2009 (12) TMI 671 - AT - Income Tax

Summary

Issues Involved: Valuation of properties for computation of capital gains u/s 50C of the Income-tax Act, 1961 for assessment years 2003-04 and 2004-05.

Assessment Year 2003-04:
The assessee, a private trust, sold a property for Rs. 10 lakhs, while the stamp duty valued it at Rs. 92 lakhs. The Assessing Officer applied section 50C and valued the property at Rs. 92 lakhs. The DVO valued it at Rs. 45,68,300. The assessee contended that valuation should be per Wealth-tax Act, but CIT (Appeals) held that section 50C is mandatory. The assessee sought to submit additional evidence, citing lack of opportunity to rebut DVO's valuation. The DVO considered tenancy encumbrances in valuation. ITAT set aside the issue for reassessment, questioning the valuation methodology and insufficient time for rebuttal.

Assessment Year 2004-05:
Similar to 2003-04, the property valuation issue was set aside for reassessment by the Assessing Officer. ITAT emphasized providing the assessee with a fair opportunity to present evidence and explanations. Both appeals were allowed for statistical purposes, ensuring no prejudice to either party.