GANGANI JAYA RAJ ,RANGA REDDY vs. INCOME TAX OFFICER, WARD-8(2), HYDERABAD

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.1,05,00,892/-; 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 thereby making the impugned addition.

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.

The Revenue at this stage raised the vehement contention that no such reference prayer came in the course of assessment at these assessees’ behest. We find no merit in the Revenue’s instant technical arguments. Hon'ble Calcutta high court decision Sunil Kumar Agarwal Vs. CIT (2014) [372 ITR 83] (Cal) holds that Section 50(C)(2) a reference to the DVO is mandatory in Sec.50C proceedings even if the assessee concerned fails to agitate the same at the appropriate stage.

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 raised at the assessees’ behest back to the Assessing Officer for his appropriate adjudication after making necessary reference to :- 3 -: 1053 & 1054/Hyd/2019 the DVO as per law. It is made clear that the assessees shall be at liberty to raise all factual/legal pleas in consequential proceedings.