AJIT RAVINDRA DONDE,NASHIK vs. ITO, WARD 1(1), NASHIK, NASHIK

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ITA 1184/PUN/2026Status: DisposedITAT Pune17 June 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that when there is a difference between the sale consideration and the stamp duty value, the AO should refer the matter to the Departmental Valuation Officer (DVO) for valuation. The Tribunal cited a High Court judgment emphasizing the DVO's role to prevent miscarriage of justice.

What were the facts?

The assessee sold plots and offered capital gains. The Assessing Officer (AO) invoked Section 50C, considering the stamp duty value higher than the sale consideration, and disallowed claimed cost of improvement due to lack of evidence. The CIT(A) confirmed these additions.

What were the issues?

Whether the AO correctly invoked Section 50C without referring the valuation to the DVO, and whether the disallowance of cost of improvement was justified without proper valuation.

Which sections of the Income-tax Act were involved?

Section 50C,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Respondent: Shri Arvind Renge

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Assessee against the order of the Learned Additional/Joint Commissioner of Income Tax (Appeals), Agra [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2017-18 on 30.06.2025, emanating from the Assessment Order u/s 143(3) of the Act, dated 15.10.2019.

2.

There was delay in filing of the appeal. We have perused the affidavit and are convinced that there was sufficient cause for delay. Accordingly, delay condoned.

3.

Findings and analysis: 3.1 None appeared for the Assessee on the date of hearing. No adjournment letter was filed. Therefore, we proceed ex-parte qua the Assessee. We have heard the Ld. DR and perused the records. In this case the facts filed by the Assessee in the statement are as under :

ITA No.1184/PUN/2026

ITA No.1184/PUN/2026

ITA No.1184/PUN/2026

3.2 In this case, the Assessee had sold Plot No. 26 and 27 during the year and offered capital gain, however, the Assessing Officer noted that the value adopted by the stamp authorities for levying stamp duty was more than the sale consideration by the Assessee. Therefore, the Assessing Officer invoked the provisions of section 50C of the Act and recalculated the capital gain considering the value of plot taken by the stamp authority. The Assessee had claimed certain cost of improvement which the Assessing Officer rejected as the Assessee could not file evidences. The Ld. CIT(A) confirmed the addition. It is a fact that the Assessing Officer had invoked the provisions of section 50C of the Act. Whenever, there is a difference in the value adopted by the stamp authority for the purpose of levying stamp duty and the actual cost mentioned in the agreement the Assessing Officer should have referred the issue to the DVO for valuation. In the statement of facts, the Assessee has pleated that value of plot is less than the value adopted by the stamp authority because of the pending litigation.

4.

The Hon’ble Kolkata High Court in the case of Sunil Kumar Agarwal vs. CIT 372 ITR 83 has held as under : Quote, “6. For the aforesaid reasons, we are of the opinion that the valuation by the DVO, contemplated under s. 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub-Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the AO, discharging a quasi-judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. 10. For the aforesaid reasons, the order under challenge is set aside.” Unquote.

5.

Accordingly, respectfully following the decision of the Hon’ble High Court (supra), we direct the Assessing Officer to refer the issue for valuation to DVO. Accordingly, the assessment order is set aside for de- novo adjudication of the issue of capital gain. The Assessee shall be at liberty to file the details, if any. The Assessing Officer shall provide the opportunity of hearing to the Assessee.

ITA No.1184/PUN/2026

6.

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

Order pronounced in the open Court on 17th June, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER

पुणे/Pune; दिन ांक/Dated : 17-06-2026 Ravi Kumar Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.06.18 10:48:00 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘SMC’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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