ANANDKUMAR MANSUKHLAL PATEL,RAJKOT vs. INCOME TAX OFFICER, WARD-5(2),, RAJKOT

The assessee has raised following grounds of appeal:- “1. The CIT {A} erred in upholding the reopening the assessment under the provisions of section 147 of the Act. The reopening of the assessment is not justified. 2. Without prejudice to ground no 1, The CIT {A} erred in upholding the determining the long term capital gains at Rs 317517 as against Rs 119286 declared by the appellant.”

The fact in brief is that assessee has filed return of income declaring total income at Rs. 2,56,480/-. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 148 of the act on 27th December, 2013. The case was reopened on the reason that assesse has not shown long term capital gain from sale of commercial property as per the provision of section 50C of the act. The assessing officer stated that the assessee had sold an office space for sale consideration of Rs. 4 lacs, however, the stamp valuation authority has adopted the value of the sold property for the purpose of stamp duty at Rs. 5,79,911/-. The assessee has objected the reopening of assessment and the assessing officer has disposed the objection by a speaking order dated 9th June, 2014. During the course of reopened assessment proceedings, the assessee has contended that the fair value of the sold property was not more than amount of sale of Rs. 4 lac received from the buyer of the said property. The assessee has requested the assessing officer to refer the valuation of the sold property to the District Valuation Officer u/s. 50C(2) of the act. Accordingly, the assessing officer has referred the matter to the DVO for determining the fair market value of the impugned sold property u/s. 50C(2) of the act. As per the valuation report received from the DVO, the fair market value of the sold property was determined at Rs. 5,51,000/-. The assesse has objected the valuation report of the DVO on the ground that he has not considered other factors like average sale price in the comparable cases. The assessing officer has not

Aggrieved assesse has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.

We have heard the rival contention and perused the material on record. After perusal of the material on record, we observe that assessee had not disclosed the sale value of property according to the value determined by the stamp valuation authority as contemplated u/s. 50C of the act. Therefore, the action of the assessing officer in reopening the assessment under the provision of section 147 of the act is justified. Accordingly, we do not find any error in the decision of the ld. CIT(A) in sustaining reopening assessment. Accordingly, this ground of appeal of the assesse is dismissed.

Regarding section ground of appeal against decision of ld. CIT(A) in upholding that determination of long term capital gain at Rs. 3,17,517/- as against Rs. 1,19,286/- declared by the assessee, it is noticed that as per request made by the assessee during the course of assessment proceeding, the matter was referred u/s. 50C(2) of the act to the valuation officer for determining the fair market value of the sold property. As per valuation

In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 15-07-2019