SMT. SUNITA ASHOK KHOT,PUNE vs. INCOME-TAX OFFICER, WARD -2(5), PUNE

आदेश / ORDER PER R.S.SYAL, VP : These two appeals by different but connected assessees arise out of the orders passed by the CIT(A) on 03-10-2019 & 17-10-2019 respectively in relation to the assessment year 2015-16. Since these appeals are based on similar facts and

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common grounds, we are, therefore, proceeding to dispose

them off by this consolidated order for the sake of

convenience.

assessees have filed affidavits giving the reasons for the delay.

We are satisfied with the same. The delay is condoned and the

appeals are admitted for disposal on merits.

Ganpati Jadhav is that she filed her return declaring total

income of Rs.20,76,520/- comprising, inter alia, of long term

capital gain. During the course of assessment proceedings, it

was observed by the Assessing Officer (AO) that the assessee

along with her two sisters, namely, Smt. Sunita Ashok Khot,

the other appellant in this batch of appeals and Smt. Anita

Vishwanath Nayak entered into a development agreement on

17-05-2014 with Magarpatta City Development Company Pvt.

Ltd. in respect of a land admeasuring total area 30R situated at

Sr.No.71/3B, 71/8, 9 etc., at village Mundhwa, Tal. Haveli,

District Pune for a consideration of Rs.2.55 crore. The AO

observed that the assessee had adopted value of land at Rs.17/-

per sq.ft. on the basis of a valuation report given by a

3 ITA Nos.463 & 464/PUN/2020

Government Approved Valuer. On perusal of such report, he

observed that the Valuer had not given any sale instance in the

nearby area. The AO proposed to adopt the market value of

the property at Rs.15/- per sq.ft. as on 01-04-1981 for the

purpose of computation of capital gain. Vide Order Sheet

noting dated 14-12-2017, the assessee agreed for adoption of

the market value at Rs.15/- per sq.ft. as on 01-04-1981 subject

to District Valuation Officer’s (DVO) report. The AO further

observed that the consideration received by the assessee was

Rs.85.00 lakh which itself was shown as sale consideration for

the computation of capital gain. Invoking the provisions of

section 50C of the Income-tax Act, 1961 (hereinafter also

called `the Act’), the AO observed that the stamp value of the

property at Rs.1,35,70,000/- was required to be substituted for

actual amount of full value of consideration. The assessee

agreed for this also, but again subject to rider of substituting it

with the value as determined by the DVO, which is, in fact, in

accordance with section 50C(2) of the Act. For determining

the fair market value of the land at Mundhwa as on the date of

sale, a reference was made u/s.55A/50C(2) to the DVO,

Income-tax, Solapur on 18-09-2017. No Valuation report of

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the DVO was received up to the time close to the lapse of the

time limit for completion of assessment. Since the assessment

was getting time barred, the AO completed the assessment by

taking the value of land at Mundhwa at Rs.1,35,70,000/-

subject to rectification/revision as per the valuation report of

DVO. That is how, the AO computed capital gain at

Rs.1,19,16,650/- from which exemption u/s.54F was allowed

and finally long term capital gain was determined at

Rs.64,94,004/-. The assessee preferred appeal before the ld.

CIT(A), who, for the reasons ascribed in the impugned order,

dismissed the same. Aggrieved thereby, the assessee has come

up in appeal before the Tribunal.

material on record. It is seen that the AO rejected the report of

the Registered Valuer taking the rate of Rs.17 per sq.ft. as on

1.4.1981. He chose a rate of Rs.15 per sq.ft. on ad hoc basis,

which the assessee agreed subject to its substitution with the

value as determined by the DVO. Similar is the position qua

the stamp value taken by the AO as full value of consideration,

which the assessee again agreed for the purposes of

computation of capital gain subject to its substitution with the

5 ITA Nos.463 & 464/PUN/2020

value as per the report of DVO, Solapur. The AO also made a

reference to the DVO for determining the values. As the report

of the DVO was not received till the assessment was getting

time barred, the AO finalised the assessment on the basis of

the ad hoc rate of Rs.15 per sq.ft. and the stamp value. He,

however, mentioned in the order to make necessary

rectification on the receipt of the report of the DVO.

Unfortunately, there is neither any reference to the receipt of

the report of the DVO nor of carrying out any rectification to

align the original computation of capital gain with the values

as per the DVO’s report. This course of action is

impermissible. The contention of the ld. DR that the assessee

did not extend co-operation to the DVO as a result of which

the valuation could not take place, is neither here nor there. It

is trite that even if an assessee does not extend co-operation in

any proceedings under the Act, there are well defined ways

and means to complete the proceedings. Once the assessment

was finalised by expressly agreeing and specifically

mentioning that the computation of capital gain was “subject

to rectification/revision as per valuation report of the DVO”, it

was all the more obligatory on the part of the AO to honour his

6 ITA Nos.463 & 464/PUN/2020

words and do the needful. It is a matter of record that the AO

did not give effect to his own undertaking which was a pre-

condition of the assessee accepting the values proposed by the

AO. In such a scenario, we are unable to countenance the

view taken by the authorities below in the matter of

computation of capital gain. We, therefore, set aside the

impugned order and remit the matter to the file of the AO for

obtaining the report of the DVO as admitted in the assessment

order and then compute fresh amount of capital gain as per law

after allowing adequate opportunity of hearing to the assessee.

Needless to say, the assessee will be at liberty to put across all

the arguments before the AO/CIT(A) which are germane to the

issue under consideration.

appellant in this batch of appeals, is based on identical facts.

Both the sides fairly conceded that the factual matrix of this

appeal is mutatis mutandis similar to that of Smt. Sangeeta

Ganpati Jadhav. Following the view taken hereinabove, we

set-aside the impugned order and remit the matter to the file of

the AO for re-deciding this issue in accordance with our

directions contained in the earlier part of the order.

7 ITA Nos.463 & 464/PUN/2020

purposes. Order pronounced in the Open Court on 23rd February,

2022.

Sd/- Sd/- (S.S.VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 23rd February, 2022 Satish

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to: 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The CIT(A)-3, Pune 4. The Pr.CIT-2, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “B” / 5. DR ‘B’, ITAT, Pune गाड� फाईल / Guard file 6.

आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

8 ITA Nos.463 & 464/PUN/2020

Date 1. Draft dictated on 21-02-2022 Sr.PS 2. Draft placed before author 22-02-2022 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *