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

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ITA 1054/HYD/2019Status: DisposedITAT Hyderabad04 February 2021AY 2009-104 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. The issue was restored to the Assessing Officer for fresh adjudication with a mandatory reference to the DVO.

What were the facts?

The assessees sold capital assets at a lower value than the stamp duty rate. The Assessing Officer and CIT(A) made additions to the long-term capital gain based on Section 50C of the Income Tax Act.

What were the issues?

Whether the lower authorities erred by not referring the valuation of the capital asset to the DVO as mandated by Section 50C(2) before making additions to capital gains.

Which sections of the Income-tax Act were involved?

Section 50C,Section 50C(2)

AI-generated summary — verify with the full judgment below

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

Before: SHRI A.MOHAN ALANKAMONY & SHRI S.S.GODARA

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

These three assessees’ appeals are for AY.2009-10 arises from the CIT(A)-1, Hyderabad’s order dated 25-02-2019 passed in appeal Nos.0474, 0475 & 0476/16-17/ITO, Ward-8(2), Hyderabad/ CIT(A)-1/Hyd/2018-19, 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 -: 1053 & 1054/Hyd/2019

2.

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.

3.

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.

4.

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.

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 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.

6.

These assessees’ 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 4th February, 2021

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