THE issues before the Bench are - Whether when the assessee had not filed any objections to the valuation report at the proceedings stage or in the remand proceedings before the assessing authority, the objection on the same can be filed before the Tribunal and Whether when the assessee has not produced any evidence for payment of brokerage, the deduction for the same can be allowed while computing sales consideration. And the verdict goes against the assessee.
Facts of the case
Assessee is an individual. Its assessment had been reopened u/s. 147 on the basis that the
assessee had sold a shop for which, while computing the capital gain, he had not taken the sale consideration as per the provision of section 50C. While selling the shop, total sale consideration was shown at Rs.3,90,000/-, but the value of the property assessed for stamp duty purpose was determined at Rs.5,23,000/- and hence, the AO after recording reason to believe that there was a difference of Rs.1,33,000/- in the value of sale consideration declared by the assessee for the purpose of computation of capital gain and therefore, the income has escaped assessment to the extent of Rs.1,33,000/- and hence, he issued a notice u/s. 148. After rejecting the objection of the assessee for reopening, the AO had completed the assessment at an assessed income of Rs.2,66,450/- as against the returned income of the assessee at Rs.1,29,200/- after computing the income of the assessee. Therefore, there was an addition of Rs.1,37,252/- to the income of the assessee. On appeal before CIT(A), AR had submitted that the valuation report of registered valuer in the said property was filed determining the FMV of the property at Rs.3,12,395/-, which was less than the sale consideration of Rs.3,90,000/- shown by the assessee for computation of CG and request was made to the AO that if he does not agree with the valuation report of the registered valuer, the matter was referred to the DVO as per provisions of section 50C(2), but the matter was not referred to the concerned Valuation Officer and assessment was completed on the basis of valuation determined by the Stamp Valuation Authority. The AO was, therefore, directed to refer the matter of valuation of property to the DVO as per provisions of section 50C(2) to determine the value of sale consideration for the purpose of computation of capital gain as per directions of the CIT(A). The AVO vide his report dated 27.12.2011 valued the property at Rs.4,14,870/-. The remand report from the AO was also submitted, in which the AO agreed with the report of AVO valuing property at Rs.4,14,870/-. The report of the Valuation officer provided to the assessee for his comments as to why the valuation determined by the AVO should not be taken for the purpose of computation of capital gains. The CIT(A) had held that since the value of sale consideration determined by the AVO at Rs.4,14,870/- was the FMV. Therefore, it should be adopted as against the Stamp Valuation Authority, therefore, the addition was restricted to Rs.29,122/-. Further, since no supporting evidence of payment of brokerage was produced, therefore, such a ground was dismissed.
Before Tribunal, the AR had referred to page 17 of the paper book to show circle rate of the property in the area of Lohamandi was Rs.6000/- per Sq. Meter, which was also mentioned in the sale deed (PB-1), therefore, AVO should not have taken the rates at Rs.6000/- + 50% (Rs.9000/-). He has, however, admitted that the assessee did not challenged the report of AVO before the CIT(A). Further no objections have been raised before the Stamp Valuation Authorities with regard to the valuation of the property. The AR had also admitted that there was no evidence to prove payment of brokerage on sale of property. He had, after making the arguments submitted that the assessee had already expired and appeal was filed through legal heir and since the legal heir does have any amount to be paid, therefore, the present appeal had been filed.
Held that:
++ it is not in dispute that Stamp Valuation Authorities have assessed the value of property for stamp duty purposes at Rs.5,23,000/-. The assessee claimed before the CIT(A) that a report of registered valuer was filed showing valuation of property at Rs.3,12,395/-. Therefore, request was also made to the AO that if he did not agree with the report of registered valuer, the matter may be referred to the DVO as per section 50C(2). The CIT(A) on such plea of the assessee referred the matter to the DVO for determining the valuation of the property and the DVO opined value at Rs.4,14,870/-. This figure was also agreed to by the AO in the remand report. It is admitted fact that the assessee never objected to the valuation report submitted by the AVO at Rs.4,14,870/-. If the assessee was at all aggrieved against the valuation report at Rs.4,14,870/-, the assessee should have raised objection to said valuation report at the proceedings before the CIT(A) or in the remand proceedings before the AO. Since the assessee did not object to the report of DVO filed u/s. 50C(2), therefore, the assessee could not be allowed to dispute the same report at this stage;
++ further, the AVO in the valuation report has referred to the basis of the circle rate adopted by him as per orders issued by ADM(F)/Sub- Registrar on 15.01.2003 effective at that time on sale of shops. No material is produced before us even to dispute the correctness of the order issued by ADM/Sub-Registrar in this regard. Nothing is clarified before me or before the authorities below as to why the assessee now would take a stand of lower valuation of property as against the valuation determined by the DVO. There may be several directions or revision of the circle rates in respect of different properties at different times, therefore, if the assessee felt aggrieved against the rate taken by the DVO, it would have been proper for the assessee to raise objection on the basis of some material or evidence before the DVO, before the AO at the remand proceedings or at least before the CIT(A). The assessee did not choose to do anything in the matter and merely raised the objection that since valuation was less than 15% in difference, therefore, no addition should be made. Such a plea was alien to the provisions of section 50C. Further section 50C is a special provision for full value of consideration in certain cases and deals with the transfer of capital asset by the assessee in land or building or both. Therefore, whatever is now claimed in the grounds of appeal, cannot be subjected to favourable consideration to the assessee. The impugned order reproduced above would clearly reveal that the CIT(A) on proper appreciation of provisions of section 50C and the facts of the case rightly concluded that the valuation of sale consideration was to be taken at Rs.4,14,870/- as per valuation report and since cost of acquisition is admitted by the assessee at Rs.3,85,748/-, therefore, the addition was rightly restricted to Rs.29,122/-. It is also admitted fact that the assessee has no evidence to support the plea of payment of brokerage on sale of property, therefore, the claim of assessee for such deduction has rightly disallowed by the CIT(A). Considering the above facts of the case and a very small addition sustained by the CIT(A), it is clear that it was a very small matter and the assessee without reasons has filed the present appeal. The Counsel for the assessee submitted that since the appeal is filed through legal heir and legal heir is not in a position to pay small tax, therefore, present appeal has been filed. Such a reason itself is not justified in filing the frivolous appeal before the Tribunal. Since it is a very small matter, therefore, I do not propose to impose cost on the legal heir of the assessee, otherwise it was a fit case for dismissal of appeal of assessee subject to cost. In view of the above findings, the appeal of the assessee is liable to be dismissed.
No comments:
Post a Comment