Reference to DVO cannot be made if assessee has challenged the valuation by stamp authorities

First contention of the assessee is that the sale consideration cannot be taken more than the actual sale consideration shown in the transfer deed i.e. a sum of Rs.4 1.51 crores. The alternative contention is that if the sale consideration is taken as valuation done by the Stamp Valuation Authorities then there is a mistake in calculation of sale consideration as TDR value has been taken at 100%.

The sale consideration taken at Rs.57,74,51,000/- has been agitated firstly, on the ground that as per valuation done by Joint Director Town Planning (Valuation) Maharastra, Pune on 18/06/2010 the value has been ascertained at Rs. 41.51 crores, therefore, any value more than that cannot be taken as sale consideration. The AO has taken sale consideration as per provisions of section 50c which is a special provision regulating full valuation of consideration in certain cases. It clearly describe that in a case where consideration received or accruing as a result of transfer by an assessee of capital asset, which inter-alia include land or building or both is less than the value adopted or assessed or assessable by any authority of a State Government (Stamp Valuation Authority) for the purpose of payment of stamp duty in respect of such transfer the value so adopted or assessed or assessable, shall for the purposes of section 48, be deemed to be full value of the consideration received or accruing as a result of such transfer. Exception is provided in sub­section (2)which prescribes that in a case where assessee claims before the AO that the value adopted or assessed or assessable by the Stamp Valuation Authority exceeds the fair market value of the property as on the date of the transfer and the value so adopted or assessed by the Stamp Valuation Authority under sub-section (1) of section 50C has not been disputed in any appeal or revision or no reference has been made before any other authority, court or High Court, then the AO may refer the valuation of the capital asset to Valuation Officer of the Department. Thus, according to sub-section (2) in a case where assessee claimes before the AO that the value adopted or assessed by Stamp Valuation Authority is exceeds the fair market value on the date of transfer and assessee does not dispute the valuation done by the Stamp Valuation Authority in any appeal or revision or reference then AO may refer the valuation of the said property to Valuation Officer and as per sub-section (3) in case where valuation done by the Valuation Officer is less than the value adopted by Stamp Valuation Authority then the valuation done by District Valuation Officer shall be taken as full value of the consideration received or accruing as a result of this transfer. In the light of provisions of section 50C it has to be decided that whether Ld. CIT(A) has committed any error in taking the value determined by Stamp Valuation Authority. The mandate of section 50C is clear. At the first place the sale consideration shall be deemed to be the value adopted or assessed by the Stamp Valuation Authority. The only exception provided is that firstly the assessee should claim before AO that such value adopted or assessed by the Stamp Valuation Authority exceed fair market value and secondly the assessee should not have disputed such valuation adopted in any appeal or revision and no reference is made before any other authority, court or High Court challenging the value adopted by the Stamp Valuation Authority.

According to the facts of the present case assessee being aggrieved by the valuation done by Stamp Valuation Authority had filed an appeal before the Additional Controller of Stamps, Mumbai which was registered as GSO/32- B/05/2009 under section 32B of the Bombay Stamp Act, 1958, which was decided vide order dated 4/8/2009 and copy of this order is filed at page 105 of the paper book. Additional Controller of Stamps Mumbai has dismissed this appeal of the assessee on the ground that the Appropriate Authority for deciding correctness of valuation done by Stamp Valuation Authority lies with the Chief Controlling Revenue Authority and he has given the liberty to the assessee to file revision application before the Chief Controlling Revenue Authorities under section 53A of the Bombay Stamp Act 1958 and disposed of the appeal filed by the assessee. Subsequently the assessee filed a Petition for revaluation before the Chief Controlling Revenue Authority, Maharashtra State, Pune against aforementioned order dated 4/8/2009 and this was registered and Miscellaneous Application of the assessee was disposed of vide order dated 6/2/2012 and the copy of this order has filed at pages 110 to 114 of the paper book. The sum and substance of the order passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune is that stamp duty has been paid by other party without protest and the duty payer has not appealed to this authority at any point of time. Moreover, assessee did not file application within time limit stipulated under the law i.e. 60 days from the receipt of impugned order. Therefore, assessee does not have locus to approach the authority. The authority is not legally empowered to take any decision or give opinion when no cause of action exists under the Stamp Act for the implementation of which this authority has been created. As per provision of section 50C(2) of Income Tax Act, 1961 a mechanism for redressal of grievances has been provided in a case where assessee disagrees with the valuation done by the Stamp Authorities and in this manner application filed by the assessee was considered to be non-maintainable. Not satisfied with the said order of Chief Controlling Revenue Authority, Maharashtra State, Pune assessee file a Writ Petition before Hon’ble Bombay High Court, which has been decided vide order dated 3/5/20 12 in Writ Petition LODG NO. 776 OF 2012 and copy of this order is filed at pages 115 to 118 of the paper book. 7.4 Subsequently, vide order dated 15/3/2013 certain mistakes in mentioning the dates was rectified and in Para-4 reproduced above and the date correctly to be read as 04-08-2008.

In the light of aforementioned facts it can be said that the value adopted and assessed by the Stamp Valuation Authority under sub-section (1) was disputed by the assessee in the appeal, revision and even before Hon’ble High Court. If it is so, then according to the provisions of section 50C the assessee cannot obtain the benefit as provided in sub-section(2) of section 50C as neither of the conditions described in sub-section(2) has been fulfilled by the assessee. In this view of the situation, neither the AO nor Ld. CIT(A) could adopt sale consideration of the property any amount less than the value adopted or assessed by the Stamp Valuation Authority as section 50C does not recognize such curtailment of the sale consideration in any manner. Therefore, we confirm the findings of Ld. CIT(A) that the sale value of the consideration taken by the Stamp Valuation Authority was the right amount for the purpose of calculation of long term capital gain.

 There is no force in the contention of Ld. AR regarding mistake having been committed by the Stamp Valuation Authority in taking the value of TDR and it has been clearly described in the order of Ld. CIT(A) that the value of TDR also has been taken at 60% and it has not been taken at 100%. The relevant portion of order of Ld. CIT(A) has already been reproduced in para -3.9 of this order. We, therefore, decline to interfere in such findings of facts recorded by Ld. CIT(A) and this contention of Ld. AR is rejected.