Appeal Details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 0112 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-06-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
23-06-2020
Assessment Year
2016-2017
Appeal Filed On
09-01-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH ES : B , BANGALORE BEFORE SHRI N.V.VASUDEVAN, VICE PRESIDENT AND SHRI B.R.BASK A RAN, ACCOUNTANT MEMBER ITA NO . 2 3 (BANG)/ 20 20 ( ASSESSMENT YEAR : 20 1 6 - 17 ) MS. BENEDICTA MARY MENDONCE, FLAT NO.S1(2A), SKAV AKASA, NO.43, DAVIS ROAD, RICHARDS TOWN, BANGALORE - 560 084 PAN NO. A A TPM9442M APPELLANT VS THE INCOME T AX OFFICER , WARD - 3(3)(3), BANGALORE RESPONDENT APPELLANT BY : SH RI SIDDESH GADDI, CA REVENUE BY : SH RI PRIYADARSHI MISRA, J CIT DA TE OF HEARING : 23 - 0 6 - 20 20 DATE OF PRONOUNCEMENT : 26 - 06 - 2020 O R D E R PER N.V.VASUDEVAN, VICE PRESIDENT TH IS IS AN APPEAL BY THE A S SESSEE AGAINST THE ORDER DATED 14 - 11 - 2019 OF THE LD.CIT(A) - 3, BANGALORE RELATING TO ASSESSMENT YEAR : 20 1 6 - 17. 2. THE A SSESSEE IS AN INDIVIDUAL. SHE IS A RETIRED EMPLOYEE IN THE ACCOUNTANT GEN E RAL OFFICE, KARNATAKA. DURING THE PREVIOUS YEAR THE A SSES S EE SOLD PROPERTY BEARING DOOR NO. 9(OLD SITE NO.20) THIMMA REDDY COLONY, KODIHALLI VILLAGE, VARTHUR HOBLI, BANGALORE SOUTH TALUK , (HEREINAFTER REFERRED TO AS THE PROPERTY) UNDER A SALE DEED DATED 08 - 04 - 2015. THE SALE CONSIDERATION AS PER SALE DEED THAT WAS RECEIVED BY THE A SS ESSEE WAS A SUM OF RS. 1.30 CRORES . THE VALUE OF THE PROPERTY FOR THE PURPOSE O F STAMP DUTY WAS A SUM OF RS.2,09,10,000/ - . THE AO WAS OF THE VIEW THA T THE CAPITAL GAIN HAD TO BE 2 ITA NO.23(B)/2020 COMPUTED BY SUBSTITUTING THE FULLM VALUE OF CONSIDERATION RECEIVED ON TRANSFER BY THE VALUE ADOPTED BY THE STATE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY BECAUSE THE VALUE SO ADOPTED BY STATE GOVERNMENT WAS HIGHER THAN THE FULL VALUE OF CONSIDERATION RECEIVED BY THE A SSESSEE ON SALE OF THE PROPERTY. THE AO ACCORDINGLY, BROUGHT A SUM OF RS.79,10,000/ - (RS.2,09,10,000 = 1,30,000 .00 / - ) AS LONG TERM CAPITAL GAINS (LTCG) . 3 . THE ACTION OF THE AO WAS BASED ON THE PROVISIONS OF SEC .50C OF THE I NCOME T AX ACT, 1961 (ACT) . THE PROVISIONS OF SEC.50C OF THE ACT, READS AS UNDER; SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYME NT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER : PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER: 75A [PROVIDED ALSO THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED ONE HUNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANS FER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. ] (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB - SECTION (1), WHERE 3 ITA NO.23(B)/2020 ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION 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 BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) HAS NOT BEEN 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 THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I ) OF SUB - SECTION ( 1) AND SUB - SECTIONS (6) AND (7) OF SECTION 23A, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELAT ION TO A REFERENCE MADE BY THE ASSESSING OFFICER 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 ( R ) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (2 7 OF 1957). EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTE D OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB - SECTION (2), WHERE THE VALUE ASCERTAINED UNDER SUB - SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB - SECTION (1), THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. 4 . IN THE ORDER OF ASSESSMENT DATED 28.12,.2018 , THE AO ALSO MADE OBSERVATION IN THE FORM OF A NOTE TO THE ASSESSMENT ORDER THAT HIS ORDER OF ASSESSMENT WILL BE SUBJECT TO REVIEW OR RECTIFICATION ON RECEIPT OF VALUATION REPORT FROM THE DISTRICT VALUATION OFFICER (D VO) , BANGALORE. 4 ITA NO.23(B)/2020 5 . AGGRIE VED BY THE ORDER OF THE AO DATED 28 - 12 - 201 8, TH E A SSESSEE FILED APPEAL BEFORE THE LD. CIT(A) ON 24 - 01 - 2019. PENDING DISPOSAL OF THE APPEAL, THE DVO TO WHOM THE AO HAD MADE A REFERENCE U/S 50C(2) OF THE ACT FOR VALUATION OF THE PROPERTY GAVE A REPORT DATED 09 - 05 - 2019 IN WHICH THE PROPERTY WAS VALUED AT A SUM OF RS.1,59, 31,000/ - . BASED ON THE AFORESAID REPORT OF THE DVO, T HE A SSESSEE CONTENDED BEFORE THE CIT(A), THAT THE VALUATION DONE BY THE DVO WAS EXCESS IVE A S HE HAS NOT TAKEN NOTE OF THE EXACT LOCATION OF THE PROPERTY AND OTHER FACTORS THAT WOULD AFFECT THE VALUATION OF THE PROPERTY. THE A SSESSEE ALSO FILED A REGISTERED VALUERS REPORT DATED 09 - 04 - 2019 MENTIONING THE VALUE OF PROPERTY AT R S. 1,33,95,800/ - AND SUBMITTED THAT THE REGISTERED VALUERS REPORT SHOULD BE ACCEPTED. WITHOUT PRE JUDICE TO THE ABOVE SUBMISSION A SSESSEE SUBMITTED THE VALUE ADOPTED BY THE DVO SHOULD BE ADOPTED IN PLACE OF VALUE ADOPTE D BY THE REGISTERING AUTHORITIES FOR THE PURPOSE OF STAMP DUTY. THE ASSESSEE ALSO BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE PURCHASER OF THE PROPERTY HAD DISPUTED THE VALUATION OF THE PROPERTY BY THE STATE GOVERNMENT AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY BY SUBMITTING A LETTER DATED 26 - 02 - 2019 TO THE INSPECTOR GENERAL OF REGISTRATION AND CONTROLLER OF STAMPS. 6 . THE LD. CIT(A) AFTER NOTI CING SEVERAL OBJECTIONS OF THE A SSESSEE NOTED THAT THE DVOS REPORT WAS NOT AVAILABLE AT THE TIME OF ASSESSMENT PROCEEDINGS. HE ALSO NOTICED THAT THE PURCHASER OF THE PROPERTY FROM THE A SSESSEE HAD DISPUTED THE V ALUATION ADOPTED BY THE REGISTERING AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY. THE LD. CIT(A) WAS OF THE VIEW THAT AS PER THE PROVISIONS OF SEC.50C(2) (B) OF THE ACT , REFERENCE TO THE VALUATION BY THE AO TO THE DVO CAN BE MADE ONLY WHEN THE STAMP DUTY VALUATION HAD NOT BEEN DISPUTED IN APPEAL BEFORE THE CONCERNED AUTHORITIES . S INCE THE BUYER OF TH E PROPERTY F R OM THE A SSESSEE HAD DISPUTED THE VALUATION TH ERER COULD NOT HAVE BEEN A VALID REFER ENCE TO THE DVO BY THE A O U/S 50C(2) OF THE ACT AND THEREFORE, THE REPORT OF THE DVO SHOULD ALSO BE IGNORED. THE CIT(A) FOUND NO MERIT REGARDING THE OTHER CONT ENTIONS OF THE AO AND NO OTHER GROUND S TO INTERFERE WITH THE ORDER OF THE AO AND ACCORDINGLY CONFIRMED THE ORD E R O F AO. 5 ITA NO.23(B)/2020 7 . A GGRIEVED BY THE ORDER OF THE LD.CIT(A) THE A SSESS E E HAD PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE ONLY GROUND THAT WAS PRESSED FOR ADJUDICATION BEFORE US WAS WITH REGARD TO THE ACTION OF THE AO IN NOT ADOPTING THE VALUE AS DETERMINED BY THE D V O NAMELY , A SUM OF RS.1,59,31,000/ - AS A FULL VALU E OF CONSIDERATION RECEIVED ON TRANSFER OF PROPERTY FOR THE PURPO S E OF COMPUTING THE LONG TERM CAPITAL GAINS. 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS. WE NOTICE THAT THE ONLY REASON ASSIGNED BY THE LD.CIT(A) IN PARA - 4.10 OF HIS ORDER IS THAT THE PURCHASER OF THE PROPERTY HAD DISPUTED THE VALUATION OF THE PROPERTY BY THE ST ATE GOVERNMENT AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY BY SUBMITTING A LETTER DATED 26 - 02 - 2019 TO THE INSPECTOR GENERAL OF REGISTRATION AND CONTROLLER OF STAMPS. S ECTION 50C(2) OF THE IT ACT, 1961 EMPOWERS THE AO TO MAKE A REFERENCE TO THE DVO FOR VALUATION OF THE PROPERTY WHERE THE PROVISIONS OF SEC.50C(1) OF THE ACT ARE ATTRACTED. IT IS NO DOUBT TRUE THAT U/S 50C(2) OF THE ACT, UNDER CLAUSE - (A) AND CLAUSE (B) THE CONDITION PRECEDENT FOR MAKING A REFERENCE TO THE DVO BY THE AO IS THAT THE A SSESSEE SHOULD CLAIM THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITIES WAS MORE THAN THE FAIR MARKET VALUE OF THE PROPERTY AND THE VALUE ADOPTED BY THE REGISTERING AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY S HOULD NOT HAVE BEEN DISPUTED IN APPEAL BEFORE ANY AUTHORITIES , C OURT ETC. THE FACT THAT THE PURCHASER OF THE PROPERTY FILED A LETTER BEFORE THE INSPECTOR GENERAL OF REGISTRATION AND CONTROLLER OF STAMPS , W OULD NOT BE SUFFICIENT TO CONCLUDE THAT THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY BY THE REGISTERING AUTHORITIES HA D BEEN DISPUTED IN AN APPEAL REVISION BEFORE AN AUTHORITY AS CONTEMPLATED UNDER SEC.50C(2)(B) OF THE ACT. APART FROM THE ABOVE THE AO MADE REFERENCE TO THE DVO BEFORE CONCLUSION OF THE ASSESSMENT PROCEEDINGS I.E., BEFORE 2 8.12.2018 ON WHICH DATE HE PASSED THE ORDER OF ASSESSMENT. THE LETTER OF THE PURCHASER OF THE PROPERTY TO THE INSPECTOR GENERAL OF REGISTRATION AND CONTROLLER OF STAMPS IS DATED 26.2.2019 WHICH IS AFTER THE DATE OF REFERENCE TO DVO BY THE AO. THUS AS ON THE DATE ON WHICH THE AO REFERRED THE QUESTION OF VALUATION OF THE PROPERTY TO THE DVO, 6 ITA NO.23(B)/2020 THERE WAS NO BAR IN TERMS OF SEC.50C(2)(B) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE VALUATION REPORT GIVEN BY THE DVO CANNOT BE IGNORED . S INCE THE DVO HIMSELF VALUED THE PROPERTY AT A SUM OF RS.1,59,31,000/ - WHICH IS LESS THAN THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION, THE SAME SHOULD BE ADOPTED FOR THE PURPOSE OF DETERMINING THE FULL VALUE OF CONSIDERATION RECEIV ED ON TRANSFER OF CAPITAL ASSET FOR COMPUTING LTCG AS LAID DOWN IN SEC.50C(3) OF THE ACT. WE HOLD AND DIRECT ACCORDINGLY. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P A RTLY ALLOWED. ORDER P RONOUNCED ON 26 - 06 - 2020 SD/ - SD/ - (B.R.BASKARAN) (N.V.VASUDEVAN) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 26 - 06 - 2020 * AM C OPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6 .GUARD FILE BY ORDE R ASST. REGISTRAR
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Expert Summary
During the year under consideration, the assessee had sold property for a sum of Rs. 1.3 crores. The AO observed that the value of the property for the purpose of stamp duty was Rs. 2,09,10,000/- and therefore made an addition of Rs. 79,10,100/- as long-term capital gain after requesting valuation from the DVO. The assessment order was subject to rectification on receipt of the valuation report from the DVO. The assessee filed an appeal before the CIT(A). Thereafter, the valuation report was received from the DVO, who valued the property at Rs. 1,59,31,000/-. However, the assessee filed the registered valuer’s report, which valued the property at Rs. 1,33,95,800/-, and contended that the registered valuer’s report should be accepted. As per section 50C(2)(b), reference to valuation by the AO to the DVO can be made only when the stamp duty valuation has not been disputed in appeal before the concerned authorities. The assessee therefore contended that the purchaser of the property had disputed the valuation before the Inspector General of Registration and Controller of Stamps and so the valuation made by the registered valuer must be adopted and not that of the DVO. The Ld. CIT(A) held that since no valid reference could be made to the DVO by the AO u/s 50C(2), the value taken by the AO in the assessment order stands confirmed. The assessee then preferred an appeal before the Tribunal, and the Hon’ble Tribunal held that the fact that the purchaser of the property filed a letter before the Inspector General of Registration and Controller of Stamps would not be sufficient to conclude that the value adopted for stamp duty purposes had been disputed under section 50C(2)(b). Thus, the valuation report by the DVO cannot be ignored, and therefore long-term capital gain should be calculated taking Rs. 1,59,31,000/- as the full value of consideration.
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