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Issues involved:
The issues involved in this case are jurisdictional errors in assessment under section 144, validity of notices u/s 142(1)/143(2), breach of principles of natural justice, determination of short term capital gains on transfer of property, and incorrect valuation under section 50C. Assessment under section 144: The appellant, an individual with income below the taxable limit, had not filed a return of income for the relevant year. The assessment order u/s. 144 was passed by the ITO (HQ)(CIB), Pune, which the appellant challenged on grounds of incorrect name in the order and lack of proper jurisdiction. The appellant contended that the order was invalid due to the incorrect name and lack of territorial jurisdiction, breaching principles of natural justice. The appellant's submissions were not adequately considered, leading to a flawed assessment order. Determination of short term capital gains: The appellant, along with co-owners, received a plot of land as additional compensation, which was later transferred to M/s. Saraswati Developers. The CIT(A) held that the transfer of development rights resulted in short term capital gains, computed based on the full value of consideration and cost of acquisition. The appellant's share of the gains was determined, and the addition made by the AO was restricted accordingly. The CIT(A) decision was based on the lease agreement and development rights transfer, leading to the computation of short term capital gains for the appellant. Jurisdictional errors and validity of notices: The appellant raised jurisdictional issues regarding the assessment framed in the incorrect name and lack of valid notices u/s. 142(1)/143(2). The appellant cited relevant case laws emphasizing the importance of valid notices and jurisdiction based on correct information. It was highlighted that the AO's jurisdiction depends on the issuance of valid notices, and the absence of proper notices rendered the proceedings null and void. Additionally, the failure to issue a valid notice u/s. 143(2) further undermined the assessment process. Incorrect valuation under section 50C: The appellant contended that the valuation under section 50C was incorrect as no opportunity was provided to challenge it. Referring to a specific case law, the appellant argued that the matter should have been referred to a Valuation Officer when objections were raised regarding the valuation. The substitution of actual sale consideration by stamp duty valuation without allowing the appellant to dispute it rendered the AO's order legally flawed. The appellant's argument highlighted the importance of providing opportunities to challenge valuations under section 50C. Conclusion: The appellate tribunal allowed the appellant's appeal, considering the jurisdictional errors, lack of valid notices, incorrect determination of short term capital gains, and flawed valuation under section 50C. The decision emphasized the importance of procedural fairness, correct jurisdiction, and accurate valuation in assessment proceedings. The appellant's contentions regarding jurisdictional issues, valuation discrepancies, and procedural lapses were upheld, leading to the allowance of the appeal.
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