- (1.) The Court: The subject matter of challenge in this appeal is a judgment and order dated 1st August, 2013 by which the appeal preferred by the assessee was dismissed. The assessee has come up in appeal. The following questions of law have been raised by the assessee: "(a) Whether the Tribunal misdirected itself in law in proceeding on the basis that reliance by the appellant on the deeds of conveyance containing the recital that the agreed consideration represented the highest prevailing market price was not sufficient for disputing the stamp value and making reference to the departmental valuation officer in terms of sub-section (2) of section 50C of the Income-tax Act, 1961 and its purported findings in that behalf are arbitrary, unreasonable and perverse? (b) Whether and in any event, upon a true and proper interpretation of the material provisions of the Income-tax Act, 1961, the entire capital gain would be exempted if the sale consideration received is fully invested in bonds notified for the purpose of section 54EC and the Tribunal was justified in law in taking a contrary view?" The facts and circumstances of the case, briefly stated, are that the assessee sold a piece of land at a sum of Rs. 10 lakhs by two several deeds of conveyance and invested the sale proceeds in the bonds and on that basis he claimed deduction under Section 54EC of the Income-tax Act, hereinafter referred to as the said Act. The market value of the land was, however, assessed by the District Sub-Registrar at a sum of Rs. 35 lakhs, which was duly paid. The Assessing Officer, in the circumstances, adopted the valuation made by the District Sub-Registrar and computed the long term capital gain on that basis. The CIT(A) upheld the order of the Assessing Officer. An appeal preferred by the assessee was dismissed by the learned Tribunal for the following reasons: "We have considered the rival submissions. A perusal of the grounds of appeal as raised by the assessee clearly shows that the assessee has not pointed out any reason for reference to the D.V.O. in respect of the provisions of section 50C of the Act. Admittedly, the valuation of the property by the stamp valuation authority at Rs. 35 lakhs has not been disputed by the assessee. Once the stamp valuation authority's value has been accepted by the assessee, then the same would have to be adopted in view of the specific provisions of section 50C of the Act. Further a perusal of the order of the learned Commissioner of the Income-tax (Appeals) clearly shows that the learned Commissioner of Income-tax (Appeals) has given detailed reasons to show that the provisions of section 54F of the Act cannot be considered or treated as to be in pari materia with provisions of section 54EC of the Act. Further a perusal of the assessment order clearly shows that the Assessing Officer had provided the assessee an opportunity to take its stand in respect of the provisions of section 50C and the assessee had not replied in respect of section 50C. In the circumstances, we are of the view that the findings of the learned Commissioner of Income-tax (Appeals) and the Assessing Officer are on a right footing and do not call for any interference."
(2.) Mr. Khaitan, learned Senior Advocate, appearing for the appellant-assessee, has drawn our attention to the following recital appearing from each of the deeds of conveyance: "AND WHEREAS the Vendor finding the price offered by the Purchaser to be highest prevailing in the market agreed to sell scheduled land fully described in the schedule below for the sum of Rs. 5,00,000.00 (Rupees Five Lacs Only) free from all encumbrances and charges whatsoever unto the Purchaser and the said land is transferred in the manner as appearing hereinafter."
(3.) Mr. Khaitan submitted that the case of the assessee has always been that the price offered by the purchaser was the highest prevailing price in the market. The valuation made by the District Sub-Registrar for the purpose of stamp duty, therefore, was not the prevailing price of the land in question. He added that the highest prevailing price in the market obviously is also the fair market value of the property. The expression "fair market value" cannot have any other significance than the price, which can fairly be expected to be had upon sale of the property. He, therefore, contended that the case of the assessee always was that the valuation made by the District Sub-Registrar for the purpose of stamp duty was far in excess than the market value of the property. Both the deeds of conveyance were produced before the Assessing Officer. Therefore, the valuation was, in fact, challenged. In the facts of the case, the Assessing Officer, in fairness, should have referred the matter to a valuation officer contemplated under Section 50C of the Act, rather than proceeding to assess the capital gain on the basis of the valuation made by the District Sub-Registrar. He added that this submission was specifically made before the learned Tribunal but the learned Tribunal chose to reject the prayer for technical reasons. He submitted that there has been total miscarriage of justice. In case the valuation made by the Assessing Officer is to be accepted, the resultant effect will be that the assessee lost both the property and the money value thereof. He, as such, submitted that the order under challenge should be set aside and the matter should be referred to the valuation officer.;