SHRI BHARATH KUMAR HUKAMCHAND RATHI ,BANGALORE vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(2)(1), BANGALORE

PERB.R. BASKARAN, ACCOUNTANT MEMBER:

The appeal filed by the assessee is directed against

order dated 31.8.2017 passed by Ld. CIT(A)-1, Bengaluru

and it relates to assessment year 2014-15. None

appeared on behalf of the assessee even though

adjournment was granted on the last occasion at the

specific request of the assessee. Hence we proceed to

ITA No.89/Bang/2018 Shri Bharath Kumar Hukamchand Rathi, Bangalore Page 2 of 6 dispose of the appeal ex-parte, without presence of the

assessee.

grounds urged by the assessee give rise to following two

issues:

a) Computation of capital gain by adopting sale

consideration as per provisions of section 50C of the

Income-tax Act,1961 ['the Act' for short].

b) Addition of Rs.4.01 lakhs on account of difference in

gross receipts reported in form 26AS and that

declared by the assessee.

the scrutiny proceedings, the A.O. noticed that the

assessee has declared long term capital gain on sale of a

property. The property was sold for a sum of

Rs.1,92,00,000/- and the assessee claimed that his share

is 50% thereon. Accordingly, the assessee adopted the

sale consideration as Rs.93.45 lakhs. The A.O. noticed

that the value determined by the stamp authority was

2.25 crores and accordingly he took the view that the

assessee should have adopted sale consideration as

ITA No.89/Bang/2018 Shri Bharath Kumar Hukamchand Rathi, Bangalore Page 3 of 6 Rs.1,12,50,000/- (being 50% of Rs.2.25 crores) in terms

of section 50C of the Act. When this was confronted with

the assessee, the assessee submitted that the property

sold by him did not have any approach road and is also

away from the main road. Accordingly, the assessee

submitted that the sale consideration declared by him

should be accepted. The A.O. did not accept the

contentions of the assessee and accordingly computed the

capital gain by adopting 50% of the stamp value

attributable to the assessee, which worked out to

Rs.1,12,50,000/-. The Ld. CIT(A) also confirmed the same

by observing that the assessee did not object to the

adoption of stamp duty value.

assessee had, in fact, objected to the adoption of stamp

duty valuation before the AO by stating that the property

sold by him did not have any approach road and is away

from main road. In our view, the above said reply

furnished by the assessee would amount to objection to

the adoption of stamp duty value. In that case, in terms

of section 50C(2) of the Act, the A.O. should have referred

ITA No.89/Bang/2018 Shri Bharath Kumar Hukamchand Rathi, Bangalore Page 4 of 6 the matter of valuation to the DVO. Since the provisions

of section 50C(2) of the Act have not been complied with,

we are of the view that this issue requires fresh

examination at the end of the A.O. Accordingly, we set

aside the order passed by Ld. CIT(A) on this issue and

restore the same to the file of the A.O. for examining the

same afresh in terms of section 50C(2) of the Act. After

affording adequate opportunity of being heard to the

assessee, the A.O. may take appropriate decision in

accordance with law.

being difference between gross receipts declared by the

assessee and that was shown in form 26AS.

record. We notice that the assessee is following cash

system of accounting. The submission of the data before

tax authorities was that his clients, who are following

mercantile system of accounting, might have deducted

TDS on the amount payable by them and hence those

amounts have been reflected in form no.26AS. However,

since the assessee is following cash system of accounting,

ITA No.89/Bang/2018 Shri Bharath Kumar Hukamchand Rathi, Bangalore Page 5 of 6 the amount actually received by him was declared in the

income tax return filed by him. It was also submitted that

the assessee did not receive the difference amount, shown

in form 26AS till the date of completion of the assessment.

However, the above said explanation was rejected by the

tax authorities without making further enquiries in this

regard. In our view, the A.O. should have made necessary

enquiries from the parties who had deducted TDS and

should have taken decision accordingly. In this view of

the matter, this issue also requires fresh examination of

the addition at the end of the A.O. Accordingly, we set

aside the order passed by the Ld. CIT(A) on this issue

also.

treated as allowed for statistical purposes.

Order pronounced in the open court on 29.06.2020

Sd/- Sd/-

(N.V. Vasudevan) (B.R. Baskaran) Vice President Accountant Member

Bangalore, Dated 29th June, 2020. VG/SPS

ITA No.89/Bang/2018 Shri Bharath Kumar Hukamchand Rathi, Bangalore

Page 6 of 6

Copy to:

Asst. Registrar, ITAT, Bangalore.