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| The Tax Publishers2020 TaxPub(DT) 4546 (Mum-Trib) INCOME TAX ACT, 1961
Section 54
Assessee made a plea before AO that if explanation of assessee was not accepted that the market value was less than the stamp duty valuation the valuation of the property might be referred to the valuation cell of the department to compute the market value and this was completely ignored by AO and also by CIT(A), therefore, AO was directed to refer the matter to the DVO for valuation of the property as per the provisions of sub-section (2) of section 50C.
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Capital gains - Exemption under section 54 - -
Assessee sold a property for an amount of Rs. 30,00,000. After arriving at indexed cost at Rs. 11,99,224 assessee had reported long-term capital gain of Rs. 18,00,776. Long-term capital gain was invested for purchase of new property and exemption under section 54 was claimed. However, AO noticed that the market value of the property was at Rs. 61,00,000 and sale consideration was reported only at Rs. 30,00,000. Therefore, applying provisions of section 50C stamp duty value of the property was considered as full value of consideration received as a result of transfer and accordingly claim for exemption under section 54 was disallowed. Held: Assessee made a plea before AO that if explanation of assessee was not accepted that the market value was less than stamp duty valuation, the valuation of property might be referred to valuation cell of department to compute the market value. This was completely ignored by AO and also by CIT(A). Sub-section 50C(2) is very clear if valuation of property as arrived at by stamp valuation authority is disputed by assessee AO was duty bound to refer the valuation of capital asset to valuation officer. Therefore, AO was directed to refer the matter to the DVO for valuation of property as per provisions of sub-section (2) of section 50C and to determine the capital gains in accordance with law.
Relied:Abbas T. Reshamwala (Prop. Dynamic Impression) v. ITO [ITA No. 3093/Mum/2009 dt. 30-11-2009].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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