AVINASH KAUR, AMBALA,AMBALA vs. JAO THE INCOME TAX OFFICER WARD-1, AMBALA, HARYANA

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ITA 1743/CHANDI/2025Status: DisposedITAT Chandigarh03 September 2026AY 2018-20195 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the DVO's valuation of the cost of acquisition as on 01.04.2001 based on circle rates was reasonable and justified, especially when the actual sale consideration was lower than the circle rates. The assessee had also benefited from a lower deemed sale consideration.

What were the facts?

The assessee sold ancestral land plots for Rs. 46.54 Lacs, claiming LTCG of Rs. 3.75 Lacs. However, the stamp duty value was Rs. 113.40 Lacs, and the DVO valued the cost of acquisition as on 01.04.2001 at Rs. 3.52 Lacs based on circle rates.

What were the issues?

The primary issue was the correct valuation of the cost of acquisition for capital gains calculation, specifically whether the DVO's reliance on circle rates for historical valuation was appropriate.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

आदेश / O R D E R MANOJ KUMAR AGGARWAL (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 27.11.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s. 144B of the Act on 22.09.2021. The sole issue that falls for our consideration is assessment of capital gains. Having heard rival

submissions and upon perusal of case records, the appeal is disposed- off as under. 2. During assessment proceedings, it transpired that the assessee sold seven plots of ancestral land for Rs.46.54 Lacs. After claiming indexed cost of indexation, Long-Term Capital Gains (LTCG) were worked out by the assessee at Rs.3.75 Lacs and offered to tax. However, the stamp duty value (SDV) of the plots was shown to be Rs.113.40 Lacs. The assessee, inter-alia, stated that the physical dimensions of the plots was odd and it was difficult to find suitable buyers. The market price was less than the circle rates. The assessee also stated that the correct SDV of the plots was Rs.76.61 Lacs only. The Ld. AO disputed the said sale consideration as well as indexed cost of acquisition for Rs.42.78 Lacs as computed by the assessee. Accordingly, a reference was made to District Valuation Officer (DVO) to determine the fair market value (FMV) on the date of sale as well as cost of acquisition as on 01.04.2001. 3. The report of Ld. DVO was received on 17.05.2021 wherein the rates were stated to be worked out after considering various adjustments as per CBDT guidelines, 2009 for valuation of immoveable properties. The rates were stated to be most suitable rates being based on prevailing rates. The DVO valued sale FMV at Rs.58.70 Lacs which was adopted as well as accepted by the assessee. However, the FMV as on 01.04.2001 was computed by Ld. DVO as Rs.3.52 Lacs based on prevailing circle rates of Rs.250/- per square yards on 01.04.2001. The assessee had valued the cost at Rs.1070/- per square yards. The

assessee also contended that the other properties in the same area were registered at Rs.795/- per square yards. However, by adopting DVO’s rates, Ld. AO computed LTCG of Rs.49.11 Lacs and framed the assessment. 4. Upon further appeal, Ld. CIT(A) confirmed the assessment, inter- alia, on the ground that the assessee benefitted from reduction in sale consideration. Having invoked the statutory mechanism for relief and having received benefit of lower deemed sale consideration, the assessee could not simultaneously challenge the validity of Ld. DVO’s report. The DVO report explicitly stated that the rates were worked out after considering various factors of adjustment for making the rates of properties under consideration most comparable as per CBDT guidelines, 2009. The said guidelines prescribe identifying comparable sales and then applying factors of adjustments. The DVO was a domain expert who physically inspected the property and applied suitable factoring adjustments specifically due to constraint like irregular size, remote location etc. For historical valuations, particularly those dating back to 2001, obtaining reliable and verifiable comparable instances that could be technically adjusted for specific subject property was inherently difficult. In such a scenario, the collector’s rate provides a necessary official, objective baseline which is legally defensible. The Ld. DVO, relying on official records of local authorities for 2001-02, adopted the rates ensuring that the base value was established using government benchmark. Therefore, the assessment was confirmed against which assessee is in further appeal before us.

5.

From the facts, it clearly emerges that the plots of land and unique in the sense that they are irregular in shape and have locational lapses. The same is also evident from the fact that though circle rates of these plots was much higher, the same has been valued by Ld. DVO at much lower values after granting suitable adjustments. The lesser sale consideration has been accepted by the assessee and the assessee stand benefitted to that extent. Applying the same logic, the action of Ld. DVO in applying circle rate to determine FMV as on 01.04.2001 could not be faulted with. When the actual sale consideration is lesser than the circle rates, the determination of cost of acquisition on the basis of circle rates as on 01.04.2001 is quite reasonable and justified. Accordingly, no fault could be found in the approach of lower authorities in assessment of capital gains. We order so. 6. The appeal stand dismissed. Order pronounced on 03rd September, 2026

-Sd- -Sd- (RAJESH DAMODARLAL SHARMA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 03-09-2026

आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH

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