DHARMESH KANUBHAI PATEL,SURAT vs. INCOME TAX OFFICER, WARD-2(3)(1), AAYKAR BHAVAN, MAJURA GATE, SURAT, SURAT

िनधा�रती की ओर से /Assessee by Shri P. M. Jagasheth, CA राज� की ओर से /Revenue by Shri Mukesh Jain– Sr-DR सुनवाई की तारीख/Date of hearing 01.01.2025 उद्घोषणा की तारीख/Date of 01.01.2025 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld.CIT(A)] dated 29.12.2023 for assessment year (AY) 2014-15, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 26.12.2016. The assessee has raised the following grounds of appeal:- “1.On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.87,86,742/- as long term capital gain in one agriculture land sold by the appellant at Moje Kosad, R.S.No.22/2,Block No.306, Khata No.1174 by not accepting the value as on 01.04.1981 on the basis on the government approved valuer’s valuation report by contending that the value taken as on 01.04.1981 is on higher side.

2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition without referring to the valuation to DVO, Surat and made addition at his own.

3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in taking value as on 01.04.1981 for the said land at average on the basis of sale instances available with the Ld. A.O.

4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-arte order and hence the case may please be set aside and restored back to the CIT(A) or Ld.A.O.

5. It is therefore prayed that the above addition may please be deleted as learned Members of the Tribunal may deem it proper.

6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”

2. Rival submission of both the parties heard and record perused. The Ld. Authorized Representative (Ld.AR) of the assessee submits that during relevant financial year 2013-14, the assessee has sold ancestral agricultural land at Moje Kosad, R.S. No.22/2, Block No.306, Khata No.1174 along with other co-owners for a consideration of Rs.4.39 crores. The assessee is having share of 24.58%. The assessee while filing his return of income has shown Long Term Capital Gains (in short, ‘LTCG’) of Rs.18,97,552/-. Since the asset was acquired prior to 01.04.1981, the assessee for the purpose of calculation of capital gains shown the indexation cost as on 01.04.1981 at Rs. 89,10,500/- . The Assessing Officer made a reference to Departmental Valuation Officer (in short, ‘DVO’) for estimation of fair market value of asset as on 01.04.1981. The report of DVO was not received till the passing of assessment order. The Assessing Officer on his adopted the rate of land @ 5.00/- per meter and computed capital gains at Rs.87,86,472/-. The Ld.CIT(A) confirmed the action of Assessing Officer in ex parte order dated 29.12.2013 without considering the report of DVO or by seeking any remand report from Assessing Officer. The assessee could not contest the proceedings before ld CIT(A), as previous consultant of assessee has withdrawn his authority and new consultant engaged by him has not received notice of hearing of appeal. Thus, both the lower authorities have not considered the report of DVO. The Ld. AR of assessee submits that now he has filed application in the form of affidavit for making additional claim of exemption under section 54B, which was not raised Assessing Officer or before Ld.CIT(A). The assessee has invested capital gain in purchase of new agriculture land within the time prescribed in law. The assessee is entitled to raise additional claim before First Appellate Authority in view of various decisions of Hon’ble jurisdictional High Court including in case of CIT vs. Mitesh Impex (2014) 46 taxmann.com 30 (Guj)/[2014] 225 Taxman 168 (Guj) (Mag.)[2014] 367 ITR 85 (Guj)/[2014] 270 CTR 66(Guj) [02-04- 2014]. The Ld. AR of the assessee submits that since he has raised additional claim for the first time before Tribunal. Furthermore, neither the Assessing Officer has considered the report of DVO nor the report of Government Registered Valuer. Therefore, in all fairness, matter may be restored back to the file of Assessing Officer after admitting the additional claim raised by assessee, with the direction to Assessing Officer to pass fresh assessment order in accordance with law after considering the Registered Government Valuer, report of DVO and objection raised by assessee. The Ld. AR of the assessee submits that he undertakes on behalf of assessee to be more vigilant and making timely compliance before lower authorities as and when called for.