Sarwan Kumar Vs ITO (ITAT Delhi)
The case before the ITAT Delhi involved an appeal by the assessee against the addition made under Section 50C of the Income Tax Act, 1961, and a separate appeal by the Revenue relating to deletion of penalty under Section 271(1)(c).
The assessee had sold immovable property situated in the industrial area at Abadanpur, District Bareilly, for an actual sale consideration of Rs. 10 lakh through two sale deeds. However, for stamp duty purposes, the property was valued at Rs. 64.10 lakh in the registration deeds. The Assessing Officer invoked Section 50C and adopted the stamp duty value as the deemed full value of consideration for computing capital gains, resulting in assessment under Section 143(3).
The assessee challenged the action on the ground that the value adopted by the stamp valuation authority exceeded the fair market value of the property. It was argued that the circle rate in the area was significantly lower and that other nearby properties had also been sold at values lower than the stamp duty valuation. The assessee contended that despite disputing the stamp duty valuation before the Assessing Officer, the matter was not referred to the Valuation Officer under Section 50C(2).
