MUKESH KISHINDAS BATHIJA ,MUMBAI vs. INCOME TAX OFFICER 16(3)(1), MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL “D” BENCH,
MUMBAI
BEFORE SHRI BEENA PILLAI, JUDICIAL MEMBER
&
SMT.RENU JAUHRI, ACCOUNTANT MEMBER
Mukesh Kishindas Bathija
Flat No. 11,
Vasant Vihar,
14th Road, Khar West,
Bombay- 400052. Vs.
Income Tax Officer 16(3)(1)
Aayakar Bhawan,
Mumbai-400020. थायी लेखा सं./जीआइआर सं./PAN/GIR No:AAKPB0134E
Appellant
..
Respondent
Appellant by :
Shri Haridas Bhat
Respondent by :
Shri Annavaran Kosuri- Sr. AR
Date of Hearing
08.10.2025
Date of Pronouncement
31.10.2025
आदेश / O R D E R
PER RENU JAUHRI [A.M.] :-
This appeal is filed by the assessee against the order of the Learned
Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal
Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 11.06.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2018-19. P a g e | 2
ITA NO. 4935/mum/2025. 2. The grounds of appeal are as follows:
“GROUND I a) On the facts and circumstances of the case, and in Law, The CIT(A) erred in confirming the disregarding of cost of acquisition while calculating the capital gain.
b) On the facts and circumstances of the case and in law the CITA and AO failed to appreciate that:
i The appellant has submitted the Valuation report as on 1/4/2001
for calculation of cost of acquisition.
ii. AO totally disregarded the report without any remarks and did not allow any cost of acquisition.
iii. The calculation of capital gain without allowing deduction of cost of acquisition is bad at law c) Therefore, the value of Rs. 26,20,000 as per the Valuation Certificate of Government approved registered Valuer A.V Shetty and Associates, to be considered as cost of acquisition since the property was acquired on 01
04.1997
GROUND II a) On the facts and circumstances of the case, and in Law, The CIT(A) erred in confirming the value U/s 50C of the disregarding submission of the appellant b) On the facts and circumstances of the case and in law the CITA and AO failed to appreciate that:
i. The property was stressed, entangled with legal case, in dilapidated condition and getting a buyer was impossible at stamp duty valuation.
ii. Due to the defects and problems the same was sold at half the stamp duty valuation.
iii. The purchaser paid the stamp duty on full value without contesting the same.
c) Therefore, your appellant prays that the sales value should be considered as the realized value of Rs.35,50,945/ instead of stamp duty value
Rs.73,58,200/
GROUND III
On the facts and circumstances of the case, and in Law, The CIT(A) erred in confirming the capital gain by taking the value as per 50C disregarding the request of appellant to refer to the valuation officer
The appellant craves leave to add to, alter, and/or amend the above grounds of appeal.”
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ITA NO. 4935/mum/2025. 3. The brief fact of the case are that the assessee filed return for A.Y. 2018-
19 on 27.07.2018 declaring total income of Rs. 15,17,610/-. The case was selected for scrutiny on account of mismatch in stamp duty value ( V) and actual consideration of the immovable property transferred during the year. During scrutiny proceedings, the assessee was asked to explain why V of Rs. 73,58,200/- should not be taken for computing the capital gains instead of the consideration amount of Rs. 35,50,945/- as per the agreement. It was explained by the assessee that the impugned property No. 3, GF, Krishna Kunj-2, Main Avenue Santacruz, Mumbai is a disputed property with litigation pending in the court and was also in a dilapidated condition. Hence the assessee had to sell it at 50% of the V as buyers were not readily available. Ld. AO did not accept the assessee’s explanation and adopted V as the sale value for computing the capital gains. Further, ld. AO did not allow any deduction for cost of acquisition as the assessee could not produce certificate of market value of the property as on 01.04.2001 from the concerned Stamp Registration Officer
[SRO]. Accordingly, capital gains from the impugned transaction was computed at Rs. 72,18,200/-.
Aggrieved, the assessee preferred an appeal before ld. CIT(A).
However, ld. CIT(A) dismissed the assessee’s contentions and upheld the order of ld. AO. Further aggrieved, the assessee has filed an appeal before the Tribunal.
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ITA NO. 4935/mum/2025. 4. Before us, ld. AR made elaborate submissions with regard to both the issues relating to the computation of capital gain i.e i.
Not allowing the cost of acquisition as per valuation certificate ii.
Adoption of V instead of referring the matter to the DVO.
4.2 It has been argued by the ld. AR that since the property had been acquired before 01.04.2001, the value had to be determined as on this date for which a certificate from government approved valuer- M/s. A.V. Shetty and Associates was submitted before the ld. AO. However, Ld. AO did not accept this certificate on the ground that a certificate from concerned
S.R.O. was required to be furnished for ascertaining the value as on 01.04.2001. Therefore, ld. AO proceeded to compute the capital gain by taking the cost of acquisition as ‘Nil’ which is preposterous as the cost of acquisition cannot be Nil under any circumstances.
4.3 Similarly, with regard to the sale consideration, the assessee had submitted copies of the suit pending at the city civil court to demonstrate that the property was disputed. Vide written reply dated 23.02.2020, filed during the course of assessment proceedings, the assessee had submitted that in case the ld. AO does not accept the sale consideration shown by him, the matter be referred to the Departmental Valuation
Officer [DVO] for determination of Fair Market Value. However, ld. AO rejected the assessee’s submissions and computed the capital gains on the V by invoking provisions of section 50C of the Act.
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ITA NO. 4935/mum/2025. 4.2 Ld. AR has further placed reliance on several decisions of the co-ordinate benches on the applicability of section 50C of the Act. Some of the cases relied upon are as under:
Hyderabed "A" Bench, ITA No. 748/Hyd/2019 wherein it has been held as under:
On review of the DVO report, it is evident that the property sold by the assessee was landlocked with no access road, and due to a civil court decree, the assessee's vendors had no legal title, forcing a distress sale to Smt. SR-who alone had access to the road. The assessee's objections citing legal and physical constraints were ignored by both the AO and DVO without any speaking orders.
ii.
M/S Ganesh Benzoplast Limited. vs. Income Tax Offcier, ITAT,
6351/Mum/2017 wherein the co-ordinate bench held as under:
In respect of the addition under section 50C, the assessee contended that the company had become a sick industrial unit with a negative net worth, and the assets were sold under financial distress to reduce costs and repay loans. The asset in question-a depreciable building unit in Chennai-was unused for years and in "A" Bench, ITA No. 1220/Hyd/2016 wherein the co-ordinate bench observed that the assessee sold the property for Rs. 12 crores, while the Sub-