Case Law Details

Case Name : Nikunjkumar H.Jariwala Vs ITO (ITAT Ahemdabad)
Appeal Number : I.T.A. No. 2404/Ahd/2011
Date of Judgement/Order : 19/03/2015
Related Assessment Year : 2008-09
Courts : All ITAT (5373) ITAT Ahmedabad (383)

CA Prarthana Jalan

Hon’ble ITAT Ahemdabad in the case of Nikunjkumar H.Jariwala v/s ITO in I.T.A. No. 2404/Ahd/2011 vide order dated 19/03/2015 has held that as per the mandate provisions of section 50C(2) of the Act, the AO was not justified in adopting the value of the property as adopted by the “stamp valuation authority” without referring to the DVO for ascertaining the fair market value of the property.

Facts of the case are that the AO has made addition on the basis of the difference in the value of the property declared by the assessee as sale consideration and adopted by the stamp valuation authority. The appellant pleaded is that in terms of the provisions of section 50C(1) of the Act, where the AO finds that the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed (or assessable) by any authority of a State Government 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 the full value of the consideration received or accruing as a result of such transfer. It was also argued  that the AO adopted the full value of the consideration as adopted by the “stamp valuation authority” without  taking the note of the mandate of sub-section(2) of Section 50C of the Act.

Hon’ble ITAT concluded as under
” Therefore, in view of the provisions of section 50C(2) of the Act,we are of the considered view that the AO was not justified in adoptingthe value of the property as adopted by the “stamp valuation authority”without referring to the DVO for ascertaining the fair market value of theproperty. Therefore, the orders of the authorities below on this issue are hereby set aside and the additional ground raised by the assessee is restored back to the file of AO to decide the same in accordance with law. Needless to say that the AO would afford reasonable opportunity of beaing heard to the assessee before passing the order. Thus, additional ground raised by the assessee is allowed for statistical purposes.”

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