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2021 (4) TMI 865 - AT - Income TaxCapital gain computation - CIT(A) directing to adopt the value determined by the DVO as against the value determined by the Stamp Duty Authority - HELD THAT - We find on perusal of the CIT(A) order, at the time of assessment the assesse has agitated the applicability of provisions of Sec. 50C of the Act for adopting the value determined by the registering authority, therefore the matter was referred to the departmental valuation officer (DVO) as per Sec. 55A(a). Whereas,the DVO report was not received in the assessment proceedings and the assessment order was passed u/s 143(3) of the Act on 27.12.2016. Subsequent to the assessment order, the assesse has filed an appeal on 24.01.2017 with the CIT(A). As per the observations of the CIT(A) the DVO report dated 10.03.2017 was sent to the A.O only after completion of assessment.The value determined by the DVO is ₹ 1,61,13,000/-.We find that the powers u/s 251 of the Act of the CIT(A) are co terminus with the A.O. therefore, the CIT(A) considered the provisions of law, DVO report and relied on the Hon ble Tribunal decisions and granted relief to the assessee. We find that the CIT(A) has considered the judicial decisions and passed reasoned order, which cannot be interfered and accordingly we uphold the same and dismiss the grounds of appeal of the revenue.
Issues:
1. Discrepancy in property valuation between Stamp Duty Authority and DVO. 2. Opportunity for AO to comment on DVO valuation. 3. Applicability of Sec. 50C of the Income Tax Act, 1961. 4. Judicial precedents supporting DVO valuation over registering authority. Issue 1: Discrepancy in property valuation between Stamp Duty Authority and DVO: The appeal was filed by the revenue against the CIT(A)'s order directing the adoption of the value determined by the Departmental Valuation Officer (DVO) over the Stamp Duty Authority's valuation. The Revenue contested the significant difference in values, questioning the lack of discussion on the merits of the DVO's valuation. The CIT(A) relied on judicial decisions and ordered the AO to adopt the DVO value, leading to relief for the assessee. The Tribunal upheld the CIT(A)'s decision, noting that the DVO report was received after the assessment order was passed, and the CIT(A) acted within the powers granted under Sec. 251 of the Act. Issue 2: Opportunity for AO to comment on DVO valuation: The Revenue argued that the AO was not provided an opportunity to comment on the DVO valuation before the CIT(A) directed its adoption. However, the CIT(A) considered the provisions of law, DVO report, and relevant judicial decisions before granting relief to the assessee. The Tribunal found that the CIT(A) passed a reasoned order based on existing material and upheld the decision, dismissing the grounds of appeal raised by the revenue. Issue 3: Applicability of Sec. 50C of the Income Tax Act, 1961: The case involved the application of Sec. 50C of the Income Tax Act, 1961, concerning the determination of long-term capital gains based on property valuation. The AO had applied Sec. 50C due to the variance between the sale consideration reported in the deed and the market value. The CIT(A) directed the AO to adopt the DVO value, which was lower than the registering authority's value, in line with the provisions of the Act and relevant judicial precedents. Issue 4: Judicial precedents supporting DVO valuation over registering authority: The CIT(A) relied on various judicial precedents, including decisions from different ITAT benches and High Courts, supporting the adoption of DVO valuation over the registering authority's valuation for computing capital gains. The Tribunal noted the consistency in these judgments and upheld the CIT(A)'s decision to follow the DVO valuation, emphasizing the binding nature of the DVO report on the AO unless glaring mistakes are demonstrated by the assessee. In conclusion, the Tribunal partially allowed the appeal, affirming the CIT(A)'s order to adopt the DVO valuation for determining the long-term capital gains and dismissing the revenue's appeal. The decision was based on a thorough analysis of the legal provisions, judicial precedents, and the procedural aspects of the case.
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