INCOME TAX ACT, 1961

Section 50C

Capital gains - Adoption of full value of consideration as per stamp duty valuation under section 50C - Reference to DVO -

Assessee's were joint owner of a property and when the said immovable property was sold assessee's have declared sale consideration of Rs. 13,00,000 for each 1/2 share, however, AO had referred the value to DVO who had determined the fair market value at Rs. 15,33,800 of each 1/2 share. Since, the fair market value determined by the DVO was more than the stamp duty valuation therefore, AO adopted the full value of consideration at Rs. 15,14,934 for each 1/2 share. Assessee contended that the sale consideration declared by assessee was correct and have filed Valuation Report of registered valuer who determined the value of the property at Rs. 13,22,227 for each 1/2 share of assessee. CIT(A) confirmed the action of AO in adopting full value consideration as per section 50C.Held: DVO had determined the fair market value of the property at Rs. 15,33,800 whereas the registered valuer has determined the fair market value of the property at Rs. 13,22,227 for each 1/2 share of the assessee. Thus, it was clear that determination of fair market, mvalue was subjective to the individual decision and therefore, to adopt a fair and proper value average of two fair market value, one determined by DVO and another by the registered valuer could be adopted as fair market value under section 50C, which comes to Rs. 14,28,013. Accordingly, AO was directed to adopt fair market value of the A½ each share of the property at Rs. 14,28,013.

Relied:CIT v. Smt. Nilofer I. Singh (2009) 309 ITR 233 (Del) : 2009 TaxPub(DT) 785 (Del-HC).

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. :

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