Valuation by Departmental Valuation Officer under Section 50C of IT Act, 1961 required only to avoid miscarriage of justice

Income Tax Appellate Tribunal, Kolkata: Explaining the legislative intent behind Section 50 C of the Income Tax Act, 1961, it was held that the valuation by departmental valuation officer, contemplated under Section 50C, was required to avoid miscarriage of justice. Legislature did not intend that capital gain should be fixed merely on basis of valuation to be made by District Sub Registrar for purpose of stamp duty. Legislature had taken care to provide adequate machinery to give fair treatment to citizen/taxpayer. No inference could be made as against the assessee that he had accepted that the price fixed by the District Sub-Registrar was the fair market value of the property. Option ought to be given to assessee to have valuation made by departmental valuation officer contemplated under Section 50C. It was further held that while discharging a quasi-judicial function, the Assessing Officer has the bounden duty to act fairly and to give a fair treatment by giving the assesse an option to follow the course provided by law.

The provision in question seeks to provides that where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration received or accruing as a result of such transfer. Also, the Assessing Officer can make a reference regarding valuation of the property by the Departmental Valuation Officer. [Gouri Shankar Paul v. Income Tax Officer, 2016 SCC OnLine ITAT 5748, decided on 02.09.2016]

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