VEENA OJHA THROUGH L/H SUDHAKAR OJHA,GORAKHPUR vs. DC/ACIT (2), GORAKHPUR

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ITA 232/VNS/2024Status: DisposedITAT Varanasi20 July 2026AY 2017-20184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the AO and CIT(A) failed to refer the matter to the DVO as required by Section 50C(2) when the assessee disputed the stamp duty valuation. The impugned order was set aside.

What were the facts?

The assessee's income was assessed based on the circle rate for capital gains, despite the assessee providing a valuer's report. The lower appellate authority dismissed the appeal without considering the merits.

What were the issues?

Whether the AO and CIT(A) erred by not referring the property valuation to the DVO when the assessee disputed the stamp duty valuation and provided an alternative valuation report.

Which sections of the Income-tax Act were involved?

Section 50C,Section 50C(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VARANASI CIRCUIT BENCH, VARANASI

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

For Appellant: Shri Arvind Shukla, Advocate
For Respondent: Shri Sudipta Paul, Sr. DR

PER KUL BHARAT, VICE PRESIDENT.:

The present appeal has been filed by the assessee against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals)-6, Delhi dated 25.07.2024, pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -

“1. Because the learned JCIT(A) has erred in law as well as on facts in dismissing the appeal by misconstruing the provisions of law and also by not appreciating the facts and circumstances of the case in the correct legal perspective 2. Because the learned JCIT(A) has erred in law as well as on facts in not appreciating that the AO had not followed the correct procedure prescribed u/s 56(2) by not referring the matter to DVO when the assessee had disputed the stamp duty valuation duly supported by approved valuer's report.

ITA. No. 232/VNS/2024 Page 2 of 4 3. Because the authorities below have acted against the clear provisions of law by not referring the matter to DVO and hence the addition made deserves to be deleted. 4. Because the learned JCIT(A) has erred in law as well as on facts in has incorrectly observed that the assessee has not disputed the stamp duty valuation whereas this fact is very clearly mentioned at several places in the statement of facts, AO’s order as well as in the order of learned JCIT(A).” 2. The facts in brief are that in this case, the assessee is an individual filed her return of income on 28.03.2018 showing total income at Rs.23,75,460/-. Thereafter, the case was selected for under Computer-Assisted Scrutiny System (CASS). During the course of hearing, the assessee Smt Veena Ojha expired on 26.09.2019 and her legal heir Sri Sudhakar Ojha was substituted. Subsequently, the Assessing Officer (“AO”, for short) invoked provisions of Section 50C of the Income Tax Act, 1961 (“Act”, for short) and assessed capital gain on the basis of circle rate notified by the Stamp Valuation Authority. Thus, he made an addition of Rs.43,94,000/- on that account. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee without adverting on the merits of the case. Now, the assessee is in appeal before this Tribunal.

3.

Apropos to the grounds of appeal, the Ld. Authorized Representative for assessee contended that the Ld. CIT(A) failed to appreciate the facts in right perspective and without adverting to the merits of the case proceeded to dismiss the appeal. He further submitted that the Assessing Authority as well Ld. CIT(A) did not refer the matter to the Departmental Valuation Officer (DVO) for ascertaining the correct market value of the property. Even, the Ld. CIT(A) failed to consider the value of property furnished during the appellate proceedings. He drew our

ITA. No. 232/VNS/2024 Page 3 of 4 contention to the provisions of Section 50C of the Act to buttress the contention that once an assessee objects to the adoption of the fair market value of the property as per the circle rate as notified by the Stamp Valuation Authority. In that event, the matter is required to be referred to the DVO for ascertaining the correct fair market value of the property.

4.

On the other hand, the Ld. Departmental Representative for Revenue supported the orders of the lower authorities.

5.

Heard the Ld. Representatives of the parties and perused the materials available on record. We find that the Ld. CIT(A) has noted the facts that the assessee had produced the valuation report of approval valuer. Even before the Assessing Authority, the assessee had submitted a valuation report of the property but the AO without considering the objection of the assessee proceeded to make impugned addition on account of capital gain. There is no ambiguity under the law that if the assessee in terms of Section 50C(2) of the Act objects against the adoption of fair market value as per circle rate, the AO is under statutory mandate to refer the matter to a DVO for ascertaining the correct fair market value. In the facts of the present case, neither the Assessing Officer nor the Ld. CIT(A) referred the matter to the DVO for determination of the fair market value of the property. Therefore, looking to the totality of the facts, the order passed by the authorities below is not in consonance with the mandate of law. We, therefore, set aside the impugned order and restore the assessment to the file of the Assessing Authority to make de novo assessment after calling a valuation report from the DVO as contemplated under section 50C(2) of the Act. The grounds raised by the assessee are partly allowed for statistical purposes.

ITA. No. 232/VNS/2024 Page 4 of 4 In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order deemed to be pronounced under Rule 34(4) of IT(AT) Rules on 20/07/2026.

Sd/- Sd/- [ANADEE NATH MISSHRA] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 20/07/2026 Vijay Pal Singh, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR

By order Sr. Private Secretary

// True Copy//

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