2009 (11) TMI 943 - AT - Income Tax

Summary

Issues involved: Determination of short term capital gain u/s 50C of the Income-tax Act, 1961 for assessment year 2006-07.

Summary:
The appeal was filed against the order confirming the computation of short term capital gain at a higher value than declared by the assessee u/s 50C of the Income-tax Act. The Assessing Officer adopted a higher value based on stamp duty authorities' valuation, leading to a significant difference in the capital gain amount declared by the assessee. The assessee objected to this valuation, citing discrepancies in the stamp duty authorities' assessment compared to the market price received. Despite providing a valuation report from a registered valuer supporting a lower value, the Assessing Officer did not accept the objection and made the addition to the capital gain.

Upon appeal, the CIT(A) upheld the Assessing Officer's decision. However, the Appellate Tribunal found that the Assessing Officer should have referred the matter to the DVO for valuation as per the provisions of section 50C. The Tribunal emphasized that when an assessee objects to the value adopted by the stamp valuation authority, the Assessing Officer is obligated to refer the matter to the DVO for fair market valuation. Therefore, the Tribunal directed the Assessing Officer to reevaluate the issue after referring it to the DVO and providing the assessee with a proper opportunity to present their case.

Ultimately, the appeal was allowed for statistical purposes, and the matter was remanded back to the Assessing Officer for a fresh decision in accordance with the law, ensuring due process for the assessee.