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Facts
The assessee appealed against the Ld. CIT(A)'s order regarding additions made by the AO under Section 50C for two immovable properties sold. The assessee had requested valuation from the DVO, but the report was received after the completion of the assessment. The assessee also claimed one of the properties to be agricultural land, which was disputed by the Revenue based on the DVO's report indicating it was within municipal limits.
Held
The tribunal restored the issues back to the Assessing Officer for re-adjudication. The AO is directed to consider the DVO's report dated 20.01.2025 for determining the long-term capital gain in respect of both immovable properties. The claim that one property was agricultural land will be re-examined considering its location within municipal limits as per the DVO.
Key Issues
Whether the additions under Section 50C for the sale of two immovable properties were correctly made, considering a DVO report received post-assessment, and whether one property qualifies as agricultural land under Section 2(14)(iii) for capital gains exemption.
Sections Cited
50C, 2(14)(iii), 55A
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
O R D E R This is an appeal filed by the assessee against the order dated 08.08.2024 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2015-2016.
Shri Somnath Choudhury, ld.AR appeared on behalf of the assessee and Shri Somnath Das Biswas, ld. Sr. DR appeared on behalf of the revenue.
It was the submission of the ld.AR that in the course of assessment the AO has made the additions representing 50C value in respect of two immovable properties sold by the assessee. It was the submission that the assessee had requested for valuation of the said properties. It was the submission that before completion of the assessment, the valuation was not received. It was the submission that the valuation has not been received from the DVO on 20.01.2025. The valuation report along with calculation as submitted by the ld. AR is as under :-
It was the submission that the issues may be restored to the file of the AO for readjudcation after applying the values as arrived at by the DVO in his valuation report dated 20.01.2025. It was the submission that as per the sale deed one of the properties was an agricultural land consisting of 45 decimals. It was the submission that the AO may be directed to examine this issue of agricultural land also.
5. In reply, ld. Sr. DR drew my attention to Annexure-3 of the DVO's report wherein the DVO has specifically mentioned that the said property was under municipality area. It was the submission that both the transactions were liable to be long term capital gain. It was fairly agreed by the ld. Sr. DR that the DVO's report has to be considered by the Assessing Officer by adopting the values as determined by the DVO. Ld.Sr. DR also submitted that he had no objection to the issue being restored to the file of ld.AO for readjudication by adopting the valuation as determined by the DVO.
I have considered the rival submissions. Admittedly, the alleged agricultural land as mentioned in the sale deed is as per the DVO under the municipal area, therefore, the claim of agricultural land would no more survive in respect of 43 decimals of land. It has also been argued by the ld. AR that the second property is liable for determining the long term capital gain. It is also noticed that the DVO’s report is dated 20.01.2025 whereas the assessment order is dated 15.03.2023 and the order of the ld. CIT(A) is dated 08.08.2024. This being so, in the interest of justice, the issues in this appeal are restored to the file of the Assessing Officer for readjudication of the long term capital gain in respect of sale of the two immovable properties. The Assessing Officer shall consider the DVO’s report when determining the long term capital gain in respect of the said two immovable properties.