ACIT, CIRCLE-23(1), HOOGHLY, HOOGHLY vs. M/S. GRS CONSTRUCTION, HOOGHLY

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ITA 1292/KOL/2019Status: DisposedITAT Kolkata18 March 2020AY 2015-163 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) correctly directed the AO to recompute capital gains based on the DVO's valuation report. The Tribunal also found no violation of Rule 46A as the assessee had a right to produce the DVO's report before the CIT(A).

What were the facts?

The assessee sold three properties for Rs. 1,00,00,000, but the registration authority valued them at Rs. 5,43,33,013. The AO added the difference to the income. The CIT(A) accepted the DVO's report valuing the properties at Rs. 2,56,68,178 and directed the AO to recompute capital gains.

What were the issues?

Whether the CIT(A) erred in accepting the DVO's valuation report as sale consideration instead of stamp duty value and whether Rule 46A was violated by admitting additional evidence.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” KOLKATA

Before: Shri A. T. Varkey, JM & Dr. (Shri) Arjun Lal Saini, AM]

Pronounced: 18.03.2020

Shri A. T. Varkey, JM This appeal is preferred by the revenue against the order of Ld. CIT (Appeals) , 6, Kolkata dated 14-03-2019 for the assessment year 2015-16. 2. The grounds of appeal preferred by the revenue are as under:-

1.

That the Ld. CIT(A)-6, Kolkata erred on facts and in law in giving relief by accepting the cumulative value report of DVO produced by assessee as sale consideration instead of stamp duty.

2.

That the Ld. CIT(A)-6, Kolkata erred on facts and in law for accepting the additional evidence without giving opportunity to A.O., in violation of Income Tax Rule 46A of 1962. 3. That your petitioner craves leave to adduce further ground/grounds at the time of and/or before hearing of its appeal.

3.

From perusal of the above grounds of appeal, it reveals that the revenue is aggrieved with the action of the ld. CIT(A) in giving relief to the assessee by accepting the cumulative value report of DVO produced by the assessee as sale consideration instead of stamp duty value in violation of Income Tax Rule 46A of 1962 ( in short, hereinafter the ‘Rules’).

4.

Brief facts of the case as noted by the ld. CIT(A) are that during the AY under consideration the assessee had sold three properties for a total consideration of 1 M/s. GRS Construction

Rs.1,00,00,000/-, whereas, the registering authority valued the same at Rs. 5,43,33,013/-, thereby attracting the provisions of section 50C of the Income-tax Act, 1961 ( in short, herein after referred to the ‘Act ‘) to an extent of Rs. 4,43,33,013/-, which the AO has added to the income of the assessee. It was also noted by the ld. CIT(A) that the valuation of these three properties were referred to the DVO by the AO. However, the AO framed the assessment while the DVO’s valuation report was still pending. The ld. CIT(A) further noted that during the appellate proceedings before him, the assessee produced a copy of report from the DVO dt. 06-12-2018 for the three properties [a copy of which has also been endorsed to the AO]. Taking note of the DVO’s report, the ld. CIT(A) noted that the DVO has ascertained the cumulative value of these properties at Rs. 2,56,68,178/- against the value of Rs. 5,43,33,013/- ascertained by the Registration Authority. In the light of the same (DVO’s report) the ld. CIT(A) directed the AO to recompute the capital gain after taking into consideration the valuation report made by the DVO. Aggrieved, the revenue is before us.

5.

After having heard both the parties and on perusal of records, we note that the first ground of the revenue is that the ld. CIT(A) has given relief to the assessee by accepting the DVO’s report, which is incorrect since the ld. CIT(A) has only referred about the DVO’s report and directed the AO to recompute the capital gain in accordance with the law in the light of DVO report. This action of the ld. CIT(A) cannot be faulted. Therefore, we confirm the same.

6.

Coming to violation of Rule 46A of I.T Rules, 1962 is concerned, we note that the AO had referred the valuation report of the properties in question to the DVO. However, without waiting for the DVO’s report, he framed the assessment on 16-11- 2018. Therefore, the assessee preferred an appeal before the ld. CIT(A). The assessee received a copy of the DVO’s report dt. 06-12-2018 ( which was referred to the DVO by the AO). So the assessee had the right to produce the same before the ld. CIT(A). Moreover, the ld. CIT(A) has noted that a copy of the DVO’s report has been endorsed to the AO also. Taking into consideration these facts and the DVO’s report, the ld. CIT(A) has referred/decided to remand the issue back to the AO for computation of capital gain and to ascertain the cumulative value of the properties as M/s. GRS Construction

per law. Therefore, we do not find any violation of Rule 46A and therefore, there is no merit in the grounds of appeal raised by the Revenue.

7.

In the result, the appeal of revenue is dismissed.

Order Pronounced in the Open Court on 18 -03-2020 Arjun Lal Saini A.T. Varkey Accountant Member Judicial Member Dated 18 March-2020 *PP(Sr.P.S.) Copy of the order forwarded to: Appellant/Revenue: The ACIT, Circle-23(1), Hooghly, Aaykar Bhawan, 2nd Fl.,

1.

G.T Road, Khadinamore, Chinsurah, Hooghly. 2 Respondent/Assessee: M/s. GRS Construction Vill & P.O Bahirkhanda,P.S Haripal, Hooghly-712405. 3. CIT, CIT(A), Kolkata.

4.5.

DR, Kolkata Benches, Kolkata **PP/SPSBy By Order

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