SMT RAJESH DEVI, Jaipur V. ITO, JHUNJHUNU

ITA 353/JPR/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4848 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH CIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value; Valuation report
• Section: 50C; 147; 37; 144; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, 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. 353/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 RAJESH DEVI, W/O- SHRI MAHESH SAINI, GHOOM CHAKAR, NAWALGARH. CUKE VS. I.T.O., WARD- 1, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AMPPS 6062 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDE NT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJENDRA SINGH (ADDL.CIT) LQUOKBZ DH RKJH[K @ DATE OF HEARING : 07/12/2016 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/12/2016 VKNS'K@ ORDER PER: KUL BHARAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISES AGAI NST THE ORDER DATED 04/01/2013 PASSED BY THE LD. CIT(A)-III, JAIPU R PERTAINING TO THE A.Y. 2006-07, WHEREIN THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-III HAS ERRED IN SUSTAINING LONG TERM CAPITAL GAIN IN VIEW OF PROVISION OF SECTION 50C OF IT ITA 353/JP/2013_ RAJESH DEVI VS ITO 2 ACT, 1961 OF RS. 33,18,237/- WITHOUT ANY BASIS AND NOT JUSTIFIED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-III HAS ERRED IN NOT REFERRING THE VALUAT ION OF THE PROPERTY TO DEPARTMENTAL VALUER, WITHOUT ANY BASIS AND NOT JUSTIFIED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-III HAS ERRED IN NOT ACCEPTING ADDITIONAL GROUND OF APPEAL FOR ALLOWING ELIGIBLE DEDUCTION OF RS. 1773400/- U/S 54 OF IT ACT, 1961, WITHOUT ANY BASIS AND NOT JUSTIFIED. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE CA SE OF THE ASSESSEE WAS REOPENED AND THE ASSESSMENT U/S 144 READ WITH SEC TION 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE AC T) WAS FRAMED. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SO LD A PROPERTY AT NAWALGARH VIDE SALE DEED DATED 04/6/2005 AND THE SAL E CONSIDERATION WAS SHOWN AT RS. 5,00,000/-. HOWEVER, THE SUB-REGISTR AR, NAWALGARH, THE REGISTERING AUTHORITY ADOPTED THE VALUE FOR STA MP DUTY PURPOSE AT RS. 41,92,277/-. THE ASSESSING OFFICER, THEREFORE, WA S OF THE VIEW THAT THE DIFFERENCE WAS LIABLE TO BE TAXED AS PER SECTION 50C OF THE ACT. IT IS OBSERVED BY THE ASSESSING OFFICER THAT DURING THE A SSESSMENT PROCEEDINGS IT WAS STATED BY THE ASSESSEE THAT THE V ALUE ADOPTED BY THE REGISTERING AUTHORITY WAS NOT CORRECT AND REQUESTED TO REFER TO THE DVO. THE ASSESSING OFFICER DID NOT THE REQUEST OF THE ASS ESSEE AND PROCEEDED ITA 353/JP/2013_ RAJESH DEVI VS ITO 3 TO COMPUTE CAPITAL GAIN ON THE BASIS OF VALUATION A DOPTED BY THE STAMP VALUATION AUTHORITY. THE ASSESSING OFFICER ALSO DECL INED TO ACCEPT THE CLAIM OF THE ASSESSEE U/S 54 OF THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), W HO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. APROPOS GROUND NO. 1 OF THE APPEAL, THE LD. AR O F THE ASSESSEE SHRI P.C. PARWAL HAS VEHEMENTLY SUBMITTED THAT THE A UTHORITIES BELOW ACTED CONTRARY TO THE PROVISIONS AND SUBMITTED THAT THEY ARE NOT ADOPTING THE VALUE AS ADOPTED BY THE STAMP VALUATIO N AUTHORITY. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS WRO NGLY INTERPRETED THE PROVISIONS OF SECTION 50C(2)(B) OF THE ACT. LD. AR HAS FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST THE VALUATION ORDER OF STAMP VALUATION AUTHORITY, THEREFORE, THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE MATTER TO THE DVO WHEN THE ASSESS EE HAD OBJECTED FOR APPROACHING THE VALUATION AS PER THE STAMP VALU ATION AUTHORITY. HE SUBMITTED THAT THE BASIS OF ADOPTING THE DIFFERENT VALUE BY THE STAMP VALUATION AUTHORITY IS EVEN OTHERWISE IS AGAINST THE LAW APPLICABLE THE ITA 353/JP/2013_ RAJESH DEVI VS ITO 4 BASIS OF ADOPTING THE VALUATION IS THAT SCHOOL WAS R UNNING ON THE ORIGINAL ASSET. HE FURTHER SUBMITTED THAT THE ASSESSEE WAS NO T RUNNING THE SCHOOL EVEN IF IT IS ASSUMED THAT THE SCHOOL WAS RUN NING IN THAT EVENT, IT WOULD NOT BE A COMMERCIAL PROPERTY. IT OUGHT TO HAVE BEEN TAKEN AS INSTITUTIONAL LAND. THE LD AR HAS PLACED RELIANCE O N THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF CIT VS. CHANDANI BUCHAR 323 ITR 510. IN SUPPORT OF THE CONTE NTION THAT THE ASSESSING OFFICER IS OBLIGED TO BRING ON RECORD POS ITIVE EVIDENCE SUPPORTING THE PRICE ASSESSED BY THE STATE GOVERNME NT FOR THE PURPOSE OF STAMP DUTY. HE SUBMITTED THAT THE MATTER MAY PLE ASE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO DECIDE THE ISSUE AFRESH AFTER REFERRING THE ISSUE OF VALUATION TO THE DVO. 6. ON THE CONTRARY, THE LD SR. DR HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT IT IS NOT THE C ASE WHERE THE DISPUTE IS NOT RAISED. HE FURTHER SUBMITTED THAT THE VALUAT ION AUTHORITY HAVE INCREASED THE VALUATION, THEREFORE, THE STAMP VALUA TION AUTHORITY HAS RAISED THE DISPUTE AND SUBMITTED THAT THEREFORE, IT CANNOT BE INTENDED THAT THE VALUE SO ADOPTED WAS NOT DISPUTED. ITA 353/JP/2013_ RAJESH DEVI VS ITO 5 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND GONE THROU GH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE TO BE EXAMINED WHETHER T HE ASSESSING OFFICER WAS JUSTIFIED IN ADOPTING THE SALE VALUE OF THE PROPERTY AS ADOPTED BY THE STAMP VALUATION AUTHORITY WITHOUT REF ERRING TO THE DVO DESPITE SPECIFIC OBJECTION WAS RAISED BY THE ASSESSE E DURING THE ASSESSMENT PROCEEDINGS. IT IS ALSO NOT DISPUTED BY THE REVENUE THAT THE ASSESSEE HAD IN FACT, DURING THE ASSESSMENT PROCEED INGS, RAISED OBJECTION AGAINST ADOPTING THE VALUE AS ADOPTED BY THE STAMP VALUATION AUTHORITY. SECTION 50C OF THE ACT READS AS UNDER:- 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTH ORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAM P 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 PU RPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. FOLLOWING PROVISOS SHALL BE INSERTED TO SUB-SECTION (1) OF SECTION 50C BY THE FINANCE ACT, 2016, W.E.F. 1-4-2017 : PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMO UNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSE SSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRAN SFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE W HERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEE N 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 BEFOR E THE DATE OF THE AGREEMENT FOR TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE ITA 353/JP/2013_ RAJESH DEVI VS ITO 6 ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHO RITY 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 TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS 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, 19 57 (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 OFFICE R' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R ) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'A SSESSABLE' 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, ADOPTED OR ASSESSED, IF IT WERE REF ERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY REFERRE D 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 ACCRUIN G AS A RESULT OF THE TRANSFER. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSING OFFI CER IS REQUIRED TO REFER THE MATTER OF VALUATION TO THE DVO IN THE EVENT THE ASSESSEE DISPUTES/RAISED OBJECTION AGAINST THE VALUATION ADO PTED BY THE STAMP VALUATION AUTHORITY. NO MATERIAL IS PLACED ON RECOR D SUGGESTING THAT THE ASSESSING OFFICER HAD REFERRED THIS ISSUE OF VALUAT ION TO THE DVO. RELIANCE IS PLACED BY THE LD. AR FOR THE ASSESSEE O N THE DECISION OF THE ITA 353/JP/2013_ RAJESH DEVI VS ITO 7 COORDINATE BENCH OF DELHI IN THE CASE OF RAVI KANT VS ITO 110 TTJ 297 WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER:- 9. ON A PERUSAL OF VALUATION REPORT, HOWEVER, WE F IND THAT EVEN THE VALUATION BY THE DVO HAS PLACED TOO MUCH OF EMPHASIS ON THE ASSESSMENT OR VALUATION BY THE STAMP VALUATION AUTHORITY. THIS IS NEITHER DESIRABLE NOR PERMISSIBLE. THE REASON IS THIS. THE VALUATION BY THE STAMP VALUATION AUTHORITY IS BASED ON THE CIRCLE RATES. THESE CIRCLE RATES ADOPT UNIFORM RATE OF LAND FOR AN EN TIRE LOCALITY, WHICH INHERENTLY DISREGARDS PECULIAR FEATURES O F A PARTICULAR PROPERTY. EVEN IN A PARTICULAR AREA, ON ACCO UNT OF LOCATION FACTORS AND POSSIBILITIES OF COMMERCIAL USE, THERE CAN BE WIDE VARIATIONS IN THE PRICES OF LAND. HOWEVER, CIRCLE RATES DISREGARD ALL THESE FACTORS AND ADOP T A UNIFORM RATE FOR ALL PROPERTIES IN THAT PARTICULAR AREA. IF THE CIRCLE RATE FIXED BY THE STAMP VALUATION AUTHORITI ES WAS TO BE ADOPTED IN ALL SITUATIONS, THERE WAS NO NEED OF REFERENCE TO THE DVO UNDER S. 50C(2). THE SWEEPING GENERALIZATIONS INHERENT IN THE CIRCLE RATES CANNOT HOLD GOOD IN ALL SITUATIONS. IT IS, THEREFORE, NOT UNCOMMON THAT WHILE FIXING THE CIRCLE RATES, AUTHORITIES DO ERR ON T HE SIDE OF EXCESSIVE CAUTION BY ADOPTING HIGHER RATES OF THE LAN D IN A PARTICULAR AREA AS THE CIRCLE RATE. IN SUCH CIRCUMSTANCES, THE DVO'S BLIND RELIANCE ON CIRCLE RATES IS UNJUSTIFIED. THE DVO HAS SIMPLY ADOPTED THE AVERAGE CIRCLE RATE OF RESIDENTIAL AND COMMERCIAL AREA, ON THE GROUND THAT INTERIOR AREA OF THE LOCALITY, WHERE THE ASSESSEE'S PROPERTY IS SITUATED, IS MIXED DEVELOPED AREA I.E. SHOPS AND OFFICES ON THE GROUND FLOOR AND RESIDENCE ON THE UPPER FLOORS. WHEN DVO'S VALUATION REQUIRED TO COMPARE THE SAME WITH THE VALUATION BY THE STAMP VALUATION AUTHORITY, IT IS FUTILE TO BASE SUCH A REPORT ON THE CIRCLE REPORT ITSELF. SUCH AN APPROACH WILL RENDER EXERCI SE UNDER S. 50C(2) A MEANINGLESS RITUAL AND AN EMPTY FORMALITY. IN OUR CONSIDERED VIEW, IN SUCH A CASE, THE DVO'S REPORT SHOULD BE BASED ON CONSIDERATION STATED IN ITA 353/JP/2013_ RAJESH DEVI VS ITO 8 THE REGISTRATION DOCUMENTS FOR COMPARABLE TRANSACTIONS, AS ALSO FACTORS SUCH AS INPUTS FROM OTHER SOURCES ABOUT THE MARKET RATES. FOR THE REASONS SET OUT ABOVE, AND WI TH THESE OBSERVATIONS, WE REMIT THE MATTER TO THE FILE O F THE AO. THE DVO WILL VALUE THE PROPERTY DE NOVO, IN THE LIGHT OF OUR ABOVE OBSERVATIONS, AND IN CASE THE VALUATION SO ARRIVED AT BY THE DVO IS LESS THAN RS. 11,42,100, THE A O SHALL ADOPT THE FRESH VALUATION SO DONE BY THE DVO FOR THE PURPOSE OF COMPUTING CAPITAL GAINS UNDER S. 48 OF THE ACT . WE DIRECT SO. FURTHER RELIANCE IS PLACED ON THE DECISION OF COORD INATE BENCH OF JAIPUR BENCH IN THE CASE OF M/S RAMESHWAR LAL MATORIA VS. I TO IN ITA NO. 271/JP/2009 WHEREIN THE COORDINATE HAS HELD AS UNDER :- 7. AFTER HAVING GONE THROUGH THE ABOVE SUBMISSIONS IN VIEW OF THE DECISIONS CITED, WE FIND SUBSTANCE IN THE ARG UMENTS OF THE LD.AR THAT IF FOR THE PURPOSE OF VALUATION U /S 50C (2), DLC RATES ARE TAKEN INTO CONSIDERATION FOR VAL UATION, THE WHOLE OBJECTIVE OF S.50C (2) FOR REFERRING THE PROPERTY TO DVO IS DEFEATED AS DLC RATES WOULD ALWAYS BE EQUAL TO THE VALUE ADOPTED/ASSESSED BY THE REGISTRAR AND THE REFORE, THE RESULTANT VALUE WILL NOT BE THE FAIR MARKET VAL UE OF SUCH PROPERTY. S.50C OF THE ACT IS A SPECIAL PROVISION F OR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. AS PER SUB SECTION (1) THERE TO, WHERE THE CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAP ITAL ASSET BEING LAND OR BUILDING FOR BOTH, IS LESS THAN THE V ALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (STAMP VALUATION AUTHORITY) FOR THE PURP OSE OF ITA 353/JP/2013_ RAJESH DEVI VS ITO 9 PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, FOR THE PURPOSE OF S.48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. SUB SECTION (1) OF S.50C IS SUBJECT TO SUB SECTION (2) THERETO. AS PER SUB SECTION (2), WHERE THE ASSESSEE CLAIMS B EFORE AN AO THAT THE VALUE ADOPTED OR ASSESSED BY THE STA MP VALUATION AUTHORITY UNDER SUB SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER, THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR REFERENCE BEFORE ANY AUTH ORITY, COURT OR THE HIGH COURT, THE AO MAY REFER THE VALUA TION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE A NY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB SECTIONS (2),(3),(4),(5) AND (6) OF S.16A, CLAUSE (I) OF SUB SECTION (1) AND SUB SECTIONS (6) AND (7) OF SECTION 23A, SU B SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SEC TION 37 OF THE WEALTH TAX ACT, 1957 (27 OF 1957), SHALL, WIT H NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY TH E ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. THE SUB SECTION (3) TALKS AS SUBJECT TO TH E PROVISIONS CONTAINED IN SUB-SECTION (2) WHERE THE VA LUE ASCERTAINED UNDER SUB - SECTION (2) EXCEEDS THE VAL UE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORIT Y REFERRED TO IN SUB SECTION (1), THE VALUE SO ADOPTE D OR ITA 353/JP/2013_ RAJESH DEVI VS ITO 10 ASSESSED BY SUCH AUTHORITY SHALL BE TAKEN AS THE FU LL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESU LT OF THE TRANSFER. THUS, IN OUR VIEW THE WHOLE PURPOSE OF THE LEGISLATURE IN INTRODUCING SUB SECTION- (2) TO S.50 C OF THE ACT IS TO MITIGATE THE HARDSHIP OF THE ASSESSEE GEN UINELY OBJECTING THE VALUE ADOPTED OR ASSESSED BY THE STAM P VALUATION AUTHORITY UNDER SUB SECTION (1), WHICH EXC EEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DAT E OF TRANSFER. IN SUCH A SITUATION THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER TO DETE RMINE THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. THE DVO IS THUS REQUIRED TO DETERMINE THE FAIR MARKE T VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER INDEPENDENTLY AND IF HE ADOPTS THE VALUE OF THE PRO PERTY AS PER THE DLC RATES DECLARED BY THE REGISTRAR IN THAT AREA THE RESULTANT VALUE WILL NOT BE THE FAIR MARKET VALUE OF SUCH PROPERTY IN COMPARISON TO THE VALUATION ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB SECTION (1) TO S.50C OF THE ACT ON THE OBJECTION AG AINST WHICH THE MATTER WAS REFERRED TO THE DVO. THE HONBL E MADRAS HIGH COURT IN THE CASE OF K.R.PALANISAMY AND OTHERS V/S UOI & ORS. (SUPRA) HAS BEEN PLEASED TO H OLD THAT SUB SECTIONS (2) & (3) OF S.50C PROVIDE FURTHE R SAFEGUARD TO THE ASSESSEE, IN THE SENSE THAT IF THE ASSESSEE CLAIMS BEFORE THE AO THAT THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES EXCEEDS THE FAIR MARKET VALUE TO E STABLISH BEFORE THE AUTHORITIES CONCERNED THE REAL VALUE WHIC H IS ITA 353/JP/2013_ RAJESH DEVI VS ITO 11 DETERMINABLE ONLY AFTER HEARING THE ASSESSEE. UNDER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE DVO WAS NOT JUSTIFIED IN IGNORING THE SUBMISSION OF THE ASSESSE E FOR SELLING THE PROPERTY UNDER STRESS AT THE PRICE DECL ARED BY IT AND INSTEAD ADOPTING THE DLC RATES DECLARED BY THE REGISTRAR IN THAT AREA. THUS, IN OUR VIEW THE VALUATI ON MADE BY THE DVO DOES NOT REFLECT THE FAIR MARKET VALUE O F THE PROPERTY AS ON THE DATE OF TRANSFER RATHER REFLECTS FAIR MARKET VALUE OF SIMILAR PROPERTY IN THAT AREA. WE T HUS TO MEET THE END OF JUSTICE WHILE SETTING ASIDE ORDERS O F THE LOWER AUTHORITIES AND THE REPORT OF DVO, DIRECT THE AO TO REFER THE PROPERTY FOR DETERMINING ITS FAIR MARKET VALUE AS ON THE DATE OF TRANSFER TO DVO WITH DIRECTION TO CON SIDER THE SUBMISSIONS OF THE ASSESSEE WHILE DETERMINING T HE SAID FAIR MARKET VALUE, AND DECIDE THE MATTER AFRESH AFT ER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE ON THE ISSUE. THE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. IF WE TEST THE FACTS OF THE CASE IN THE LIGHT OF THE AFOREMENTIONED JUDICIAL PRONOUNCEMENTS AND THE STATUTORY PROVISION, WE ARE O F THE CONSIDERED VIEW THAT THE ASSESSING OFFICER OUGHT TO HAVE REFERR ED THE MATTER TO THE DVO AND DVO AFTER CONSIDERING THE RELEVANT MATERIAL AND MAKING ENQUIRY WITH REGARD TO THE MARKET PRICE PREVALENT AT THE TIME WHEN THE ITA 353/JP/2013_ RAJESH DEVI VS ITO 12 SALE WAS EFFECTED. HENCE THE ACTION OF THE ASSESSING OFFICER IS CONTRARY TO THE PROVISIONS OF SECTION 50C OF THE ACT. 7.1 UNDISPUTEDLY, IN THE PRESENT CASE, THE ASSESSIN G OFFICER HAS NEITHER REFERRED THE ISSUE OF VALUATION TO THE DVO AS PER SECTION 50C(2)(B) OF THE ACT AND ALSO HAS NOT MADE ANY ENQU IRY WITH REGARD TO PREVALENT MARKET PRICE WHEN THE ASSESSEE HAS OBJECTE D TO ADOPTING OF VALUATION AS PER THE STAMP VALUATION AUTHORITY. UND ER THESE FACTS, THE ORDER OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF VALUATION OF PROPERTY IS RESTORED TO THE FILE OF THE ASSESSING O FFICER WITH A DIRECTION THAT THE ASSESSING OFFICER WOULD SEEK A REPORT FROM DVO IN RESPECT OF CORRECT MARKET VALUE OF THE PROPERTY IN QUESTION. T HE ASSESSEE WOULD COOPERATE IN THE ASSESSMENT PROCEEDINGS. NEEDLESS T O SAY THAT THE ASSESSING OFFICER WOULD PROVIDE SUFFICIENT OPPORTUNI TY OF HEARING TO THE ASSESSEE. ACCORDINGLY, THIS GROUND OF APPEAL IS ALL OWED FOR STATISTICAL PURPOSES ONLY. 8. GROUND NO. 3 OF THE APPEAL IS WITH REGARD TO ELIG IBILITY OF DEDUCTION U/S 54 OF THE ACT. AS WE HAVE RESTORED THE ISSUE OF VALUATION OF PROPERTY TO THE FILE OF THE ASSESSING OFFICER, THEREFORE, TH E ISSUE OF ELIGIBILITY OF DEDUCTION U/S 54 IS ALSO RESTORED TO THE FILE OF TH E ASSESSING OFFICER FOR ITA 353/JP/2013_ RAJESH DEVI VS ITO 13 TAKING DECISION AFRESH. THE ASSESSING OFFICER WOULD E XAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE FACTS AND THE CASE LAWS AS RELIED UPON BY THE ASSESSEE. 9. GROUND NO. 4 OF THE APPEAL IS GENERAL IN NATURE, REQUIRES NO SEPARATE ADJUDICATION. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2016. 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:- 16 TH DECEMBER, 2016 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. RAJESH DEVI, NAWALGARH. 2. IZR;FKHZ@ THE RESPONDENT- THE I.T.O., WARD- 1, JHUNJHUNU. 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. 333/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR