AO obliged to refer matter to valuation officer when appellant objects to adoption of stamp duty value as full value of consideration

Padmakar Matondkar Vs Commissioner of Income-tax (ITAT Mumbai)

ITAT Mumbai held that when appellant objects to the adoption of stamp duty value in terms of section 50C(1) of the Income Tax Act as full value of consideration, AO is under obligation to refer the matter to the valuation officer under section 50C(2) of the Income Tax Act.

Facts- The present appeal is directed against the order of CIT(A) confirming the order passed by the Assessing Officer whereby the Assessing Officer had adopted stamp duty value as full value of consideration by invoking provisions of Section 50C of the Act to arrive at Long Term Capital Gain of INR 1,53,86,348/- arising from sale of capital assets and brought to tax INR 12,60,141/-, being Appellant’s share of 8.19% in the capital gains so determined, in the hands of the Appellant.

Conclusion- Held that since the Appellant had objected to the adoption of stamp duty value in terms of Section 50C(1) of the Act as full value of consideration on the ground that the market value was less than the stamp duty value on account of the aforesaid dispute over right/title/interest of the capital assets, the Assessing Officer was, in our view, under obligation to refer matter to the valuation officer under Section 50C(2) of the Act.

Accordingly, we set aside the orders of the Assessing Officer and CIT(A) on this issue and remit the same to the record of the Assessing Officer for re-computation of the capital gain after making reference to the valuation officer and considering the report of valuation officer as per law. The Assessing Officer shall confront the Appellant with the aforesaid valuation report and grant the Appellant reasonable opportunity of being heard before passing the assessment order.

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