JAGDAMBA HOSPITALS PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD

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ITA 1469/HYD/2018Status: DisposedITAT Hyderabad15 March 2022AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that a reference to the DVO is mandatory under Section 50C(2) of the Act, irrespective of whether the assessee raised an objection. The lower authorities erred by not making such a reference.

What were the facts?

The assessee's appeal concerns an addition of short-term capital gain of Rs. 2,41,81,423 based on the SRO value of a capital asset. The lower authorities invoked Section 50C(2) of the Income Tax Act without referring the matter to the District Valuation Officer (DVO).

What were the issues?

Whether a reference to the District Valuation Officer (DVO) is mandatory under Section 50C(2) of the Income Tax Act when determining the full value of consideration for the purpose of capital gains.

Which sections of the Income-tax Act were involved?

Section 50C(2)

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Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA & SHRI L. P. SAHU

For Appellant: Smt. S. Sandhya, Adv

O R D E R Per S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2013-14 arises from the Commissioner of Income Tax (Appeals)-2, Hyderabad’s order dt.08.03.2018 passed in case No.10484/CIT(A)-2/Hyd/2017-18 in proceedings under Section 144 r.w.s. 147 of Income Tax Act, 1961 (‘the Act’).

Heard both the parties. Case file perused.

2.

Coming to the assessee's sole substantive grievance that both the lower authorities’ have erred in law and on facts in making short term capital gain (STCG) addition of Rs.241,81,423 after invoking provisions of section 50C(2) of the Act thereby adopting SRO value of the capital asset in issue at Rs.339,22,500; we notice at the outset that neither the Assessing Officer nor the CIT(A) have made any statutory reference to the District Valuation Officer (DVO).

3.

Learned departmental representative vehemently argued before us that such a reference is nowhere mandatory since the assessee had not raised the corresponding objection in either of the lower proceedings. We find no merit in the Revenue’s instant technical argument in light of case law Sunil Kumar Aggarwal Vs. CIT (2015) 372 ITR 83 (Cal) that such a reference is indeed mandatory than based on mere technical aspects. We thus accept assessee's instant sole substantive ground for statistical purposes. The Assessing Officer is directed to DVO as per law. Ordered accordingly.

4.

This assessee’s appeal is allowed for statistical purposes in above terms.

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