SRI VELURI MADHUKAR, ,RAJAHMUNDRY vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1),, RAJAHMUNDRY

All the grounds of appeal are related to the valuation of property for the purpose of section 50C of the Income Tax Act, 1961 (‘Act’ in short).

Brief facts of the case are that the assessee filed the return of income declaring total income of Rs.6,95,250/- and the assessment was completed on total income of Rs.11,03,450/- and the Assessing Officer(AO) raised the demand of Rs.2,03,990/-.During the assessment proceedings, the AO found that there was a difference in valuation of property adopted by SRO and the sale consideration admitted by the assessee. Against the market value of Rs.43,80,750/-, the sale consideration admitted was Rs.25,00,000/-. Therefore, the AO referred the valuation to the valuation cell, wherein the DVO had valued the property at Rs.37,23,600/-. The AO called for objections of the assessee and after considering the objections filed by the assessee in respect of the valuation of the property, the AO rejected the objections and adopted the value as determined by the DVO at Rs.37,23,600/- and taxed 1/3rd share of Rs.37,23,600/- at Rs.12,41,200/- for the purpose of capital gains.

Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) issued notice to the assessee on 4 occasions on

Against the order of the Ld.CIT(A), the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that the Ld.CIT(A) dismissed the appeal of the assessee without going into the merits inspite of raising various grounds, therefore requested to remit the matter back to the file of the Ld.CIT(A) for adjudication of appeal on merits.

On the other hand, the Ld.DR supported the orders of the lower authorities.

We have heard both the parties and perused the material placed on record. We observed from the Ld.CIT(A) order that the Ld.CIT(A) has given sufficient opportunity to the assessee before disposal of appeal and the assessee did not respond to the notices given by the Ld.CIT(A). We cannot appreciate the attitude of the assessee for not responding to the notices issued by the Ld.CIT(A). However, though the Ld.CIT(A) permitted to pass the order ex-parte, she has to examine the case on merits and decide the

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