2016 (8) TMI 1381 - AT - Income Tax

Matter not referred to DVO u/s 50C(2) - computation of capital gains - Held that - As held by Hon ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT 2014 (6) TMI 13 - CALCUTTA HIGH COURT , even in the absence of specific request from the assessee, the Assessing Officer has to give an option to the assessee to follow the course provided by law under section 50C(2). Therefore, uphold the grievance of the assessee, and remit the matter to the file of the Assessing Officer for adjudication de novo after referring the matter to the DVO under section 50C(2) - Appeal allowed for statistical purposes.

Summary

Issues: Appeal against CIT(A)'s order for assessment year 2010-11 regarding the addition of capital gain due to stamp duty valuation under section 50C of the Income Tax Act.

Analysis:
1. The primary issue in this case is the adoption of stamp duty valuation by the Assessing Officer for computing capital gains under section 50C of the Income Tax Act. The appellant contended that despite requesting a reference to the Valuation Cell as per section 50C(2), the matter was not referred, leading to the addition of capital gain. The CIT(A) rejected the appeal citing lack of evidence of the request during assessment proceedings.

2. Upon hearing the submissions and reviewing the case, the Tribunal referred to the legal position, specifically the ruling of the Hon'ble Calcutta High Court in Sunil Kumar Agarwal vs. CIT [(2015) 372 ITR 83 (Cal)], which stated that even without a specific request, the Assessing Officer must provide the option to the assessee to follow the procedure under section 50C(2). The Tribunal upheld the appellant's grievance and directed the matter to be remitted to the Assessing Officer for a fresh adjudication after referring the issue to the DVO under section 50C(2).

3. The Tribunal allowed the appeal for statistical purposes, emphasizing the importance of following the legal provisions and ensuring that the assessee's rights are upheld. The judgment highlights the obligation of the Assessing Officer to provide the option for valuation under section 50C(2) and the need for proper adjudication based on the legal framework.

4. The decision of the Tribunal serves as a reminder of the procedural requirements under section 50C of the Income Tax Act and reiterates the significance of following due process to determine capital gains accurately. By remitting the matter for fresh adjudication, the Tribunal ensures that the appellant's rights are protected and that the valuation is conducted in accordance with the law, as mandated by relevant legal precedents.