| COURT: | ITAT Delhi |
| CORAM: | I. C. Sudhir (JM), L. P. Sahu (AM) |
| SECTION(S): | 45, 48, 50C |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital gains, stamp duty valuation |
| COUNSEL: | Piyush Kaushik |
| DATE: | June 7, 2017 (Date of pronouncement) |
| DATE: | June 9, 2017 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 50C: Failure by the AO to refer the valuation of the capital asset to a valuation officer instead of adopting the value taken by the stamp duty authorities is a fatal error and the assessment order has to be annulled. The matter cannot be set aside to the AO for a second chance. The power of the ITAT to set aside cannot be exercised so as to allow the AO to cover up the deficiencies in his case | |
On the very perusal of the provisions laid down under section 50C of the Act reproduced hereinabove, we fully concur with the finding of the id. CIT (Appeals) that when the assessee in the present case had claimed before Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub section (1) exceeds the fair market value of the property as on the date of transfer, the Assessing Officer should have referred the valuation of the capital asset to a valuation officer instead of adopting the value taken by the state authority for the purpose of stamp duty. The very purpose of the Legislature behind the provisions laid down under sub section (2) to section 50C of the Act is that a valuation officer is an expert of the subject for such valuation and is certainly in a better position than the Assessing Officer to determine the valuation. Thus, non-compliance of the provisions laid down under sub section (2) by the Assessing Officer cannot be held valid and justified. The Honble jurisdictional High Court of Allahabad in the case of Shashi Kant Garg 285 ITR 158 (All) has been pleased to hold that it is well settled that if under the provisions of the Act an authority is required to exercise powers or to do an act in a particular manner, then that power has to be exercised and the act has to be performed in that manner alone and not in any other manner. Similar view has been expressed by the other decisions cited by the id. AR.
OFFHAND
The point of dispute has been decided in favor of the assessee; that is on the limited ground of the failure by the AO to refer to Valuation Officer for having the FMV of the property determined as required of him by the law, which is a ‘fatal error’.
Indisputably,the view taken is to be commended as quite logical and well reasoned. Also,in one’s personal long standing conviction,that shows the proper direction for any adjudicating authority to prudently follow, in order to avoid or obviate the otherwise inevitable consequence of multiplicity of proceedings.
In the Order, sec. 50C,as reproduced,includes the subsequent prospective amendments ; for instance,the Proviso to sub-section (1) inserted by the Finance Act, but w.e.f 1-4-2017, inadvertently or otherwise.Be that as it may,according to a critical view, the said Proviso cannot be regarded to have been happily / ideally worded, so as to put an end to any further scope for controversy. The point in one’s mind is briefly this: – it could have been simply provided that the value should be taken at the actual consideration for transfer,- being the value as agreed upon and factually received in pursuance of the agreement to sell and the registered conveyance deed; without any reference to “the value adopted or……on the date of agreement…”
In short, it seems worthwhile, for tax pundits in practice, to venture a critical analysis of, among other related provisions, sec 50C ,- its pre- and post- amendments- for incisively identifying and sharing eminent views for the common purpose and taxpayers’ good.
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