Vijay Kumar Singh,, New Delhi vs Department Of Income Tax

ITO, Vijay Kumar Singh, Ward 46(1), A-2, Park View Apartments, New Delhi. Vs. Rohtak Road, New Delhi. AAPTS7773B

(Appellant) (Respondent)

Appellant by : Sh. T.P. Chandrakar, Sr. DR Respondent by : Sh. Yogesh Vyas, CA

Date of Hearing: 26/02/2015 Date of Pronouncement:

ORDER

PER I.C. SUDHIR, J.M.

The Revenue has questioned the first appellate order on several

grounds, whereby the ld. CIT(A) has deleted the addition of Rs. 12,32,988/-

made by the AO invoking provisions of section 50C of the Income Tax Act.

2. The facts in brief are that the assessee had sold a property in

Mumbai for a consideration of Rs. 18 lakhs but the property was registered

at Rs. 31,16,988/-. The AO treating the actual consideration of the property

at Rs. 31,16,988/- made the addition of amount in difference i.e. Rs.

13,16,988/- (Rs. 31,16,988/- - Rs. 18,00,000/-) on account of deemed

sales consideration. The ld. CIT(A) has accepted the registered valuers ITA No. 3845/D/2013 Mr. Vijay Kumar Singh 2

report and make an addition of Rs. 84,000/- (Rs. 18,84,000/- - Rs.

18,00,000/-) to the return income of the assessee.

3. The ld. DR submitted that the AO u/s 50C of the Act was justified in

making the addition on the basis of value adopted by the stamp value

authority which was not disputed by the assessee. The reasons cited by

the assessee for distress sale is not based on any concrete evidence.

4. The ld. AR on the other hand, tried to justify the first appellate order.

He reiterated submissions made before him. He submitted that the AO

failed to appreciate the submission of the assessee that the fair market

value of the property was lower than the value as taken for stamp duty

purpose and had also contended that the fair value of the property sold was

Rs. 18 lacs which was the actual sale price. In support the value

determined by the approved valuer was submitted which was same as

decalred by the assessee.

5. Having gone through the provisions laid down under section 50C of

the Act it is very much clear from the provisions laid down in sub-section (2)

to section 50C of the Act that in a case where assessee claims before the

AO 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 the transfer, the AO may refer the valuation

of the capital asset to a Valuation Officer.

ITA No. 3845/D/2013 Mr. Vijay Kumar Singh 3

6. Admittedly, in the present case before us the assessee had claimed

before the AO that the value adopted by the stamp valuation authority

exceeds the fair market value of the property on the date of transfer hence

it would have been proper on the part of the AO to refer the valuation of the

property in dispute to a Valuation Officer and should have acted as per the

provisions laid down u/s 50C of the Act. Ignoring this aspect the ld. CIT(A)

was not justified to accept the approved valuers report for the valuation

while holding that the AO should have referred the matter to the DVO of the

respective area for the valuation of the property. We, thus, while setting

aside the orders of the authorities below remand the matter to the file of the

AO to refer the matter to the DVO of the respective area for determining the

valuation of the property and decide the issue afresh on the basis of that

valuation as per the provisions laid down u/s 50C of the Act after affording

opportunity of being heard to the assessee.

7. The grounds on the issue are thus, allowed for statistical purposes.

8. In the result, the appeal is allowed for statistical purposes.

Order pronounced in the open court on 27/02/2015

Sd/- Sd/-

(R.S. SYAL) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 27/02/2015 *Kavita ITA No. 3845/D/2013 Mr. Vijay Kumar Singh 4

Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, New Delhi.

TRUE COPY By Order

ASSISTANT REGISTRAR ITA No. 3845/D/2013 Mr. Vijay Kumar Singh 5

Sl. Description Date No. 1. Date of dictation by the Author 27.02.2015 2. Draft placed before the Dictating Member 27.02.2015 3. Draft placed before the Second Member 27.02.2015 4. Draft approved by the Second Member 27.02.2015 5. Date of approved order comes to the Sr. PS 27.02.2015 6. Date of pronouncement of order 27.02.2015 7. Date of file sent to the Bench Clerk 27.02.2015 8. Date on which file goes to the Head Clerk 9. Date of dispatch of order