PARVEZ ABDUL KHUDUSH KHAN,MUMBAI vs. THE INCOME TAX OFFICER, MUMBAI

PDF · subscribers
ITA 6489/MUM/2025Status: DisposedITAT Mumbai28 April 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the DVO did not provide sufficient evidence to show that the assessee's objections to the draft valuation report were properly considered and disposed of. Therefore, the matter was set aside to the AO/DVO for reconsideration.

What were the facts?

The assessee sold an immovable property for Rs. 25,00,000, which was less than the stamp duty value of Rs. 46,34,348. The Assessing Officer (AO) proposed to treat the stamp duty value as the sale consideration. The matter was referred to the District Valuation Officer (DVO) who determined the fair market value at Rs. 35,14,000.

What were the issues?

Whether the DVO adequately considered and disposed of the assessee's objections to the draft valuation report before issuing the final report. Whether the fair market value determined by the DVO is acceptable without proper consideration of objections.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH : MUMBAI

Before: HON’BLE JUSTICE (RETD.) SHRI C V BHADANG & SHRI VIKRAM SINGH YADAV

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “SMC” BENCH : MUMBAI BEFORE HON’BLE JUSTICE (RETD.) SHRI C V BHADANG, PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER

ITA No. 6489/Mum/2025 Assessment Year : 2018-19 Parvez Abdul Khudush Khan Income Tax Officer, Collector Chawl, 413, 4th Floor, Tower No. 6, Refinery Gawanpada, vs. Vashi Railway Station Chembur, Mumbai 400074 Commercial Complex, PAN: ADYPK9133H Vashi Navi Mumbai 400703 (Appellant) (Respondent) For Assessee : Abhishek Modi (Virtually present) For Revenue : Shri. Paresh Deshpande Sr. DR (Virtually present) Date of Hearing : 05-03-2026 Date of Pronouncement : 28-04-2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 19-08-2025, pertaining to Assessment Year (AY) 2018-19.

2.

Briefly, the facts of the case are that basis information that the assessee has sold certain immovable property to the tune of Rs. 92,68,696/- during the F.Y. 2017-18, relevant to the A.Y. 2018-19 and the fact that the assessee has not filed his return of income, notice u/s. 148 was issued. In response, the assessee filed his return of income

2 ITA No. 6489/Mum/2025 Parvez Abdul Khudush Khan

declaring the total income of Rs. 2,12,210/-. Thereafter, the notices u/s 143(2) and 142(1) were issued calling for the necessary information and documentation in respect of sale of the immovable property. On perusal of the sale deed, the AO observed that the assessee has sold the property for consideration of Rs. 25,00,000/- as against the stamp duty value of Rs. 46,34,348/- and the assessee was asked to show cause as to why the stamp duty value of the property should not be treated as sale consideration in terms of the provision u/s. 50C of the Act. In response, the assessee submitted that he has purchased the flat way back on 15-01- 2007 and it is empty for last 3 years and even the construction has been carried out from low quality construction material and the current condition of the flat is also not good due to bad construction material used and given the fact that he is unemployed and has no source of income, he has sold the flat by the way of distress sale for a consideration of Rs. 25,00,000/-. The submissions so filed by the assessee were not considered but not found acceptable and the AO proposed the stamp duty value as the sale consideration in terms of provisions of Section 50C and long term capital gains was determined at Rs. 23,21,099/- after allowing the indexed cost of requisition and a show cause was issued to the assessee dated 05- 01-2024. In response, the assessee filed his submission requesting to remand the matter to the district valuation officer (DVO) for determination of fair market value of the flat. The AO, thereafter, referred the matter to the DVO who has submitted his valuation report dated 02-03-2024, wherein, he has determined the fair market value of the flat at Rs. 35,14,000/- and thereafter, considering the said value, the AO finally determined the long term capital gains of Rs. 12,00,751/- and against declared long term capital gains of Rs. 1,86,751/-, the addition of Rs. 10,14,000/- was made under the head “long term capital gains”.

3 ITA No. 6489/Mum/2025 Parvez Abdul Khudush Khan

3.

The assessee thereafter carried the matter in appeal before the Ld. CIT(A). During the appellate proceedings, the assessee reiterated the submissions made before the AO and it was submitted that it was the case of distress sale and therefore, the sale consideration should have been considered by the AO. It was further submitted that the assessee has filed the objections against the draft valuation report so prepared by the DVO and made available to the assessee and the objections so taken have been totally ignored and not dealt with by the DVO while issuing his final valuation report It was further submitted that the DVO has considered certain comparative sale instances of similar situated for arriving at the value of the instant property which had wide variation ranging from Rs. 33,747/- per square meter to Rs. 49,407/- per square meter. It was submitted that the valuation in price per square meter could be due to various factors such as type of building, make of building, condition, interiors and other surrounding factors and it was submitted that the price of one of the flats which was sold on 29-08-2018 at Rs. 33,747/- per square meter be taken as the appropriate comparable sale transaction and where the same is considered, the fair market value would be close to what has been declared by the assessee and addition made by the AO be deleted.

4.

The submission so filed by the assessee was considered but not found acceptable to the Ld. CIT(A). The Ld.CIT(A) stated that from the perusal of the report of the valuation officer dated 02-03-2024, it is evident that the objections raised by the appellant was taken into consideration by the valuation officer before arriving at the value of the property and therefore, when the AO has considered the final valuation report so issued by the DVO, there is no infirmity in the action of the AO in computing the capital gains at Rs 12,00,751/- in terms of section 50C of the Act. Against the

4 ITA No. 6489/Mum/2025 Parvez Abdul Khudush Khan

said order and the findings of the ld CIT(A), the assessee is in appeal before us.

5.

During the course of hearing, the Ld. AO reiterated the submissions made before the Ld. CIT(A) and it was submitted that the assessee has received the preliminary valuation report dated 28.02.2024from the valuation officer and thereafter, the assessee filed his submissions/objections before the DVO on 02-03-2024 and on the same date without considering and disposing off the objections so raised by the assessee, the DVO has issued the final valuation report on 02-03-2024. It was accordingly submitted that the findings of the Ld. CIT(A) that the DVO has considered the objections raised by the assessee are factually incorrect.

6.

The Ld. DR has been heard who has relied on the order passed by the AO. It was submitted that pursuant to the request made by the assessee, the matter was referred to DVO and after carrying out the physical inspection and considering the objections filed by the assessee, the DVO has issued the final valuation report wherein, as against the initial stamp duty value of 46,34,348/-, the DVO has worked out a figure of Rs. 35,14,000/- being the fair market value of the property and which has rightly been considered by the Assessing Officer for the purpose of determination of long term capital gain u/s. 50C of the Act. It was accordingly, submitted that there is no basis to accept the contentions so raised by the Ld. AR and the grounds of the appeal raised by the assessee be dismissed.

7.

We have heard the rival contentions and purused the material available on record. No doubt, the matter was referred to the DVO at the instance of the assessee and pursuant thereto, the draft valuation report

5 ITA No. 6489/Mum/2025 Parvez Abdul Khudush Khan

was issued on 28/02/2024 and against which the assessee filed his objections on 2/03/2024 and on the same date, the final valuation report has been issued. The fact that the final valuation report has been issued on the same date may not the appropriate basis to challenge the said report, at the same time, how the objections so raised are dealt with by the DVO and the reasoning adopted by the DVO is the relevant consideration which needs to be seen. In the instant case, we find that neither in the final valuation report or otherwise, how the objections so raised by the assessee have been disposed off by the DVO are evident. Where the objections have been raised by the assessee, it would have been appropriate where the same are dealt with by the DVO ideally as part of and forming part of the final valuation report or alternatively, where the same has been dealt with separately, there could be some material brought on record which can reasonably demonstrate that such objections have been duly considered and disposed off and the reasoning adopted by the DVO while disposing off such objections is discernable from the records. The same is essential to allay any apprehension in the mind of the assessee in terms of lack of opportunity and non-consideration of the objections so raised to challenge the draft valuation or in terms of non- application of mind by the DVO. Therefore, in the facts and the circumstances of the case, we are constrained to set-aside the matter to the file of the AO/DVO to taking into consideration the objections so raised by the assessee and dispose off the same by way of speaking order after providing reasonable opportunity to the assessee.

8.

In light of the aforesaid, other grounds of appeal have been left open and not adjudicated upon.

6 ITA No. 6489/Mum/2025 Parvez Abdul Khudush Khan

9.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 28-04-2026.

Sd/- Sd/- (JUSTICE (RETD.) C V BHADANG) (VIKRAM SINGH YADAV) PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated: 28-04-2026 Aditi Pandare, Private Secretary Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order

Dy./Asst. Registrar I.T.A.T, Mumbai

More judgments on Section 50C

All 3,223 judgments and leading authorities on Section 50C →

Recent GST High Court judgments

Search GST case law →