If stamp duty is more than the fair market value, reworking of LTCG without referring the matter to valuation officer by the AO is against the mandate of section 50C

If stamp duty is more than the fair market value, reworking of LTCG without referring the matter to valuation officer by the AO is against the mandate of section 50C

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If stamp duty is more than the fair market value, reworking of LTCG without referring the matter to valuation officer by the AO is against the mandate of section 50C

Dev Brat Sharma Vs ITO
If stamp duty is more than the fair market value, reworking of LTCG without referring the matter to valuation officer by the AO is against the mandate of section 50C
– Assessee’s appeal allowed: JALANDHAR ITAT
Whether if assessee raises a claim that the value of stamp duty is more than the fair market value, reworking of LTCG without referring the matter to valuation officer by the AO is against the mandate of section 50C – YES: ITAT
++ as per the mandate of clause (a) of sub-section (2) to section 50C, in case an assessee claims the value adopted by the stamp valuation authority exceeds the fair market value of the property, then it is obligatory for the A.O to refer the matter to a valuation officer for ascertaining the same. However, in the present case, the AO despite a specific objection to the said effect having been raised by the assessee in the course of the assessment proceedings, dispensed with the statutory obligation and failed to refer the valuation of the property under consideration to the valuation officer. Thus, the methodology adopted by the AO for reworking the LTCG not being in accord with the mandate of law, cannot be subscribed. When the AO, despite specific objection raised by the assessee that the value adopted by the stamp valuation authority exceeded the fair market value of the property under consideration, had however failed to refer the matter to the valuation officer for ascertaining the same, the reworking of the LTCG by him not being in conformity with the mandate of law cannot be accepted. As the very mandate of law prescribed under the statute had whimsically been by-passed by the AO, therefore, the consequential addition on the basis of the impugned reworking of the capital gains cannot be sustained. Therefore, the CIT(A) order is set aside.
ITA No. 493/Asr/2018

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