COMMISSIONER OF INCOME TAX Vs. CHANDNI BHUCHAR

JUDGEMENT

(1.) The instant petition filed by the Revenue under Section 260A of the IT Act, 1961 is directed against the order dt. 27th Feb., 2009 passed by the Income-tax Appellate Tribunal, Delhi Bench (for brevity the Tribunal') in ITA No. 1580/Del/2008 for the asst. yr. 2004-05 in respect of assessee-respondent.

(2.) There is categorical finding recorded by the Commissioner of Income-tax (Appeals) [for brevity 'CIT(A)'] holding that value adopted or assessed by any authority of the State Government for the purpose of payment of stamp duty in respect of land or building cannot be taken as sale consideration received for the purpose of Section 48 of the Act. As against the purchase price disclosed in the sale deed at Rs. 17,06,700, the AO has adopted the purchase price of the property at Rs. 30,32,000, which is assessed for the purpose of paying the stamp duty. Accordingly, it was held that the assessee must have paid Rs. 13,25,300 over and above the purchase price disclosed in the sale deed and the AO made addition of this difference as income from unexplained sources. The CIT(A) deleted this addition by holding that Section 50C is a deeming provision for the purpose of bringing to tax the difference as capital gain. The CIT(A) further held that in the absence of any legally acceptable evidence, valuation done for the purpose of Section 50C would not represent actual consideration passed on to the seller. He placed reliance on the judgment of Allahabad High Court rendered in the case of CIT v. Smt. Raj Kumari Vimla Devi, 2005 279 ITR 360. In that case Allahabad High Court has relied upon the observations made by Hon'ble Supreme Court in the case of Jawajee Nagnatham v. Revenue Divisional Officer, 1994 4 SCC 595 to hold that the basic valuation register prepared and maintained for the purpose of collecting stamp duty could not form the foundation to determine the market value of the acquired land under Section 23 of the Land Acquisition Act, 1894. The burden of proof is always on the claimant to prove such a fact and in each case the prevailing market value as on the date of notification published in the State Gazette under Section 4(1) of the Act has to be proved. The Tribunal also held that valuation done by any State agency for the purpose of stamp duty would not ipso facto substitute the actual sale consideration as being passed on to the seller by the purchaser in the absence of any admissible evidence. The AO is obliged to bring on record positive evidence supporting the price assessed by the State Government for the purpose of stamp duty. The view of the Tribunal is clear from para 7 of the its order, which reads thus:

(3.) Having heard the learned Counsel, we are of the considered view that the view taken by the Tribunal while accepting the order of the CIT(A) does not suffer from any legal infirmity.