SUMANBEN JASHVANTBHAI PATEL,SURAT vs. ACIT, CIRCLE 1(3), SURAT, SURAT

ITA 80/SRT/2025Status: DisposedITAT Surat03 November 2025AY 2017-188 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the report of the Departmental Valuation Officer (DVO), prepared by a technically qualified officer following the procedure under section 55A of the Income-tax Act, carries a presumption of correctness. The Tribunal found that the assessee's registered valuer's report, while from an approved valuer, lacked cogent supporting sale data or contemporaneous evidence to justify the extraordinary variance in valuation. The Tribunal concurred with the CIT(A) that looking at comparable sale instances is the best methodology to estimate the FMV of immovable property. The assessee failed to provide specific sale instances or documentary proof to substantiate the claimed rate of Rs.1,000 per square meter. The DVO's valuation of Rs.33 per square meter was based on an examination of seven contemporaneous sale instances from the same area, duly adjusted for relevant factors. The Tribunal concluded that the DVO's methodology was transparent, evidence-based, and supported by verifiable data, making it the most reasonable and fair estimate. The assessee failed to discharge the onus of substantiating the claimed FMV. Therefore, the order of the CIT(A) was upheld, and the grounds raised by the assessee were dismissed.

What were the facts?

The assessee, Sumanben Jashvantbhai Patel, filed an appeal before the Income-Tax Appellate Tribunal (ITAT), Surat Bench, challenging the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year (AY) 2017-18. The appeal arose from an assessment order passed by the Assessing Officer (AO) under section 143(3) of the Income-tax Act, 1961. The dispute concerns the fair market value (FMV) of two immovable properties sold by the assessee during the year. The assessee claimed the FMV as on 01.04.1981 to be Rs.1,000 per square meter, based on a Government-approved valuer's report. The AO, finding this claim to be excessively high, referred the matter to the Departmental Valuation Officer (DVO) under section 55A. The DVO determined the FMV at Rs.33 per square meter. The Commissioner of Income-tax (Appeals) [CIT(A)] upheld the DVO's valuation, partly allowing the assessee's claim.

What were the issues?

1. Whether the Tribunal had to decide if the fair market value (FMV) of the property as on 01.04.1981, for the purpose of computing long-term capital gains under section 48 of the Income-tax Act, 1961, was correctly determined by the lower authorities. Assessee's Contention: The assessee argued that the rate of Rs.1,000 per square meter, as determined by the Government-approved valuer, was reasonable and justified, considering factors like location, amenities, proximity to Surat city, and future growth potential. The assessee contended that the rates adopted by the AO (Rs.5 per sq. meter) and the DVO (Rs.33 per sq. meter) were unreasonable and unjustifiable. Revenue's Contention: The revenue relied on the orders of the lower authorities, specifically the CIT(A)'s order, and requested that it be upheld.

Which sections of the Income-tax Act were involved?

Section 48,Section 143(3),Section 250,Section 55A,Section 55(2)(b)(i)

AI-generated summary — verify with the full judgment below

Before: SHRI DINESH MOHAN SINHA & SHRI BIAAYANANDA PRUSETH

For Appellant: Shri Rasesh Shah, CA
For Respondent: Shri Ajay Uke, Sr-DR
Hearing: 04/08/2025

PER BIUAYANANDA PRUSETH, AM:

This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, 'the Act’) dated 20.07.2024 by the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals)[in short, “the CIT(A)”] for the assessment year (AY) 2017-18, which in turn arises out of assessment order passed by the Assessing Officer (in short, ‘AO’) u/s. 143(3)of the Act on 30.11.2019. 2. Grounds of appeal raised by the assessee are as under:

“1. On the facts and circums

The order continues below.

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