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2024 (5) TMI 842 - AT - Income TaxLTCG - Addition u/s 50C - property sold by the assessee company was litigated property - difference between the valuation adopted by the Stamp Valuation Authority or that declared by the appellant - assessee in the details filed in Income Tax Return did not consider the Jantri Value in computation of gain - HELD THAT - Issue decided in favour of assessee as relying on Bhojison Infrastructure Pvt. Ltd. 2023 (3) TMI 116 - ITAT AHMEDABAD wherein on perusal of the records it can be seen that in the return of income in respect of land and the value as determined by the DVO is approximately 8.95% higher but less than 10%. This was never disputed or controverted by the Revenue at any point of time. As per third proviso to Section 50C brought on statute w.e.f. 01.04.2019, the Tribunal on various occasions has applied the said proviso retrospectively as the difference is less than 10% in the actual value taken than the DVO s value. Assessee ground is allowed.
Issues Involved:
1. Validity of notice issued u/s 148 for reopening the assessment u/s 147 and passing the order u/s 144 r.w.s. 147. 2. Addition on account of Long Term Capital Gain (LTCG) u/s 50C. Judgment Summary: Issue 1: Validity of Notice for Reopening Assessment The appellant challenged the validity of the notice issued u/s 148 for reopening the assessment u/s 147, as well as the order passed u/s 144 r.w.s. 147. The appellant argued that the reopening was based on borrowed satisfaction without tangible material or independent evidence, which was not in accordance with the law. However, the Ld. CIT(A) confirmed the action of the Ld. AO in issuing the notice and passing the order under these sections. Issue 2: Addition on Account of LTCG u/s 50C The Ld. CIT(A) confirmed an addition of Rs. 85,860 out of a total addition of Rs. 3,43,960 on account of LTCG u/s 50C, as made by the Ld. AO. The appellant contended that the property was a litigated property, and thus not possible to sell at market rate, arguing that the provisions of section 50C should not apply. The appellant also highlighted that the difference between the valuation adopted by the Stamp Valuation Authority and that declared by the appellant was less than 10%, suggesting that the value declared by the appellant should be accepted. Despite these arguments, the Ld. CIT(A) upheld the addition based on the valuation determined by the District Valuation Officer (DVO) and previous judicial decisions supporting the revenue's stance. The ITAT, referring to a similar case involving Bhojison Infrastructure Pvt. Ltd., where the tribunal allowed the appeal favoring the appellant, found that the appellant's case was directly covered by this decision. The ITAT noted that the difference in valuation was less than 10% and should therefore favor the appellant, leading to the allowance of the appeal. Conclusion: The ITAT allowed the appeal based on the precedent set by the decision in the case of Bhojison Infrastructure Pvt. Ltd., which was similar in facts and issues to the present case. The tribunal directed that the addition made on account of LTCG u/s 50C should be deleted, aligning with the judicial precedents that supported the appellant's position when the valuation difference was less than 10%.
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