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Facts
The assessee sold a property for Rs. 9 lakhs in 2009, which he had purchased in 2007 for the same amount. The District Registrar revalued the property for stamp duty purposes at Rs. 61,67,500/-, noting an existing RCC structure. Based on this information, the AO re-assessed the short-term capital gain, assuming suppressed sale consideration, and completed the assessment under Section 144 read with Section 147.
Held
The Tribunal acknowledged the existence of a structure on the property but ruled that the stamp duty valuation cannot be blindly applied when the assessee claims the structure was deteriorated. The AO erred by not referring the valuation to the Departmental Valuation Officer (DVO) under Section 50C(2). Consequently, the matter was remanded to the AO to refer the valuation to the DVO and provide the assessee an opportunity to present evidence.
Key Issues
The key legal issue was the proper application of Section 50C for determining capital gains, specifically whether the AO was obligated to refer property valuation to a DVO under Section 50C(2) when the assessee disputes the stamp duty valuation due to deterioration of the property.
Sections Cited
50C, 50C(2), 147, 148, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD
Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT
O R D E R PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Thanneru Masthan Rao (“the assessee") feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 21.10.2024 for the A.Y. 2010-11. 2. The assessee has raised the following grounds of appeal :
2 “1. CIT(A) has not examined a weightage of information available on the record and its relevance to this subject matter, just upheld the invocation of u/s 50C Income Tax Act. 1961 u/s 147r.w.s144 and reconfirmed the AO assessment order basing on the remand report called from the concerned AO with some third-party enquiry statements that is purely arbitrary and unlawful as per the Income Tax Act 1961.
CIT(A) and the AO were arbitrary in the re-assessment of the short- term capital gain of the assessee for AY 2010-2011 of amount Rs. 52,67,500/- based on the information obtained via an email from the Sub-