Shanubhai M.Patel, Himatnagar vs Department Of Income Tax

BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 2309/Ahd/2011 नधा रण वष /Assessment Year: 2008-09 ACIT, S.K. Range Shri Shanubhai M. Patel Himmatnagar. Vs Nr. Motibaug Society Himatnagar.

PAN : AVFPP 1146 C

अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)

Revenue by : Shri Nimesh Yadav, SR.DR Assessee(s) by : Shri S.N. Divetia

सन ु वाई क तार ख/ Dateof Hearing : 04/06/2015 घोषणा क तार ख / Date of Pronouncement: 12/06/2015

आदे श/O R D E R

PER N.S. SAINI, ACCOUNTANT MEMBER: This appeal by the

Revenue is directed against the order of the CIT(A) -VIII dated 8.7.2011 for the Asst.Year 2008-09.

2. The sole ground taken by the Revenue in this appeal is that the CIT(A) erred in deleting the addition of Rs.2,44,83,495/- made on account of capital gain on the basis of valuation of asset by DVO.

3. Brief facts of the case are that the assessee sold two plots of land bearing survey no.14 and 15 for Rs.8,04,20,506/-. The AO referred the matter to the DVO on 31.3.2008 for determining the fair market value of the land. The DVO submitted the valuation report on 24.12.2010, from which it was observed that there was no change in the valuation of plot bearing survey no.15, but for plot bearing survey no.14, the ITA No.2309/Ahd/2011 2

valuation cell has determined its fair market value at Rs.10,49,04,000/- instead of Rs.8,04,20,506/- declared by the assessee.

4. The assessee objected to the valuation done by the DVO on the ground that the sale consideration shown by the assessee was higher than the stamp valuation, hence section 50C was not applicable. The AO did not accept the objection of the assessee, and have computed long term capital gain of land situated at survey no.14 and adopted value of Rs.10,49,04,000/- and determined income at Rs.9,72,08,700/-

5. The assessee carried the matter before the CIT(A).

6. The CIT(A) observed that it is an admitted fact that the sale consideration offered by the assessee was higher than the value prescribed in jantri for stamp duty valuation. Under the circumstances, section 50C was not applicable to the assessee. He relied on the decision of Hon'ble Madras High Court in the case of K.R. Palani Swamy Vs. Union of India, 306 ITR 61, Punjab Poly Jute Corp. Vs. ACIT, 120 TTJ 1113 and the decision of the Delhi Bench of the Tribunal in the case of Jitendra Mohan Saxena Vs. ITO, 117 TTJ 974, and deleted the addition.

7. DR supported the order of the AO, whereas, the AR of the assessee relied on the decision of the Ahmedabad Tribunal in the case of ITO Vs. Nitin Jayantilal Shah, (2011) 48 SOT 16(Ahd) wherein it was held that in case where the valuation done by the DVO is more than the valuation done by the stamp valuation authority, then the valuation done by the stamp valuation authority will be deemed as full value of consideration as per sub-section (1) of section 50C. Therefore, Section 55A as such cannot be invoked when transfer of immovable property being land or building or both are involved.

8. In the instant case, the issue involves computation of capital gain in respect of sale of plot of land being surveyno.14. It is not in dispute ITA No.2309/Ahd/2011 3

that the said plot of land was sold by the assessee by a registered deed at actual sale consideration of Rs.8,04,20,506/-. Further, it is also not in dispute that the jantri value of the same for the purpose of stamp duty was determined by the competent authority at Rs.5,07,60,000/-. Thus, the actual sale value being more than stamp duty, the assessee computed the capital gains by taking actual sale value as the consideration of the transfer. On the above facts, neither section 50C nor section 55A of the Act empowers the AO to substitute the actual sale consideration by estimating fair market value determined by the DVO. As per section 50C a reference to DVO can be made by the AO when the stamp duty value is more than the actual sale consideration, and the assessee objects for adoption of stamp duty value as consideration for computation of capital gain. The above situation is not present in the instant case. Further, a reference under section 55A to the DVO can be made when it is necessary to determine the fair market value of an asset. In the instant case, as the actual sale consideration was determined, and the same being more than the stamp duty value, question of determining of fair market value does not arise. Therefore, we do not find any error in the orders of the CIT(A), which is confirmed, and the ground of the appeal of the Revenue is dismissed.

9. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday the 12th day of June, 2015 at Ahmedabad.

Sd/- Sd/- (RAJPAL YADAV) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad; Dated 12/06/2015