2018 (10) TMI 1893 - AT - Income Tax

Addition of capital gain - AO adopted guideline value of the land and assessed Long Term Capital Gain under section 50C - HELD THAT - Before the ld. CIT(A), the assessee has raised a specific ground that the Assessing Officer should take the value fixed by the Valuation Cell of IT Department and rework the long term capital gain of the co-owners. However, we find that the ld. CIT(A) has erroneously taken the sale consideration at ₹.52.66 crores and wrongly concluded that the valuation adopted by the DVO of ₹.48.99 cores was less than the sale consideration returned by the assessee and accordingly directed to accept the returned income. Since the DVO value of ₹.48.99 crores is more than the sale consideration of ₹.32 crores, we set aside the order of the ld. CIT(A) and direct the Assessing Officer to adopt the DVO value of ₹.48.99 crores as sale consideration for the purpose of computation of long term capital gain. Thus, the ground raised by the Revenue is allowed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Deletion of addition of long term capital gains by the ld. CIT(A).

Analysis:
1. Condonation of Delay:
The appeal filed by the Revenue challenged the condonation of delay in filing the appeal by the assessee of 275 days without a speaking order. The ld. DR did not present any arguments during the hearing on this issue. Consequently, the ground raised by the Revenue regarding the condonation of delay was dismissed as not pressed.

2. Deletion of Addition of Long Term Capital Gains:
The case involved the sale of property at a price significantly lower than the guideline value, leading to a dispute over the computation of long term capital gains. The Assessing Officer initially adopted the guideline value as the sale consideration due to the difference between the sale value and guideline value. The ld. CIT(A) deleted the addition of long term capital gains after considering the submissions and facts of the case, accepting the long term capital gains declared by the assessee in the return of income. However, the Revenue contended that the ld. CIT(A) wrongly assumed the sale consideration returned by the assessee and should have adopted the DVO value for computing long term capital gains. The Tribunal found that the DVO value was higher than the sale consideration returned by the assessee, leading to the setting aside of the ld. CIT(A)'s order. The Tribunal directed the Assessing Officer to adopt the DVO value as the sale consideration for the computation of long term capital gain, thereby allowing the ground raised by the Revenue.

In conclusion, the appeal filed by the Revenue was partly allowed, with the Tribunal addressing both the issue of condonation of delay and the deletion of addition of long term capital gains in the assessment.