2022 (4) TMI 802 - AT - Income Tax

Capital gain computation - STCG - FMV determination - AO completed the assessment by taking into consideration of SRO s value as per section 50C - HELD THAT - Case of the assessee is that before the DVO, when the assessee has asked specifically the sale instances locally where the land and building is situated, without giving any such information, the DVO has determined the value of the property is not correct. We find that nowhere the assessee has stated that the sale consideration cannot be applied at Rs..7,10,00,000/- due to difficulties in the property such as no approach road, litigation, or any other reason neither before the DVO nor before the Assessing Officer or before the ld CIT(A) or even before the Tribunal. Assessee has no reply/explanation as to why the fair market value adopted by the SRO cannot be applied in the case of the assessee. Therefore the objection of the assessee is liable to be rejected. By considering the SRO s value and DVO s report, the Assessing Officer has adopted the SRO s value as per section 50C - in the assessment order, the AO has correctly adopted the fair market value of the land and building at Rs..7,10,00,000/- by invoking the provisions of section 50C and the ld. CIT(A) has rightly confirmed the assessment order. Hence, we find no reason to interfere with the order passed by the ld. CIT(A). Thus, the ground raised by the assessee is dismissed. Rectification u/s 154 - CIT(A) has omitted to consider the valuation report of M/s. D. Parthasarathy Associates, a chartered engineer, which was submitted during the course of hearing is a mistake apparent in the ld. CIT(A) s order and prayed for rectification - HELD THAT - CIT(A) has rejected the above contention of the assessee on the ground that the assessee has not filed any application under Rule 46A of Income Tax Rules, 1962 in relation to the admission of additional evidence. The assessee has also not filed any evidence of having filed an application under Rule 46A of the IT Rules before the ITAT. Thus, the ground raised by the assessee is dismissed.

Summary

Issues:
1. Appeal against orders of the ld. Commissioner of Income Tax (Appeals) under section 143(3) and section 154 of the Income Tax Act, 1961.
2. Correctness of sale consideration for determining capital gains.
3. Consideration of SRO value and DVO's report for determining fair market value.
4. Rejection of rectification petition under section 154 based on additional evidence submission.

Analysis:
1. The appeals were filed against orders of the ld. Commissioner of Income Tax (Appeals) for the assessment year 2013-14. The Assessing Officer noted a variance in the sale consideration of a property, prompting a review under section 50C of the Act. The Assessing Officer adopted the SRO value for determining capital gains, which was contested by the assessee citing lack of consideration of local sale instances. The DVO's valuation supported the SRO value, leading to the confirmation of the assessment order by the ld. CIT(A) and subsequent dismissal of the appeal by the Tribunal.

2. The main contention revolved around the correctness of the sale consideration used for calculating capital gains. The assessee argued for considering local sale instances, but the Assessing Officer and subsequent authorities relied on the SRO value and DVO's report. The Tribunal upheld the adoption of the SRO value as per section 50C of the Act, emphasizing the absence of valid reasons from the assessee to deviate from this valuation method.

3. The Tribunal's decision was based on the consideration of the SRO value and the DVO's report for determining the fair market value of the property. Despite the assessee's request for specific local sale instances, the Tribunal found no substantial reason to reject the SRO value adopted by the Assessing Officer. The adherence to section 50C of the Act in determining the fair market value was deemed appropriate, leading to the dismissal of the appeal against the assessment order.

4. In a separate appeal related to a rectification petition under section 154 of the Act, the assessee sought to introduce a valuation report during the appellate process. However, the ld. CIT(A) rejected this request due to the lack of compliance with Rule 46A of the Income Tax Rules, 1962. The Tribunal upheld the dismissal of the rectification petition, emphasizing the importance of following procedural requirements for introducing additional evidence.

In conclusion, the Tribunal dismissed both appeals filed by the assessee, upholding the assessment orders and rectification petition rejection based on the valuation methods applied and procedural compliance.