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II. Direct Tax Case laws:
1. The Commissioner Of Income Tax
Alld And Anr vs Sh. Chandra Narain Chaudhri, INCOME TAX APPEAL No. - 287
of 2011, Order Date :- 29.08.2013, High Court of Allahabad.
S. 50-C: Extent to which reliance can be placed by AO on stamp duty valuation explained
(i) S. 50-C is a rule of evidence in assessing the valuation of
property for calculating capital gains and is rebuttable. It is well
known that an immovable property may have various attributes, charges,
encumbrances, limitations and conditions. The Stamp Valuation Authority
does not take into consideration the attributes of the property for
determining the fair market value and determines the value in accordance
with the circle rates fixed by the Collector. The object of valuation
by the Stamp Valuation Authority is to secure revenue on such sale and
not to determine the true, correct and fair market value for which it
may be purchased by a willing purchaser subject to and taking into
consideration its situation, condition and other attributes such as it
occupation by tenant, any charge or legal encumbrances;
(ii) If the assessee raises an objection that the value assessed by
the stamp valuation authority u/s 50-C (1) exceeds the fair market value
of the property on the date of transfer, the AO has to apply his mind
on the validity of the objection and may either accept the valuation of
the property on the basis of the report of the approved valuer filed by
the assessee or invite refer the valuation of the capital asset to the
DVO in accordance with s. 55-A. In all these events, the AO has to
record valid reasons, which are justifiable in law. He is not supposed
to adopt an evasive approach of applying the deeming provision without
deciding the objection or referring the matter to the DVO u/s 55-A as a
matter of course without considering the report of the approved valuer
submitted by the assessee.
2. UTI Bank Limited vs. The ACIT
Circle, ITA Nos. 2737/AHD/2006, 236 & 238/AHD/2008, Date of
Pronouncement: 10-09-2013, ITAT – Ahemdabad.
Held that sale & lease transactions by banks are genuine and eligible for depreciation.
S. 32 allows depreciation if the asset is “owned, wholly or partly,
by the assessee and used for the purposes of the business“. There is no
requirement that the asset must be used by the assessee himself. It is
sufficient if the asset is utilized for the purpose of business of the
assessee. The argument, relying on McDowell 154 ITR 148 (SC), that Sale
& Lease Back transactions are a devise for lowering the tax effect
cannot be accepted. Sale & Lease Back transactions are genuine and
cannot be considered to be sham. By virtue of the judgment in Cosmo
Films Ltd 338 ITR 266 (Del), the contrary judgments in Mid East 87 ITD
537 (Mum) (SB) and Induslnd Bank 135 ITD 165 (Mum) (SB) are impliedly
reversed (ICDS Ltd 350 ITR 527 (SC) & Development Credit Bank Ltd
(ITAT Mum) followed).
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