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Income Tax Appellate Tribunal, BANGALORE BENCHES “B”, BANGALORE
Before: Shri George George K, JM & Ms.Padmavathy S, AM
Before Shri George George K, JM & Ms.Padmavathy S, AM Sri.Abdul Azeez The Deputy Commissioner of No.192, Kappagal Road Income-tax, Circle 1 v. Gandhinagar Bellary. Bellary 583 103 PAN : ABKPA2333D. (Appellant) (Respondent) Appellant by : Sri.Hemanth N.P., Advocate Respondent by : Sri.Manjunath Karkihalli, CIT-DR Date of Pronouncement : 21.10.2022 Date of Hearing : 20.10.2022 O R D E R
Per George George K, JM :
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 11.07.2022. The relevant assessment year is 2008-2009.
The grounds raised read as follows:
“1. On the facts and in the circumstances of the case, the order of CIT(A) I Bangalore, vide order dated: 11.07.2022 for the assessment year 2008-09, is bad in law and liable to set aside .
2. On the facts and in the circumstances of the case, the CIT(A) has not considered the valuation report submitted, before him in support of appellant claim for relevant assessment year. Thus, without appreciating the above submission made before him, Learned CIT(A) passed the order, which is bad in law. Hence, the order passed by CIT(A) is liable to set aside, in the interest of justice.
3. On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that, the valuation report given by the valuation officer, the value of property of Rs. 25,00,000/- Sri Abdul Azeez and other the property for the Sqft.35,175. Which was ignored intentionally and upheld the order of Assessing Officer, is incorrect. Thus, the order of CIT(A) is not sustainable in law and liable to quash.
4. On the facts and in the circumstances of the case, the adoption of valuing property by Assessing Officer is not correct and the CIT(A) with appreciating the valuation office report for relevant assessment year 2008-09 and passed order is not maintainable in law and liable to delete.
5. On the facts and in the circumstances of the case, the CIT(A) was failed to appreciate that, the valuation of property was declared by the appellant are correct for relevant property, and even then, then, the valuation report the CIT(A) at least should have adopted. The valuation report which given under Income Tax Act, instead of upholding the assessing officer order. These blindly passed order of the CIT(A) is against law, and thus order is not in bad faith. Thus, the order of CIT(A) is liable to quash, in the interest of justice.
6. With produce the levied tax and interest, and same is upheld by the CIT(A) is excessive and arbitrary and liable to delete, in the interest of justice and equity. For such other grounds may urged at the time of hearing and allow the appeal in the interest of justice and equity.”
The brief facts of the case are as follows: The assessee an individual had sold certain properties. The assessment was completed by the A.O. invoking the provisions of section 50C of the I.T.Act and making addition of Rs.41,83,801. The A.O. observed that the stamp duty value / guidance value was more than what has been reflected in the sale deed. Accordingly, for the purpose of calculation of capital gain, the stamp duty value was to be adopted. The CIT(A) confirmed the view taken by the A.O. On further appeal, the Tribunal restored the matter to the A.O. with the following observation:-
Sri Abdul Azeez “……..I se aside the order of CIT(A) and restore the matter back to the file of AO for fresh decision with the direction that AO should obtain valuation report from DVO u/s 50C(2) and then decide the issue afresh after affording adequate opportunity of being heard to the assessee……..”
The Assessing Officer, pursuant to the remand by the ITAT, referred the matter to the Valuation Officer vide his letter dated 01.06.2018. The A.O. completed the assessment prior to the receipt of valuation report, since assessment was getting time barred (It is alleged that valuation report was delayed due to non-cooperation on the part of the assessee). Aggrieved, the assessee filed appeal before the first appellate authority. Before the first appellate authority, the learned AR submitted that the DVO’s report was available on record and the value mentioned in the DVO’s report may be adopted for computing capital gains (DVO’s report dated 29.03.2019). The CIT(A), however, rejected the appeal of the assessee by observing that there was non-cooperation on the part of the assessee, consequently, the valuation report could not be filed within the time limit for completing the assessment.
Aggrieved, the assessee has filed the present appeal before the Tribunal. Copy of the valuation report dated 29.03.2019 and the earlier order of the Tribunal dated 13.03.2018 are placed on record. The learned AR by placing reliance on the order of the Mumbai Bench of the Tribunal in the case of Late Smt.Bhanuben Dhanji Shah v. DCIT in (order dated 22.08.2022) submitted that the DVO’s report being available when the appeal was Sri Abdul Azeez disposed of, the CIT(A) ought to have taken note of the same, especially when his power is co-terminus with that of the A.O.
The learned Departmental Representative submitted that the assessee has been non-cooperative with the Revenue. Even the DVO’s report could not be submitted before the A.O. within the time limit of completion of assessment only on account of non-cooperation on the part of the assessee. Therefore, it was submitted the appeal of the assessee may be rejected.
We have heard rival submissions and perused the material on record. The Tribunal in its earlier order dated 13.03.2018 in had restored the matter to the A.O. directing him to obtain DVO’s report u/s 50C(2) of the I.T.Act and decide the issue after affording adequate opportunity of hearing to the assessee. Pursuant to the ITAT’s order, the A.O. referred the matter to the DVO vide his letter dated 01.06.2018. The valuation report was submitted late due to non-cooperation of the assessee. Therefore, the assessment was completed prior to the submission of the DVO’s report.
Before the CIT(A), the DVO’s report was on record, however, the CIT(A) did not take into consideration the same by stating that the DVO’s report could not be submitted before the time limit for completion of the assessment order on account of non-cooperation on the part of the assessee. We are of the view that the stand taken by the CIT(A) is not correct. When the DVO’s report was available when the Sri Abdul Azeez appellate proceedings were pending, he ought to have taken note of the same, especially when his powers are co-terminus with that of the A.O. The Mumbai Bench of the Tribunal in the case of Late Smt.Bhanuben Dhanji Shah v. DCIT (supra) had restored the matter to the A.O. in such a scenario to take into consideration the DVO’s report and to adjudicate the matter afresh in accordance with the terms of the report submitted by the DVO. The relevant finding of the Mumbai Bench of the Tribunal, reads as follows:-
“8. We have considered the rival submissions and perused the material available on record. We find that on 26/06/2014, the Asstt. Valuation Officer, Valuation Cell, Income Tax Department, Thane, had prepared valuation report under section 55A / 50C of the Act determining fair market value of the property namely Power Loom Gala, MH1441, Near Kaneri, Bhiwandi, as on 30/12/2005, at Rs.7,10,000. As per the assessee, the report from the aforesaid Department Valuation Officer, was sought by the learned CIT(A) during the pendency of its appeal. Since the impugned addition under the head “Long Term Capital Gain”, which was upheld by the learned CIT(A), has been made on the basis of value determined by the Registration Authority without taking into consideration the report of the Department Valuation Officer, we deem it fit and proper to restore this issue to the file of the Assessing Officer for de novo adjudication. The Assessing Officer is directed to compute the capital gains after considering the value, as determined by the Department Valuation Officer. As a result, grounds no.1, 2 and 3, raised in assessee’s appeal are allowed for statistical purpose.”
In view of the above order of the Tribunal, we restore the matter to the files of the A.O. The A.O. is directed to consider the DVO’s report and compute the capital gain after considering the value as determined by the DVO. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.