- (1.) This appeal has been filed by the Department-appellant under section 260A of the Income-tax Act, 1961, against the judgment and order dated December 31, 2007, passed by the Income-tax Appellate Tribunal, Lucknow, in I.T.A. No. 1232/Luc/2006 for the assessment year, 2003-04. This appeal was admitted by a Bench of this court on June 30, 2008, on the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that valuation done by the Departmental Valuer was to be adopted ? 2. Whether, on the facts and in the circumstances of the case, the fair market value of a property within the meaning of section 50C of the Act is to be taken as that fixed by the stamp duty authority or that valued by the Departmental Valuer ? 3. Whether, on the facts and in the circumstances of the case, for ascertaining the fair market value the value on the date of actual transfer/possession is to be considered or the value on the date of agreement to sell when the agreement has not been a registered one ?
(2.) The brief facts of the case are that on December 10, 2001, the respondent-assessee entered into an agreement with M/s. Nova Hospital (P.) Ltd. for sale in respect of plot No. 1, Vikas Khand, Gomti Nagar, Lucknow, for a consideration of Rs. 51,75,000. The sale deed was registered on April 27, 2002, and the stamp authorities levied the stamp duty on a value of Rs. 1,38,00,000 as per the circle rate. The Assessing Officer invoked the provisions of section 50C for substitution the recorded sale consideration of Rs. 51,75,000 to Rs. 1,38,00,000 being the valuation done by the stamp valuation authorities. The assessee took a plea of section 50C(2) of the Income-tax Act and claimed that the value adopted by the stamp duty authorities exceeded the fair market value as on the date of the transfer. The assessee also submitted a report of the assessee's registered valuer who valued the property at Rs. 48,37,500 as on the date of transfer. However, the Assessing Officer was not satisfied and he rejected the report submitted by the assessee's valuer and finally referred the matter to the Departmental Valuation Officer (hereinafter referred to as the D.V.O.) to obtain the fair market value. The D.V.O. valued the property in question at Rs. 58,50,000, but the Assessing Officer has rejected the D.V.O. report and adopted the valuation made by the stamp valuation authorities as full value of the consideration received and accordingly calculated the capital gains.
(3.) Being aggrieved, the assessee has filed the appeal before the first appellate authority, who observed that the Assessing Officer obtained the valuation made by the D.V.O. and in view of the ratio laid down in the case of CWT v. Dr. H. Rahman, 1991 189 ITR 307 as well as the Cental Board of Direct Taxes Circular No. 8 of 2002, dated August 27, 2002 (see), and the same is final. So, the Assessing Officer was directed to adopt the value of sale consideration which was estimated by the D.V.O. Being aggrieved, the Department filed second appeal before the Tribunal, who, vide the impugned order, uphold the order of the first appellate authority. Still not being satisfied, the Department has filed the present appeal.;