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2024 (2) TMI 787 - AT - Income TaxLTCG accrued on sale of two urban lands - determination of fair market value of the land - grievance of the assessee is that the AO committed patent error in working out sale consideration and indexed cost of acquisition without obtaining report from DVO and rejecting the valuation report furnished by the assessee - HELD THAT - Looking to the totality of the facts and particularly, when the AO had himself referred the matter to the DVO to ascertain the FMV of the land in question and the valuation submitted by the assessee was not accepted, the impugned order is hereby, set aside and the AO is directed to frame the assessment afresh after considering the valuation report submitted by the DVO if any, in accordance with law. Request for admitting the claim u/s 54B not admitted - CIT(A) being the First Appellate Authority ought to have admitted the claim since the judgement of Hon ble Apex Court in the case of Goetz (India) Ltd 2006 (3) TMI 75 - SUPREME COURT do not put any fetters on the powers of Appellate Authority. Moreover, law is well settled that if any, deduction is available under law, same shall be allowed to the assessee. Appeal of the assessee is partly allowed for statistical purposes.
Issues involved:
The judgment involves issues related to the addition of long term capital gain on the sale of urban lands, calculation of fair market value, denial of benefit under section 54B of the Income Tax Act, consideration of notional sale, validity of notice under section 148, proper sanction under section 151, sustaining addition based on doubt, and remand for valuation of agricultural land. Addition of Long Term Capital Gain: The assessee appealed against the addition of Rs. 2,15,03,436 to their income as long term capital gain from the sale of two urban lands. The AO calculated the fair market value contrary to the provisions in the Act, leading to a dispute. The appellant argued that the AO's method of adopting land cost from the Delhi Govt website instead of the District Valuation Officer was erroneous. The Tribunal found that the AO erred in not obtaining a valuation report from the DVO and rejected the appellant's valuation report. The claim for deduction under section 54B was also not admitted, which the Tribunal deemed improper. The matter was remanded to the AO for fresh assessment based on the DVO's valuation report, if available. Denial of Benefit under Section 54B: The appellant contended that the CIT(A) wrongly denied the benefit of section 54B of the Income Tax Act, citing cases to support their claim. The Tribunal held that the CIT(A) should have admitted the claim as there were no restrictions on the Appellate Authority's powers. It was emphasized that if a deduction is available under the law, it should be allowed to the assessee. The issue of deduction under section 54B was remanded to the AO for proper consideration in line with the law. Validity of Notice under Section 148 and Proper Sanction under Section 151: The appellant raised concerns regarding the validity of the notice under section 148, arguing that it did not meet the legal requirements as there was no valid reason to believe for initiating reassessment proceedings. Additionally, it was contended that proper sanction under section 151 was not obtained by the AO. These grounds were not pressed by the appellant during the hearing and were dismissed accordingly. Sustaining Addition Based on Doubt: The appellant challenged the addition on the basis of doubt, arguing that it should be deleted as it was speculative. The Tribunal did not delve into this issue as the matter was remanded for fresh assessment based on proper valuation of the land. The addition was not sustained solely on doubts and conjectures. Remand for Valuation of Agricultural Land: The appellant requested the matter to be remanded back to the Assessing Authority due to the issue related to the valuation of agricultural land. The AO proceeded with the assessment without the valuation report from the DVO, which was awaited. The Tribunal agreed with the appellant's submission, emphasizing the principle of natural justice, and directed the AO to reframe the assessment after considering the DVO's valuation report, if available. This judgment by the Appellate Tribunal ITAT Delhi addressed various issues including the addition of long term capital gain, denial of benefit under section 54B, validity of notice under section 148, sustaining addition based on doubt, and remand for valuation of agricultural land. The Tribunal set aside the impugned order, directing the AO to reframe the assessment based on proper valuation reports and considerations in accordance with the law.
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