K. Mahender Yadav, Hyd, Hyderabad V. ITO, Ward-6(5), Hyd, Hyderabad

ITA 215/HYD/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7168 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 25-02-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHREYA MALLA RAO
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition; Fair market value; Capital Gains
• Section: 54B; 50C; 2(14); 13; 147

Judgement Text

ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO.215/HYD/2016 ASSESSMENT YEAR: 2009-10 SRI K. MAHENDER YADAV HYDERABAD PAN:AAYPK8761E VS. INCOME TAX OFFICER WARD 6(5) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: MS SHREYA FOR MALLA RAO REVENUE BY : SRI SUNIL KUMAR PANDEY,DR DATE OF HEARING: 25/02/2021 DATE OF PRONOUNCEMENT: 06/04/2021 ORDER PER S.S. GODARA, J.M. THIS ASSESSEES APPEAL FOR AY.2009-10 ARISES FROM T HE CIT(A)-6, HYDERABADS ORDER DATED 24.08.2015 PASSED IN APPEAL NO. ITA 1547/20140-15/CIT (A)-VI/15-16, IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE ASSESSEES INST ANT APPEAL SUFFERS FROM 108 DAYS DELAY IN FILING STATED TO BE ATTRIBUTABLE TO VARIOUS MISCELLANEOUS REASONS BEYON D HIS CONTROL WHICH HAS GONE UNREBUTTED FROM THE REVENUES SIDE. T HE SAME STANDS CONTINUED THEREFROM. THE MAIN CASE IS NOW TA KEN UP FOR ADJUDICATION. ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 2 OF 8 3. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIV E GROUNDS IN THE INSTANT APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT (APPEALS) DATED 24-08-2015 FOR THE ASSESSMENT PERIOD 2009-10 IS PARTLY ALLOWED IS NOT CORRECT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) ERRED IN HOLDING THE FULL VAL UE OF CONSIDERATION AT RUPEES THIRTY FIVE LAKHS AS AGAINS T THE SALE CONSIDERATION OF RUPEES TWENTY FIVE LAKHS BY T HE APPELLANT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THAT, TH E APPELLANT FILED RETURNS ALONG WITH COMPUTATION STATEMENTS FOR CLAIM OF CAPITAL GAIN ARE GENUINE. W ITHOUT APPRECIATING THE FACT OF THE CASE, CIT(APPEALS) ALL OWED THE APPEAL PARTLY IS AGAINST THE PRINCIPLES OF NATU RAL JUSTICE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THAT, TH E CLAIM OF THE APPELLANT PER ACRE IS RS.25,00,00/- IS CORRE CT. THUS, CIT (APPEALS) ALLOWED THE APPEAL TO THE EXTEN T OF RS.35,OO,OOO / - PER ACRE IS NOT CORRECT. 5. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE L EANED CIT (APPEALS) FAILED TO APPRECIATE THAT, THE AGRICU LTURE LAND IS NOT USABLE LAND AND IT IS WATER BODY LAND. IT IS DIFFICULT FOR THE CONSTRUCTION OF ANY BUILDING. THU S, THE LAND GOT LESSER VALUE, COMPARED TO SRO VALUE. THUS THE DECLARED VALUE IS ACTUAL SALE CONSIDERATION AMOUNT. THUS, THE CIT(A) ALLOWED THE APPEAL TO THE EXTENT O F RS.35,00,000/- PER ACRE IS NOT CORRECT. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THE FACT OF THE CASE AND FURNISHED RELEVANT DOCUMENTS IN SUPPORT OF THE CLAIM OF APPELLANT. WITHOUT CONSIDERING THE FURNISH ED DOCUMENTS THE CIT APPEALS ALLOWED THE APPEAL PARTLY IS NOT CORRECT. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THAT THE CONSEQUENCES OF INTEREST AND PENALTY MAY NOT SUSTAI NED AND LIABLE TO BE DELETED. 8. WITHOUT PREJUDICE, CONFORMING THE LEVY OF TAX PA RTLY AND LEVIED INTEREST CONFORMED IN THE PARTLY IS EXCE SSIVE AND ARBITRARY AND OUGHT TO HAVE BEEN DELETED SUBSTANTIALLY. ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 3 OF 8 9. FOR SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING AND IT IS PRAYS THAT KINDLY MAY ALLOW TH E APPEAL IN THE INTEREST OF JUSTICE AND EQUITY. 4. COMING TO THE CORRECTNESS OF THE IMPUGNED LTCG ADDITION, WE NOTICE THAT THE CIT (A)S DETAILED DIS CUSSION HAS DEALT WITH THE SAME AS UNDER: '05.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE ALONG WITH SRI K. RAMA SWAMY AND 12 OTHERS HAD JOINTLY SO LD 18 ACRES OF LAND IN SY. NOS. 111, 112 AND 155 AT KOMPA LLY VILLAGE, QUTUBULLAPUR MANDAL, R. R. DIST ON 30.10.2 008 FOR A CONSIDERATION OF RSA,50,00,000/-. THE ASSESSEE COMP UTED LONG TERM CAPITAL GAINS AT RS.52,46,118/- OUT OF HI S SHARE (12.5%) BY TAKING THE INDEX COST OF ACQUISITION AT RS.3,78,882/- AND SALE CONSIDERATION AT RS.56,25,00 0/- AND CLAIMED EXEMPTION U/S.54. AS PER THE INFORMATION RE CEIVED BY THE ASSESSING OFFICER, THE FULL VALUE OF CONSIDERAT ION OF THE PROPERTY ADOPTED BY THE SRO WAS RS.14,76,00,000/-. 05.1 THE ASSESSING OFFICER' WHILE MAKING THE ASSESS MENT NOTED THAT IN THE CASE OF SRI K. RAMASWAMY, ONE OF THE CO- OWNERS OF THE PROPERTY, ASSESSMENT WAS DONE BY ADOP TING THE MARKET VALUE DETERMINED BY THE SRO AS DEEMED SA LE CONSIDERATION U/S 50C OF THE ACT. THE INDEX COST OF ACQUISITION TAKEN AT RS.5,16,240/- WAS ALSO REJECTE D. ON FURTHER APPEAL BY SRI K. RAMASWAMY, THE HON'BLE !TA T VIDE ITS ORDER IN ITA NO.1524/H/2013 DATED 20.08.2014 CONFIRMED THE INDEXED COST OF ACQUISITION ADOPTED B Y THE ASSESSING OFFICER AND DIRECTED THE ASSESSING OFFICE R TO ASCERTAIN THE MARKET VALUE BY MAKING NECESSARY ENQU IRIES BUT DIRECTED THAT THE SAME SHOULD NOT EXCEED THE VA LUATION MADE BY THE DVO. 05.2 THE ASSESSING OFFICER HAD INQUIRIES CONDUCTED AND FOUND THAT THE PREVAILING RATE PER ACRE IN 2008 WAS RS.50,00,000/-. BUT AS THE DVO HAD REPORTED THE VA LUATION AT RS.7,78,21,OOO/-, HE TOOK THE SAME TO BE THE FUL L VALUE ' OF CONSIDERATION AND COMPUTED THE LONG TERM CAPITAL GAINS AT RS.96,63,095/- AS PER SEC 50C OF THE ACT AND RES TRICTED THE EXEMPTION U/S 54B TO RS.14,52,260/-. DECISION: 06.0 COST OF ACQUISITION : THE APPELLANT HAS SHOWN RS.3,78,882/- AS HIS INDEXED COST OF ACQUISITION AN D ASSESSING OFFICER HAS TAKEN THE SAME TO BE RS.5,16, 240/- AND CALCULATED THE ASSESSEE'S SHARE AT RS.64,530/-. EVEN THOUGH THE APPELLANT HAS CHALLENGED THE INDEXED COS T OF ACQUISITION ADOPTED BY THE ASSESSING OFFICER IN APP EAL, HE COULD NOT SUBSTANTIATE HIS CLAIM. ON THE OTHER HAND , IT IS NOTICED THAT THE COST OF ACQUISITION DETERMINED BY THE ASSESSING OFFICER IS IN A SIMILAR FASHION AS IN THE CASE OF ANOTHER CO-OWNER SRI M.K. RAMASWAMY THAT HAD BEEN ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 4 OF 8 UPHELD IN APPEAL BY THE HON'BLE ITAT (SUPRA). IT IS THEREFORE HELD THAT THE COST OF ACQUISITION ADOPTED BY THE AS SESSING OFFICER IS CORRECT. 7.0 FULL VALUE OF CONSIDERATION: THE ASSESSEE ALONG WITH 13 CO-OWNERS ENTERED INTO A REGISTERED AGREEMENT OF SA LE CUM GPA FOR TRANSFER OF 18 ACRES OF LAND SITUATED KOMPA LLY VILLAGE ON 13.10.2008. THE SALE CONSIDERATION AS PE R CONSIDERATION WAS TO BE RSA.50 CRORES WHILE THE VAL UE ADOPTED FOR STAMP DUTY PURPOSES WAS RS.14.16 CRORES . THE APPELLANT REPORTED THE LONG TERM CAPITAL GAINS IN T HE RETURN OF INCOME FURNISHED FOR A.Y. 2009-10 BUT ADOPTED TH E FULL VALUE OF CONSIDERATION AT RSA.50 CRORES AND HIS SHA RE THEREIN AT RS.56.25 LAKHS. ASSESSING OFFICER INITIATED PROC EEDING U/S 147 OF THE ACT ON THE BASIS OF THE REASONING THAT F ULL VALUE OF CONSIDERATION AS PER PROVISIONS OF SEC 50C OF THE A CT SHOULD HAVE BEEN ADOPTED AT RS.14.76 CRORES. IN COURSE OF ASSESSMENT, HOWEVER, HE OBSERVED THAT IN THE CASE O F ANOTHER CO-OWNER. SRI M.K. RAMASWAMY, REFERENCE HA D BEEN MADE TO THE DVO FOR VALUATION OF THE SAME PLOT AND THE FAIR MARKET VALUE HAD BEEN VALUED AT RS.7. 78 CRORES BY THE LATTER. HE ALSO NOTED THAT IN THE CASE OF SRI M.K. RAMASWAMY, THE HON'BLE ITAT VIDE ITS ORDER NO. 1524/H/013 DATED 20.08.2014, HAD REMITTED THE ISSUE OF FULL VALUE OF CONSIDERATION THE ASSESSING OFFICER W ITH A DIRECTION TO DETERMINE IT AFRESH AFTER CONSIDERING THE REPORTS OF THE REGISTERED VALUER (SUBMITTED BY THE ASSESSEE ), OR THE DVO AND ANY OTHER RELEVANT MATERIAL. AFTER CONSIDER ING THE MATERIAL AVAILABLE ON RECORD, IN THIS CASE AS WELL AS THE IN THE CASE OF SRI M.K. RAMASWAMY, THE ASSESSING OFFICER DETERMINED THE FULL VALUE OF CONSIDERATION AT RS.7. 78 CRORES. HE ALSO OBSERVED THAT AS PER THE MARKET ENQUIRY, TH E FAIR MARKET VALUATION OF THE PROPERTY WAS LEARNT TO BE R S.9 CRORES. THUS, HE ADOPTED THE ASSESSEE'S 12.5% SHARE IN THE FULL VALUE OF CONSIDERATION OF THE PROPERTY AT RS.97,27, 625/-. 07.1 IN APPEAL, THE ASSESSEE HAS CHALLENGED THIS VA LUATION. HIS CONTENTION IN SUPPORT OF HIS VALUATION IS SUMMA RISED BELOW: THE LAND WAS A PART OF A WATER BODY FAK SAGAR LAKE AND WAS NOT FIT FOR AGRICULTURE. NO DEVELOPMENT WAS POS SIBLE. THERE WAS FAMILY LITIGATION IN THE PAST LEADING TO DISTRESS SALE. THE MOU WAS ENTERED ON 01.11.2007 AND PART OF THE CONSIDERATION AMOUNTING TO NEARLY RS. 1 CRORES WAS RECEIVED' BEFORE THE AGREEMENT OF SALE WAS MADE BY WAY OF ACC OUNT PAYEE CHEQUES. POSSESSION HAD BEEN GIVEN TO THE INT ENDING PURCHASERS WHILE SIGNING THE MOU. IN VIEW OF THIS, IT WAS ALSO SUBMITTED THAT THE TRA NSFER SHOULD BE TAKEN TO HAVE BEEN EFFECTED IN PREVIOUS YEAR REL EVANT TO A.Y. 2008-09 ONLY. FURTHER, SINCE STAMP DUTY WAS NO T PAID IN THAT YEAR, THE PROVISION OF SEC.50C WOULD ALSO NOT APPLY WHILE COMPUTING LONG TERM CAPITAL GAINS FOR A.Y. 20 08-09. ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 5 OF 8 07.2 THE SUBMISSION OF THE APPELLANT HAS BEEN CONSI DERED. THE CONTENTION THAT THE PROPERTY WAS TRANSFERRED IN THE PREVIOUS YEAR RELEVANT TO A.Y.2008-09 AND HENCE CAP ITAL GAINS ACCRUED IS NOT ACCEPTABLE FOR THE FOLLOWING R EASONS: (A) APPELLANT HIMSELF HAD SHOWN THE TRANSFER AND T HE RESULTANT CAPITAL GAINS IN THE RETURN OF INCOME FOR A.Y. 2009- 10, (B) NO AGREEMENT FOR SALE HAD BEEN ENTERED DURING F .Y. 2007- 08. ONLY AN M.OU HAD BEEN SIGNED. OFF COURSE, PART CONSIDERATION IN PURSUANCE TO MOU HAD BEEN RECEIVED AND POSSESSION WAS MENTIONED TO HAVE BEEN GIVEN. THIS C ANNOT BE CALLED GIVING OF POSSESSION IN PART PERFORMANCE OF A CONTRACT REFERRED TO IN SEC 53 OF TRANSFER OF PROPE RTY ACT. THE MOU WAS UNREGISTERED. THE REGISTERED AGREEMENTS OF SALE WERE ONLY ENTERED IN F.Y. 2008-09. THE FOLLOWING HA S ALSO BEEN MENTIONED IN CLAUSE 2 OF THE AGREEMENT OF SALE . 'THE VENDORS/EXECUTANTS AFTER RECEIVING THE ENTIRE SALE CONSIDERATION/ TODAY DELIVERED PHYSICAL POSSESSION OF THE SCHEDULED PROPERTY TO THE VENDEES/CLAIMANTS'. 07.3 IT IS THEREFORE CLEAR THAT THERE WAS NEITHER A N AGREEMENT NOR TRANSFER OF POSSESSION AND HENCE NO DEEMED TRAN SFER OF CAPITAL ASSET AND ANY CAPITAL GAINS FOR A.Y. 2008-0 9. THE SAME TRANSACTION WAS CONSIDERED BY THE ITAT IN THE CASE OF SRI K. RAMASWAMY (SUPRA) AND AFTER CONSIDERATION OF THE BACKGROUND OF THE SAME, THE CAPITAL GAINS WERE HELD TO BE CHARGEABLE TO TAX IN A.Y. 2009-10. 07.4 COMING TO THE QUANTUM OF FULL VALUE OF CONSIDE RATION, THE ASSESSING OFFICER HAS ADOPTED THE FAIR MARKET VALUE DETERMINED BY THE OVO WHICH IS MUCH BELOW THE SRO V ALUE. THE DVO CONSIDERED THE ASSESSEE'S OBJECTIONS AND DETERMINED THE VALUE MUCH BELOW THE SRO VALUE AND A LLOWED FURTHER DISCOUNT OF 5%. HE ADOPTED THE FMV AT RS.43 .42 LAKHS PER ACRE. BUT IT IS ALSO TRUE THAT THE MOU HA D BEEN ENTERED ON 01.11.2007 AND PART CONSIDERATION HAD BE EN RECEIVED ON AND AFTER THAT DATE. EVEN THOUGH TRANSF ER CANNOT BE SAID TO HAVE TAKEN PLACE ON THAT DATE, IT COULD BE ARGUED THAT CONSIDERATION WOULD HAVE BEEN FIXED THEN. THE DVO IN HIS REPORT NOTED THAT THE SRO VALUE AS ON 01.01.200 7 WAS RS.35 LAKHS PER ACRE AND AS ON 01.01.2008, IT WAS R S.60 LAKHS PER ACRE. IF THE TRANSFER HAD TAKEN PLACE ON 01.11.2007, THE SRO VALUE WOULD HAVE BEEN RS.35 LAK HS PER ACRE. COR;1SIDERING THAT TRANSFER DID NOT TAKE PLAC E, BUT THE VALUE HAD BEEN DETERMINED AND ALSO CONSIDERING THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE APPELLANT WAS EN TITLED TO ADDITIONAL CONSIDERATION FOR DELAY IN REGISTRATION OF PROPERTY, IT WOULD BE APPROPRIATE TO HOLD THE SRO VALUE AS ON 01.11.2007 AS THE FAIR MARKET VALUE OF THE PROPERTY IN THE GIVEN CIRCUMSTANCES. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES DISCUSSED ABOVE, IT WOULD BE REASONAB LE TO HOLD THE FULL VALUE OF CONSIDERATION OF THE PROPERT Y AT RS.35 ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 6 OF 8 LAKHS AS AGAINST RS.25 LAKHS SHOWN BY THE APPELLANT AND RS.43.42 LAKHS ASSESSED BY THE ASSESSING OFFICER. 07.5 NO DOUBT, THE SRO VALUE WENT UP SUBSTANTIALLY BETWEEN THE DATE OF AGREEMENT AND THE DATE OF REGISTERED AG REEMENT. BUT, THERE IS NOTHING ON RECORD TO SHOW THAT THE AS SEESSEE WAS ENTITLED TO ADDITIONAL CONSIDERATION OVER AND A BOVE WHAT WAS DUE TO HIM AT THE TIME OF MOU, THE GENUINENESS OF THE MOU IS NOT QUESTIONABLE BECAUSE SUBSTANTIAL PART OF PAYMENTS WERE RECEIVED BY WAY OF ACCOUNT PAYEE CHEQ UES THE DETAILS OF WHICH ARE AVAILABLE ON RECORD. 8.0 EXEMPTION U/S 54F: THE ASSESSEE HAD CLAIMED EXEMPTION OF CAPITAL GAINS TO THE TUNE OF RS.39.60 LAKHS. THE ASSESSING OFFICER ALLOW ED EXEMPTION FOR RS.14.52 LAKHS. EVEN THOUGH DEDUCTION OF QUANTUM OF EXEMPTION WAS ONE OF THE GROUNDS OF APPE AL, THE GROUND WAS NOT PRESSED AT THE TIME OF HEARING. HENC E, THE ASSESSING OFFICER'S ACTION IS FINAL. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THERE IS HARDLY ANY DISPUTE THAT THE I MPUGNED LTCG HAVE EMANATED FROM THE TRANSFER OF ALLEGED CAPITAL ASSET DATED 30.10.2009 IN THE RELEVANT PREVIOUS YEAR. WE NOTICE IN THIS FACTUAL BACKDROP THAT THE VERY ISSUE HAD COME UP BE FORE TRIBUNALS COORDINATE BENCH IN ITA NO.1524 TO 1526/ H/2013 DATED 20.08.2014 IN THE CASE OF ASSESSEES CO-OWNER S S/SH. K. RAMASWAMY AND ORS. WHICH STOOD RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER VIDE FOLLOWING DIRECTIONS: 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. AT THE OUTSET, WE MAY OBSERVE THAT THERE IS NO DISPUTE TO THE FACT THAT LAND SOLD IS A CAPITAL ASSET AS DEFINED U/S 2(14) OF THE ACT. THOUGH, THE ASSESSEE HAS DISCLOSED THE TOTAL CONSIDERATION RECEIVED ON SALE OF PROPERTY BY ALL THE COOWNERS AT RS. 4,50,00,000/- BUT THE REGISTERING A UTHORITY HAS VALUED THE PROPERTY FOR STAMP DUTY PURPOSE AT RS. 14,76,00,000 /-. THEREFORE, UNDERSTATEMENT IN SALE VALUE IN TERMS OF SECTION 50 C(1) IS PRIMA-FACIE ESTABLISHED. HOWEVER, AS REVEALED FROM FACTS ON REC ORD, CONSIDERING THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST ADOPTION OF SRO VALUE, THE AO IN TERMS WITH SECTION 50C(2) DID REFER THE VALUATION O F THE PROPERTY TO THE DVO. IT IS ALSO A FACT THAT DVO SUBMITTED A REPORT TO THE AO ON 25/10/2012 BY DETERMINING THE VALUE OF THE PROPERTY AT RS. 7,93,80,483 BY ESTIMATING THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF REGISTRATION AT RS. 43.41 LAKH PER ACRE. SURPRISING LY, THE AO IGNORING THE STATUTORY MANDATE AS CONTAINED U/S 50C(2) AND (3) C OMPLETED THE ASSESSMENT ON THE VERY SAME DAY HE REFERRED THE VAL UATION TO THE DVO BY ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 7 OF 8 ADOPTING THE VALUE OF PROPERTY AT RS. 14.76 CRORES AS DETERMINED BY THE SRO FOR STAMP DUTY PURPOSE. IN OUR VIEW, AO'S ACTIO N CANNOT BE APPROVED. WHEN THE ASSESSEE HAS OBJECTED TO THE SRO VALUE AND THE VALUATION OF THE PROPERTY HAS BEEN REFERRED TO THE DVO, THE AO IS DU TY BOUND TO TAKE INTO ACCOUNT THE VALUATION MADE BY THE DVO AND THEREAFTE R COMPUTE THE CAPITAL GAIN IN TERMS WITH SECTION 50C(3). UNFORTUNATELY, T HOUGH THE CIT(A) WAS AWARE OF THE AFORESAID FACTUAL POSITION, SHE HAS CO NFIRMED THE ASSESSMENT BY MISINTERPRETING THE PROVISIONS CONTAINED U/S 50C . A PLAIN READING OF SECTION 50C WOULD MAKE IT CLEAR THAT THOUGH SUB-SEC TION (1) POSTULATES ADOPTION OF SRO ITA NO. 1524 TO 1526/HYD/2013 K. RA MA SWAMY AND OTHERS VALUE WHERE THE CONSIDERATION SHOWN BY THE A SSESSEE IS LESS BUT SUB- SECTION (2) CARVES OUT AN EXCEPTION BY PROVIDING TH AT IF THE ASSESSEE OBJECTS TO THE SRO VALUE AND HE HAS NOT DISPUTED THE SRO VA LUE BEFORE ANY AUTHORITY OR COURT, THEN THE AO MAY REFER THE VALUA TION TO VALUATION OFFICER. SUB-SECTION (3) PROVIDES THAT IF THE VALUA TION MADE BY THE DVO EXCEEDS THE SRO VALUE THEN AO SHALL ADOPT THE SRO V ALUE. CBDT CIRCULAR NO. 8/2002, DT. 27/08/2002 HAS CLARIFIED THE ISSUE FURTHER BY STATING THAT WHERE VALUE DETERMINED BY THE DVO IS LESS THAN SRO VALUE, THE AO HAS TO ADOPT THE DVO VALUE. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT ASSESSEE HAS COMPLIED TO THE PROVISIONS OF SECTION 50C(2) AN D AO HAS REFERRED THE VALUATION TO DVO. HENCE, ADOPTION OF SRO VALUE BY C OMPLETELY IGNORING THE VALUATION MADE BY THE DVO, IN OUR VIEW, IS TOTA LLY WRONG AND IN VIOLATION OF STATUTORY MANDATE OF SECTION 50C. IN T HE AFORESAID CIRCUMSTANCES, VALUE DETERMINED BY SRO CANNOT BE CO NSIDERED AS THE FAIR MARKET VALUE OF THE PROPERTY FOR COMPUTATION OF CAP ITAL GAIN. HAVING HELD SO, WE WILL NOW DEAL WITH ASSESSEE'S OBJECTION EVEN IN RESPECT OF VALUE DETERMINED BY DVO, WHICH BROADLY ARE AS UNDER: I) THE PROPERTY IS WITHIN A WATER BODY AND WAS USED FOR AGRICULTURAL PURPOSE. HENCE, IT WILL NOT BE COMPARED THE VALUE A DOPTED BY SRO FOR STAMP DUTY PURPOSE. II) GUIDELINE VALUE OF SRO HAS NO SANCTITY OF LAW, THEREFORE, CANNOT BE CONSIDERED AS FAIR MARKET VALUE. III) REGISTERED VALUER HAVING DETERMINED THE VALUE AT RS. 26.50 LAKHS PER ACRE AND THERE BEING NO EVIDENCE BEFORE THE DEPARTM ENT THAT ASSESSEE RECEIVED MORE THAN THE CONSIDERATION SHOWN IN THE S ALE DEED, AMOUNT DISCLOSED BY ASSESSEE SHOULD BE ACCEPTED. IV) EVEN AS PER THE SRO GUIDELINE THE VALUE OF THE PROPERTY IN SAME SURVEY NO. AS ON 01/01/2007 BEING RS. 35 LAKHS PER ACRE, S AME SHOULD BE ADOPTED. 10. HOWEVER, IN OUR VIEW, SECTION 50C BEING A DEEMI NG PROVISION, ASSESSEE IS REQUIRED TO ESTABLISH THAT SALE CONSIDERATION SH OWN BY HIM IS THE ACTUAL FAIR MARKET VALUE AS ON THE DATE OF EXECUTION OF AG REEMENT OF SALE CUM GPA ON 30/10/2008. ON A PERUSAL OF REGISTERED VALUE R'S REPORT, A COPY OF WHICH IS AT PAGE 4 OF ASSESSEE'S PAPER BOOK, SHOWS THAT VALUE OF RS. 26.50 LAKH PER ACRE ADOPTED BY HIM IS PURELY ON ESTIMATE BASIS WITHOUT SUPPORTED BY ANY EVIDENCE. SIMILARLY, DVO'S VALUATION AT RS. 43.41 LAKHS PER ACRE IS ALSO ON ESTIMATE ONLY. NEITHER THE ASSESSEE NOR THE DEPARTMENT HAS BROUGHT ANY SUBSTANTIVE EVIDENCE ON RECORD TO JUSTIFY THE V ALUE ADOPTED BY THEM. IN THESE CIRCUMSTANCES, WE ARE LEFT WITH NO OTHER OPTI ONS BUT TO REMIT THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH AFTER MAKING NECESSARY ENQUIRY FOR ASCERTAINING THE FAIR MARKET VALUE OF THE PROPERTY AND EXAMINING ALL MATERIALS ON RECORD. STILL, IF TH ERE ARE NO EVIDENCE TO INDICATE THE ACTUAL FAIR MARKET VALUE OF THE PROPER TY AS ON THE RELEVANT DATE ITA NO 215 OF 2016 K MAHENDER YADAV HYDERABAD PAGE 8 OF 8 THEN THE AO MAY ESTIMATE THE FAIR MARKET VALUE OF T HE ASSET REASONABLY BY TAKING INTO CONSIDERATION ASSESSEE'S SUBMISSIONS. H OWEVER, WE MAKE IT CLEAR THAT IN NO CASE THE FMV SHOULD EXCEED THE VAL UATION MADE BY THE DVO. THE AO MUST AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. 6. THE ASSESSEES ONLY CASE BEFORE US IS THAT THE S AID ASSESSEES HAVE FILED APPEALS BEFORE THE HON'BLE JUR ISDICTIONAL HIGH COURT AND THE SAME ARE PENDING. WE SEE NO REASON TO ADOPT A DIFFERENT APPROACH JUST BECAUSE THE SAID CO-OWNERS TAX APPEALS ARE PENDING BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT. MORE SO WHEN THE LEARNED COORDINATE BENCH HAS ALREADY RESTO RED THE ISSUE AS TO WHETHER THE LAND IS A CAPITAL ASSET BACK TO THE FILE OF THE ASSESSING OFFICER WITH SPECIFIC DIRECTIONS. WE, THE REFORE, ADOPT JUDICIAL CONSISTENCY AND DIRECT THE ASSESSING OFFIC ER TO DECIDE THE ASSESSEES INSTANT GRIEVANCE AFRESH IN THE LIGHT OF THE ABOVE STATED DIRECTIONS AS PER LAW. 7. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. 8. THIS ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER HYDERABAD, DATED 6 TH APRIL, 2021. VINODAN/SPS COPY TO: 1 SRI K. MAHENDER YADAV S/O LATE K. SHANKAR YADAV, 8.3/165/B/2/1 GOKUL COMPOUND ERRAGADDA HYDERABAD 50 0018 2 ITO WARD 6(5) IT TOWERS, AC GUARDS, HYDERABAD 3 CIT (A)-VI HYDERABAD 4 PR. CIT VI HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER