NITABAHEN DINESHBHAI BHARWAD,AHMEDABAD vs. THE PCIT, AHMEDABAD -3, AHMEDABAD

The brief facts of the case are that the assessee did not file return of income for the A.Y. 2018-19. The case was reopened under Section 147 of the Act on the basis of information that the assessee had sold a property during the year as a co-owner for a total consideration of Rs.3,70,00,000/-. In response to the notice under Section 148 of the Act, the assessee had filed return which was not verified and hence the return was treated as invalid. In the course of assessment, it transpired that the assessee was 1/8th owner of the property sold, which was purchased by her father in 1986 for a consideration of Rs.30,000/-. The value of the said property as on 01.04.2001 was worked out by applying rate of Rs.526/- per sq. mtr. which was accepted by the Assessing Officer. The assessee had also claimed exemption of Rs.3,03,940/- u/s 54B of the Act which, however, was disallowed by the AO. The assessment was completed u/s 147 r.w.s. 144 of the Act on 27.02.2023 at total income of Rs.4,53,940/-. Subsequently, the case record was called for examination by the Ld. PCIT. He found that the fair market value of the property as on 01.04.2001 was wrongly worked out by applying rate of Rs.526/- per sq. mtr. He found that the jantri rate of the land was revised in the year 2006, as per which the rate of land was Rs.220/- per sq. mtr. whereas the assessee had valued the property as on 01.02.2001 by applying rate of Rs.526/- per sq. 3. Aggrieved with the order of the Ld. PCIT, the assessee is in appeal before us. The following grounds have been taken in this appeal: -

That the Ld. Principal Commissioner of Income Tax-3, Ahmedabad has erred in law and on facts while initiating the proceedings u/s.263 of the I.T. Act, 1961 on the basis of wrong reasons which amounts to change the opinion and therefore, the proceeding itself is bad in law, illegal and void.

That the order passed by ITO, NFAC Delhi u/s.147 r.w.s. 144B of the Income Tax Act, 1961 dated 27.02.2023 after considering all the submissions and inquiry made by him, therefore the order passed was neither erroneous nor prejudicial to the interest of revenue, however Ld. PCIT-3, Ahmedabad has initiated proceedings u/s. 263 of the Income Tax Act, 1961 is against facts on record and requires to be quashed.

Your appellant craves leave to add, alter, amend or drop any of the grounds till the appeal is finally heard and disposed of.”

Shri Jaimin Shah, Ld. AR of the assessee, submitted that the issue of cost of acquisition and the fair market value of the property as on 01.04.2001 was duly examined by the Assessing Officer in the course of assessment proceeding and the FMV of the land was accepted by the Assessing Officer after due application of mind. He submitted that the assessee had filed a valuation report from a Registered Valuer, which was duly considered and taken into account by the Assessing Officer while accepting the valuation as adopted by the assessee as on 01.04.2001. Under the circumstances, it was not open for the PCIT to impose his own views on the valuation report of the Registered Valuer. He submitted that the order of the Assessing Officer was neither erroneous nor prejudicial to the interest of revenue. The Ld. AR also relied upon the decision of Co- 3815 in ITA No.701/Ahd/2025 dated 28.07.2025 and also on the decision of Co-ordinate Bench of Delhi Tribunal in the case of Jitindar Singh Chadha vs PCIT - ITA No.2732/Del/2018 dated 31.12.2018. 5. Per contra, Shri R.P. Rastogi, Ld. CIT DR supported the impugned order of the Ld. PCIT. He submitted that in the course of assessment, the Assessing Officer did not examine the basis of FMV of the property as adopted by the Registered Valuer. He submitted that the Registered Valuer did not give any basis for adopting the value of the property at Rs.526/-per sq. mtr. and the Assessing Officer had accepted the same without application of mind. He submitted that when the jantri value of the property revised in the year 2006 was Rs.220/- per sq. mtr. only, there was no basis to adopt the land value at the rate of Rs.526/- per sq. mtr. in the year 2001. The Ld. CIT-DR submitted that the order of the Assessing Officer was thus not only erroneous and also prejudicial to the interest of the revenue. He, therefore, strongly supported the order of the Ld. PCIT. 6. We have carefully considered the rival submissions. The contention of the assessee is that the matter was duly examined by the Assessing Officer in the course of assessment and the valuation of the land as on 01.04.2001, as disclosed by the assessee, was accepted after due application of mind. The assessee has brought on record copy of the queries made by the AO in the course of assessment as well as the reply filed thereto. It is found that the Assessing Officer had made a query to “Provide details of movable/immovable properties purchased and sold by you during the year.” vide notice under Section 142(1) dated 09.11.2022. The Nitabahen Dineshbhai Bharwad vs DCIT Page 5 of 10

1 The assessee had claimed proportionate indexed cost of acquisition at Rs.43,21,020/- which was on the basis of valuation report dated 18.04.2022 of Government Registered Valuer Shri K.S. Patel. A copy of the said valuation report has been brought on record in the paper-book filed by the assessee. It is found that at Sl. No.27 of the said report, the Registered Valuer had observed that “No any property/comparable sale instance was available so not attached herewith”. Further at sl. No. 29 of the report, the Registered Valuer had valued the land by applying the land rate of Rs.526/- per sq. mtr. which was considered as prevailing market rate as on 01.04.2001. The basis of this valuation was explained by the Registered Valuer as under: - “LAND VALUE: Since the land comparable sale instances for the year 2000-01-02 were not available in sub