO EXEMPTION U/S 54EC; 2.2 PERSONAL HEARING MAY BE GRANTED; 2.3 ANY OTHER RELIEF YOUR HONURS MAY DEEM FIT 3. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDIC E TO EACH OTHER AND THE APPELLANT CRAVES LEAVE TO ADD , ALTER, AMEND O DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 4. THE ASSESSEE DERIVES INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINESS, CAR HIRE CHARGES AND CAPITAL GAINS. THE ASSESSEE HAD BOOKED INCOME UNDER THE HEAD CAPI TAL GAINS ON ACCOUNT OF TWO TRANSACTIONS, BEING LONG T ERM CAPITAL ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 3 - GAINS AT RS. NIL ON SALE OF KONDHWA LAND AND THE OT HER BEING LONG TERM CAPITAL GAIN AT RS. 10,459/- ON SALE OF S HARES. THE ASSESSING OFFICER HAS NOTED THE FOLLOWING DETAILS A S WERE SHOWN IN THE NOTE NO. 9 ACCOMPANYING THE STATEMENT OF TOTAL INCOME. COMPUTATION OF LONG TERM GAINS LAND AT VIMANNAGAR DESCRIPTION LAND AT S.NO. 27/6A AND 27/8 KONDHWA KHURD, DIST. PUNE, ADMEASURING ABOUT 1 HECTARE 14.75 ARES 2,04,00,000 LESS EXPENSES INCURRED FOR SALE 0 2,04,00.000 LESS INDEXED COST OF ACQUISITION (PURCHASE DEED 4-10-1993 (OUR SHARE) 23,548 TOTAL COST INDEX VALUE (C11-447) 23,548 43,185 LONG TERM CAPITAL GAINS 2,03,56,875 LESS EXEMPTION U/S 54EC INVESTMENT IN NABARD CAPITAL GAINS BONDS 10-5- 2003 47,00,000 INVESTMENT IN NHB CAPITAL GAINS BONDS 29-9-2003 1, 57,00,000 2,04,00,000 BALANCE GAINS 0 5. THOUGH THE ASSESSEE HAD FURNISHED DOCUMENTS RELA TING TO THE ABOVE CLAIM OF CAPITAL GAINS ON 3-3-2006, HE COULD NOT FURNISH A COPY OF INDEX II AS REQUISITIONED BY THE ASSESSING ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 4 - OFFICER. THE SAME WAS CALLED FOR FROM THE BUYER BE VERLY HILLS REALTY PVT. LTD., BY THE ASSESSING OFFICER U/S 133( 6) OF THE ACT. THE INDEX II WAS DATED 15-6-2002 AND THE SAME SHOWE D CONSIDERATION OF THE PARTY AT RS. 2,58,00,000/- WHI LE FAIR MARKET VALUE OR STAMP DUTY PURPOSE WAS ADOPTED AT R S. 2,79,26,125/-. THE ASSESSING OFFICER NOTED THAT AS PER DEVELOPMENT AGREEMENT DATED 15-6-2002 THE AGREED CONSIDERATION WAS STATED AT RS. 2,04,00,000/- WHILE THE SAME WAS APPEARING AT RS. 2,58,00,000/- IN INDEX II REPO RT. WHEN ASKED TO STATE WHETHER THERE WERE ANY OTHER DEVELOP MENT AGREEMENTS, THE ASSESSEE FURNISHED A COPY OF DEVELO PMENT AGREEMENT DATED 15-6-2002, WHICH BORE THE SEAL AND STAMP OF THE REGISTERING AUTHORITY ON EVERY PAGE AND EVEN AS PER CERTIFIED COPY OF THIS AGREEMENT REVEALED AGREED CO NSIDERATION AT RS. 2,04,00,000/-. ACCORDING TO THE ASSESSEE, TH E REGISTERING AUTHORITY HAD INADVERTENTLY PUT THE FIG URE OF RS. 2,58,00,000/- IN THE INDEX II REPORT PROBABLY LOOKI NG TO THE FACT THAT THE ASSESSEE HAD PAID STAMP DUTY OF RS. 2 ,58,000/-. IT WAS POINTED OUT THAT THE ASSESSEE HAD APPLIED TO THE REGISTERING AUTHORITY FOR CORRECTING THEIR RECORDS TO THAT EFFECT. 6. AS REGARDS QUESTION OF APPLICABILITY OF SECTION 50-C FOR ADOPTING DEEMED VALUE OF THE ASSET AT RS. 2,79,26,1 25/- ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 5 - ACCORDING TO THE ASSESSEE, THE SAID SECTION WAS NOT APPLICABLE TO THE FACTS OF THE CASE, AS THE ASSESSEE HAD NOT S OLD ANY LAND OR BUILDING BUT HAD TRANSFERRED DEVELOPMENT RIGHTS. FURTHER, ASSESSEE INSTEAD OF PRESSING THIS, ALTERNATIVELY ST ATED THAT HE HAD OBTAINED A NO OBJECTION CERTIFICATE U/S 269UL(3 ) OF THE ACT FROM THE APPROPRIATE AUTHORITY, FOR THE DEAL AT RS. 2,04,00,000/- UNDER CERTIFICATE NO. PUNE-3694/4564 DATED 18-1-2002 AND SINCE THE APPROPRIATE AUTHORITY HAD A PPROVED THE DEAL AT RS. 2,04,00,000/-. THE PROVISIONS OF SE CTION 50-C COULD NOT BE APPLIED TO THE CASE. THE APPROPRIATE AUTHORITY HAD ALREADY EXAMINED THE ADEQUACY OF THE FAIR MARKE T VALUE AND THEREFORE, HERE WAS NO CASE FOR THE ASSESSING O FFICER TO DISPUTE THE VALUATION FOR THE PURPOSE OF SECTION 50 -C OF THE ACT. 7. ACCORDING TO THE ASSESSING OFFICER, THE ABOVE CO NTENTION OF THE ASSESSEE WAS NOT FOUND MAINTAINABLE SINCE SE CTION 50C HAD BEEN INTRODUCED W.E.F. 1-4-2003 WITH AN ENTIREL Y DIFFERENT INTENT THAN SECTION 269UL, AS SECTION 50-C(1) MANDA TORILY REQUIRED THE ASSESSING OFFICER TO ADOPT THE VALUE A DOPTED BY THE STAMP DUTY AUTHORITY OF THE STATE GOVERNMENT FO R THE PURPOSE OF STAMP DUTY. THE ASSESSING OFFICER HAS N O DISCRETION TO ADOPT THE SALE CONSIDERATION OTHER TH AN THE VALUE ADOPTED BY THE REGISTERING AUTHORITY FOR STAMP DUTY PURPOSES. ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 6 - AS REGARDS THE OBJECTION OF THE ASSESSEE REGARDING APPLICATION OF SECTION 50-C ON THE GROUND OF NO OBJECTION CERTI FICATE OF APPROPRIATE AUTHORITY, THE ASSESSING OFFICER HELD T HAT SUCH CERTIFICATE OF THE APPROPRIATE AUTHORITY WAS MERELY AN APPROVAL FOR THE DEAL PROPOSED BETWEEN THE VENDOR AND VENDEE AND SUCH APPROVAL, WHICH WAS DATED 18-1-2002, HAD NOTHI NG TO DO WITH SECTION 50-C, AS THIS SECTION WAS NOT IN EXIST ENCE AT THAT TIME. ACCORDING TO THE ASSESSING OFFICER, THE ASSE SSEE HAD NOT CLAIMED AND PROVED THAT (A) THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALU ATION AUTHORITY U/S 50(1) EXCEEDED THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAD NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAD BEEN MADE BEFORE ANY AUTHORITY, COURT OR THE HIGH C OURT AND, THEREFORE, IT WAS NOT NECESSARY AT THAT STAGE TO REFER THE MATTER TO THE VALUATION OFFICER. 8. THE ASSESSING OFFICER REJECTED THE OBJECTION OF THE ASSESSEE AND OBSERVED THAT THE VALUATION BY APPROPR IATE AUTHORITY AND THAT TOO IN THE FINANCIAL YEAR 2001-0 2 COULD NOT OVERRIDE THE SPECIFIC PROVISIONS OF SECTION 50C W.E .F. 1-4-2003, ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 7 - WHICH WAS APPLICABLE FOR AND FROM THE ASSESSMENT YE AR 2003- 04. THE ASSESSING OFFICER, THEREFORE, ADOPTED THE V ALUE AT RS.2,79,26,125/- AS ADOPTED BY THE STAMP DUTY AUTHO RITY AS DEEMED CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS. 9. THE MATTER WAS CARRIED IN APPEAL BEFORE THE FIRS T APPELLATE AUTHORITY WHEREIN DETAILED WRITTEN SUBMIS SIONS DATED 7-8-2006 WERE FILED WITH REGARD TO ADOPTION OF STAMP DUTY VALUATION AS THE SALE CONSIDERATION. IN APPEA L, THE CIT(A) AFTER GOING THROUGH THE FACTS OF THE CASE FROM THE ASSESSMENT ORDER AND ALSO FROM THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE, OBSERVED THAT SECTION 50-C WAS BROUG HT ON THE STATUTE BY THE FINANCE ACT, 2002 WITH EFFECT FROM 1 -4-2003. AS THE SECTION IS APPLICABLE WITH EFFECT FROM THE ASSE SSMENT YEAR 2003-04, IT IS TRITE LAW THAT ANY TRANSACTIONS ENTE RED INTO FROM 1-4-2002 TO 31-3-2003 WOULD BE COVERED BY THE ASSES SMENT YEAR 2003-04 AND, THEREFORE, APPLICATION OF SECTION 50-C TO THE TRANSACTIONS ENTERED INTO BY THE APPELLANT ON 15-6- 2001 WAS CORRECTLY MADE BY THE ASSESSING OFFICER. THE EFFECT OF SECTION 5OC(1) OF THE INCOME TAX ACT, 1961 IS THAT IF THE C ONSIDERATION RECEIVED/DECLARED BY THE TRANSFEROR ASSESSEE ON TRA NSFER OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LES S THAN THE ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 8 - VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY VALUATI ON AUTHORITY FOR THE PURPOSE OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF SECTION 48 OF THE INCOME TAX ACT, 1961. SUBSECTION (2) OF SECT ION 5OC OF THE INCOME TAX ACT, 1961 ENJOINS THE ASSESSING OFFI CER TO REFER THE CAPITAL ASSET FOR VALUATION WHERE THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY WAS IN EXCESS OF THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AND THE VALUE SO ADOPTED OR ASSESSED UNDER SUBSECTION ( 1) OF SECTION 50C HAD NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER HIGHER ADMINISTRATIVE OR JUDICIAL AUTHORITY. ON REFERENCE MADE BY THE ASSESSING OFFICER FOR VALUATION, THE APPROPRIATE PR OVISIONS OF SECTIONS 16A, 23A, 24, 34A, 35 AND 37 OF THE WEALTH -TAX ACT, 1957, WITH NECESSARY MODIFICATION WOULD APPLY. SUB SECTION (3) OF SECTION 50C OF THE INCOME TAX ACT, 1961 MAKE S IT CLEAR THAT IF THE VALUE ASCERTAINED BY THE VALUATION OFFI CER EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY VAL UATION AUTHORITY, THEN THE VALUE ADOPTED BY SUCH AUTHORITY SHALL BE TAKEN AS FULL VALUE OF CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF THE TRANSACTION. THE PROVISIONS OF SECTIO N 50C AS ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 9 - ENACTED HAD BEEN EXPLAINED IN THE CIRCULAR NO.8 OF 2002 DATED 27-8-2002 AS UNDER:- IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF SUC H TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION, A ND CAPITAL GAINS SHALL BE COMPUTED ACCORDINGLY UNDER SECTION 48 OF THE INCOME TAX ACT, 1961. IT IS FURTHER PROVIDED THAT WHERE THE ASSESSEE CLAI MS THAT THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOS ES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, AND HE HAS NOT DISPUTED THE VALUE SO ADOPTED OR ASSESSED IN ANY APPEAL OR REVISION OR REFERENCE BEFORE ANY AUTHORITY OR COURT, THE' ASSES SING OFFICER MAY REFER THE VALUATION OF THE RELEVANT ASS ET TO A VALUATION OFFICER IN ACCORDANCE WITH SECTION 55A OF THE INCOME TAX ACT.' IF THE FAIR MARKET VALUE DETERMINE D BY THE VALUATION OFFICER IS LESS THAN THE VALUE ADOPTE D FOR STAMP DUTY PURPOSES, THE ASSESSING OFFICER MAY TAKE SUCH FAIR MARKET VALUE TO BE THE FULL VALUE OF CONSIDERATION. HOWEVER, IF THE FAIR MARKET VALUE DETERMINED BY THE VALUATION OFFICER IS LESS THAN TH E VALUE ADOPTED FOR STAMP DUTY PURPOSES, THE ASSESSING OFFI CER MAY TAKEN SUCH FAIR MARKET VALUE TO BE THE FULL VAL UE OF CONSIDERATION. HOWEVER, IF THE FAIR MARKET VALUE DETERMINED BY THE VALUATION OFFICER IS MORE THAN TH E VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES, THE ASSESSING OFFICER SHALL NOT ADOPT SUCH FAIR MARKET VALUE AND SHALL TAKE THE FULL VALUE OF CONSIDERATION TO B E THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES. THIS AMENDMENT WILL TAKE EFFECT FROM 1 ST APRIL, 2003 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSM ENT YEAR 2003-04 AND SUBSEQUENT YEARS.' 10. ACCORDING TO THE CIT(A) THE UNDERLYING OBJECTIV E OF THE LEGISLATURE, THEREFORE, APPEARS TO BE TO COMPUTE TH E CAPITAL ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 10 - GAINS ON SUCH CAPITAL ASSET ON THE BASIS OF THE FAI R MARKET VALUE OF THE PROPERTY BEING LOWER THAN THE VALUE AD OPTED OR ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY FOR THE PURPOSE OF STAMP DUTY OR THE FAIR MARKET VALUE DETE RMINED BY THE VALUATION OFFICER ON REFERENCE MADE BY THE ASSE SSING OFFICER ON THE BASIS OF ASSESSEE'S CLAIM UNDER SECT ION 50C(2) OF THE INCOME TAX ACT, 1961 AND TO IGNORE THE CONTRACT UAL TRANSACTION VALUE OF . THE TRANSFER OF CAPITAL ASSE T ALTOGETHER WITHOUT GOING INTO THE MERIT WHETHER THE TRANSACTIO N VALUE IS TRULY STATED/DECLARED OR NOT. THEREFORE, FOR THE PU RPOSE OF COMPUTING THE CAPITAL GAINS ARISING FROM TRANSFER O F LAND OR BUILDING OR BOTH, THE DEEMED CONSIDERATION UNDER SE CTION 50C WOULD BE SUBSTITUTED IN PLACE OF THE APPARENT CONSI DERATION OR ACTUAL CONSIDERATION. THE DEPARTMENT DOES NOT NEED TO PROVE THAT THE CONSIDERATION RECEIVED IS MORE THAN WHAT I S STATED IN THE DEED OF TRANSFER. 11. THE CASE OF THE ASSESSEE IS THAT HE HAD OBTAINE D NO OBJECTION CERTIFICATE FROM THE APPROPRIATE AUTHORIT Y ON 18-1- 2002. JUST BECAUSE THE REGISTRATION OF THE PROPERTY HAS BEEN DELAYED WOULD NOT MEAN THAT THEY WOULD BE COVERED B Y SECTION 50C OF THE INCOME TAX ACT, 1961 WHILE THE APPROPRIA TE AUTHORITY HAD ALREADY CLEARED HIS CASE AND THE APPA RENT ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 11 - CONSIDERATION OF RS. 2,04,00,000/- WAS TREATED AS C ORRECT. AS DISCUSSED ABOVE, THIS CONTENTION OF THE ASSESSEE W AS NOT FOUND ACCEPTABLE, AS THE LAW APPLICABLE TO THE TRAN SACTIONS ENTERED INTO IN THE FINANCIAL YEAR. 2002-03 WOULD B E THE LAW APPLICABLE FOR THE ASSESSMENT YEAR 2003-04. HOWEVE R, THE ASSESSEE OBJECTED TO THE APPLICATION OF SECTION 50C TO THIS TRANSACTION VIDE LETTER DATED 3-3-2005. THE CASE WA S NOT REFERRED TO THE VALUATION OFFICER, AS ACCORDING TO THE ASSESSING OFFICER, THE APPROPRIATE AUTHORITY HAD MERELY CERTI FIED ITS NO OBJECTION TO THE DEAL PROPOSED BETWEEN THE VENDOR A ND VENDEE FOR WHICH APPROVAL WAS GRANTED ON 21-8-2002, WHICH HAD NOTHING TO DO WITH SECTION 50C WHICH WAS NOT IN EXI STENCE AT THAT TIME. ACCORDING TO THE ASSESSING OFFICER, AS T HE ASSESSEE HAD NOT CLAIMED AND PROVED THAT THE VALUE ADOPTED O R ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY AS P ER SECTION 50C(1) EXCEEDED THE FAIR MARKET VALUE OF TH E PROPERTY AS ON THE DATE OF TRANSFER AND THE VALUE SO ADOPTED OR ASSESSED HAS NOT BEEN DISPUTED IN ANY APPEAL OR REV ISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY HIGHER AUTHORITI ES. SO, THERE WAS NO NECESSITY THAT THE MATTER BE REFERRED TO THE VALUATION OFFICER AT THIS STAGE. THE VALUATION BY T HE APPROPRIATE AUTHORITY, THAT TOO IN THE FINANCIAL YE AR 2001-02, COULD NOT OVERRIDE THE SPECIFIC PROVISIONS OF SECTI ON 50C OF THE ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 12 - INCOME TAX ACT, 1961 APPLICABLE FROM THE ASSESSMENT YEAR 2003-04 WHICH IS THE YEAR FOR TRANSACTION IN QUESTI ON I.E. 15- 6-2002. 12. THE ABOVE OBSERVATIONS OF THE ASSESSING OFFICE R, DID NOT FOUND FAVOUR WITH THE CIT(A). THE CIT(A) OBSERVED T HAT ONCE THE ASSESSEE HAD OBJECTED TO THE APPLICATION OF SE CTION 50C FOR THE TRANSACTION, THE ASSESSING OFFICER DOES NOT HAV E ANY CHOICE BUT TO REFER THE CASE FOR VALUATION. EVEN TH OUGH, THE WORD USED IN SECTION 50C(2) IS 'MAY', IT HAS TO BE READ AS 'SHALL' OR OTHERWISE, SECTION 50C(2) BECOMES REDUND ANT. THE APPELLANT DOES NOT HAVE TO PROVE THAT THE VALUE ADO PTED OR ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY EXCE EDED THE FAIR MARKET VALUE AS ON THE DATE OF TRANSFER, AS IT WAS OBVIOUS THAT THE VALUE ADOPTED BY THE STAMP DUTY VALUATION AUTHORITY WAS HIGHER AND THE ASSESSING OFFICER HAD ADOPTED TH AT VALUE HIMSELF AS DEEMED CONSIDERATION. THE APPROPRIATE AU THORITY CONSISTS OF TWO COMMISSIONERS OF INCOME TAX AND ONE CHIEF ENGINEER, AS MEMBERS. BEFORE THE CERTIFICATE UNDER SECTION 269UL(3) OF THE INCOME TAX ACT, 1961 IS GIVEN, THE PROPERTY IS VALUED BY THE APPROPRIATE AUTHORITY AND IT IS ONLY WHERE THE APPARENT CONSIDERATION IN FORM37 -I AND IN THE AGRE EMENT FOR TRANSFER OF THE PROPERTY IS CONSIDERED ADEQUATE THA T THE ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 13 - APPROPRIATE AUTHORITY PASSES AN ORDER UNDER SECTION 269UD(1) OF THE INCOME TAX ACT, 1961. IT IS, THEREFORE, OBVI OUS THAT EVEN IF THE CASE WAS REFERRED TO THE DEPARTMENTAL VALUAT ION OFFICER, IT WOULD NOT HAVE SERVED ANY PURPOSE, AS THE VALUAT ION HAD ALREADY BEEN DONE BY THE APPROPRIATE AUTHORITY AND THE SAME VALUATION WOULD HAVE BEEN RETAINED BY THE VALUATION OFFICER NOW AFTER THE CASE WAS REFERRED TO HIM. IN VIEW OF THE ABOVE, AS THE APPELLANT HAD OBJECTED TO THE STAMP DUTY VALUAT ION UNDER SECTION 50C(2) OF THE INCOME TAX ACT, 1961 AND THE ASSESSING OFFICER HAD NOT REFERRED THE MATTER TO THE VALUATIO N OFFICER, THE CIT(A) HAS OBSERVED THAT IT WOULD NOT HAVE SERVED A NY PURPOSE, THE ASSESSING OFFICER WAS NOT COMPETENT TO SUBSTITUTE THE STAMP DUTY VALUATION FOR ACTUAL/DECL ARED CONSIDERATION. SO, THE CIT(A) GRANTED RELIEF ON THI S ACCOUNT. 13. THE REASONED FINDING OF THE CIT(A) NEEDS NO INT ERFERENCE FROM OUR SIDE BECAUSE THE CIT(A) WAS JUSTIFIED IN A LLOWING THE RELIEF OF RS. 75,26,125/- ON ACCOUNT OF LONG TERM C APITAL GAIN O SALE OF LAND AS DISCUSSED ABOVE. THE SAME IS UPHEL D. 14. REGARDING DISALLOWANCE OF CLAIM FOR EXEMPTION U /S 54EC WE FIND THAT EVEN IF THE DATE OF TRANSFER IS TAKEN AS 23-1-2003, THE AMOUNT OF RS. 1,57,00,000/- DEPOSITED IN THE CA PITAL GAIN ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 14 - BONDS ON 29-9-2003 IS BEYOND THE PERIOD OF SIX MONT HS FROM THE DATE OF TRANSFER AND, THEREFORE, NO DEDUCTION U /S 54EC IN ANY CASE IS ALLOWABLE TO THE ASSESSEE ON THIS AMOUN T. FURTHER, THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 1,64,00, 000/- ONLY DURING THE PERIOD 16-4-2002 TO 23-1-2003. THE AMOUNT OF RS. 1,57,00,000/- HAS BEEN DEPOSITED OUT OF THIS AMOUNT OF RS.,64,00,000/- RECEIVED DURING THE YEAR. FURTHER, RS. 40,00,000/- HAD BEEN RECEIVED PRIOR TO 7-11-2001 WH ICH WAS NOT DEPOSITED TILL 10-5-2003 AND, THEREFORE, THIS A MOUNT ALSO LOOSES EXEMPTION BEING BEYOND A PERIOD OF SIX MONTH S. THE AMOUNT OF RS. 47,00,000/- DEPOSITED ON 10-5-2003, I N ANY CASE WAS OUT OF THE AMOUNT RECEIVED PRIOR TO 17-6-2 002 AND THEREFORE, THE ENTIRE AMOUNT OF RS. 47,00,000/- IS NOT ELIGIBLE FOR DEDUCTION U/S 54EC. THIS VIEW IS FORTIFIED BY THE DECISION OF AHMEDABAD SPECIAL BENCH OF THE TRIBUNAL IN THE C ASE OF JYOTINDRA H. SHODHAN VS. ITO (2003) 87 ITD 312 (AHD ((SB). IN VIEW OF ABOVE, THE ORDER OF THE CIT(A) ON THIS P OINT NEEDS NO INTERFERENCE. 15. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS ASSESSEE ARE DISMISSED. ITA NO. 1199 AND 1149/PN/2006 TAJJUDIN SOMJEE A.Y. 2003-04 - 15 - ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST 2011. (D. KARUNAKARA RAO) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 30 TH AUGUST 2011. ANKAM COPY OF ORDER FORWARDED TO : 1. ASSESSEES 2. DEPARTMENT 3. CIT(A) II PUNE 4. CIT - III PUNE 5. ITAT, D.R. B BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE.