Sivanand Madas Vs ITO (ITAT Hyderabad)
Adjustment u/s 50C not a Prima Facie Issue- 50C cannot override Title & Valuation Disputes- AO must refer to DVO
Assessee challenged addition of ₹20.81 crore made u/s 50C through processing of return u/s 143(1).
Assessee filed return declaring ₹11.49 crore. CPC processed the return & adopted the stamp duty valuation (₹42.67 crore) instead of actual sale consideration (₹21.86 crore), resulting in total income of ₹32.31 crore & tax demand of ₹6.08 crore. CIT(A) dismissed the appeal, holding that since the stamp duty valuation was under challenge before Telangana High Court, AO should revisit later as per outcome.
Before tribunal, Assessee argued that:
- Adjustment u/s 50C cannot be made in intimation u/s 143(1) since it is not a prima facie adjustment.
- Title of the property itself was disputed in civil litigation.
- Excessive stamp duty valuation was under challenge before High Court.
- Once FMV is disputed, AO must refer matter to DVO u/s 50C(2) instead of blindly adopting stamp value. Reliance was placed on Sunil Kumar Agarwal v. CIT (Cal HC, 373 ITR 82).
Revenue argued that CPC rightly adjusted since the difference was apparent from records & assessee had been given opportunity through intimation.
