KAREN JUDALINE GODFREY,AUSTRALIA vs. ASST. COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION-1, HYDERABAD

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ITA 1697/HYD/2019Status: DisposedITAT Hyderabad16 November 2021AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that a reference to the DVO under Section 50C(2) is mandatory, even if not raised by the assessee. Since no such reference was made by the lower authorities, the issue of long-term capital gain addition was restored to the Assessing Officer for fresh adjudication after referring to the DVO.

What were the facts?

The assessees sold capital assets for a value lower than the stamp duty value. The Assessing Officer and CIT(A) made additions to long-term capital gains based on the stamp duty value under Section 50C. The appeals were filed with a delay, which was condoned.

What were the issues?

Whether the addition to long-term capital gains based on stamp duty value under Section 50C is valid without a mandatory reference to the DVO. Whether the Revenue's argument that the assessee did not request a DVO reference is valid.

Which sections of the Income-tax Act were involved?

Section 50C,Section 50C(2)

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

O R D E R PER S.S.GODARA, J.M. :

These two assessees’ appeals are for AY.2010-11 arise from the CIT(A)-10, Hyderabad’s order(s) dated 08-10-2018 passed in appeal Nos.0241 & 0242/CIT(A)-10/2017-18, involving proceedings u/s.143(3) r.ws. 147 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case files perused.

2.

It transpires at the outset that this assessee’s instant appeals suffers from 347 days (ITA No.1697/H/19) and 454 days (248/H/20) delay stated to be attributable to the reason(s) beyond their control as per condonation

:- 2 -: & 248/Hyd/20 petition/affidavit. No rebuttal has come from the departmental side. The impugned delay is condoned therefore.

3.

The assessees’ identical sole substantive grievance raised in the instant appeals challenges correctness of both the lower authorities’ action making long term capital gain addition of Rs.66,86,575/- each, after invoking Section 50C of the Act, in the course of assessment and upheld in the CIT(A)’s order. Suffice to say, it is not in dispute that both the lower authorities have gone by the stamp rate of the capital asset transferred by the assessees’ at much lower value after invoking Section 50C of the Act.

4.

Learned departmental representative fails to dispute that neither of the lower authority has made any statutory reference to the DVO u/s.50C(2) of the Act. He vehemently argued that no such reference prayer from assessee’s side came in the course of twin lower proceedings. We find no merit in the Revenue’s instant technical argument. Hon'ble Calcutta high court decision Sunil Kumar Agarwal Vs. CIT (2014) [372 ITR 83] (Cal) holds that Section 50(C)(2) reference to the DVO is mandatory even if the assessee concerned fails to agitate the same before departmental authorities.

5.

Learned authorised representative at this stage stated during the course of hearing that the capital asset sold at the assessees’ behest in the relevant previous year also involved some title dispute and other distressing factors. We therefore restore this sole issue of long term capital gain addition back to the Assessing Officer for his appropriate adjudication after making reference to the DVO as per law. It is made clear that :- 3 -: & 248/Hyd/20 the assessees shall be at liberty to raise all factual/legal pleas in consequential proceedings.

6.

These assessees’ twin appeals are treated as allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 16th November, 2021

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