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Issues involved: Challenge to assessment order u/s 143(3) of the Income Tax Act, 1961 on grounds of violation of natural justice, applicability of section 50C of the IT Act, 1961, valuation made by the DVO, and permission to press new grounds of appeal.
Assessment Order Challenge: The appellant challenged the assessment order u/s 143(3) on the grounds of violation of natural justice. The issue revolved around the correctness of the CIT(A)'s order dated 1st December, 2011. The appellant sought to quash the assessment order citing violation of principles of natural justice. Applicability of Section 50C: The dispute centered on the applicability of section 50C of the IT Act, 1961. The appellant contended that the provisions of section 50C did not apply in the case, and thus, the enhancement of the sale proceeds by Rs. 27,40,000/- should be deleted. The Assessing Officer had computed the capital gains invoking section 50C, leading to the appeal. Valuation by DVO: Another issue raised was the valuation made by the DVO, which the appellant argued was not in accordance with the law. The appellant sought a reduction in the value assessed by the DVO and consequently a reduction in the capital gains as well. The dispute arose from the variance in the valuation of the property by the DVO compared to the sale consideration. New Grounds of Appeal: The appellant also sought permission to press new, additional grounds of appeal or modify and withdraw any of the existing grounds at the time of the appeal hearing. This request was made to ensure flexibility in presenting additional arguments or modifying existing ones during the appeal process. The judgment addressed the narrow compass of material facts where the appellant had transferred leasehold rights in a property at a certain price, but the stamp duty valuation differed significantly. The Assessing Officer computed capital gains invoking section 50C, leading to the appeal. The Tribunal considered the factual matrix and legal position of the case. The Tribunal found that a Coordinate Bench decision favored the appellant's case, emphasizing the distinction between ownership rights and tenancy rights in property transfers. It was established that in the present case involving a leasehold property, section 50C did not apply. The Tribunal upheld the grievance of the assessee based on previous decisions and directed the Assessing Officer to adopt the actual sales consideration in the computation of capital gains, providing relief to the appellant. In conclusion, the appeal was allowed in favor of the appellant, and the order was pronounced in the open court on the specified date. The judgment clarified the application of section 50C in the context of leasehold property transfers and provided relief to the appellant based on established legal principles and precedents.
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