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Facts
The assessee sold two inherited properties during the impugned assessment year. One property was sold for Rs. 24,37,500/- with a guideline value of Rs. 33 lakhs, and the second for Rs. 41 lakhs with a guideline value of Rs. 60 lakhs. The assessee argued that the guideline values were not applicable as the lands were marshy and submitted a valuation report.
Held
The Assessing Officer (AO) applied the guideline values without referring the matter to the Valuation Officer and treated the difference as unexplained income. The Tribunal noted that the claim for valuation by the Director of Valuation (DVO) was raised before the Tribunal instead of the AO, which was an error.
Key Issues
Whether the AO erred in applying guideline values without referring the properties to the DVO, and whether the issues should be restored for readjudication.
Sections Cited
50C(2)
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Income Tax Appellate Tribunal, “SMC” BENCH CUTTACK
Before: SHRI GEORGE MATHAN
(िनधा�रण वष� / Assessment Year : 2015-2016) Ananta Chandra Pati Vs ITO, Ward-3(1), Bhubaneswar Plot No-221, Sameigadia, Rasulgarh, Bhubaneswar, 751010 PAN No. : BJJPP 1666 A (अपीलाथ� /Appellant) .. (��यथ� / Respondent) िनधा�रती क� ओर से /Assessee by : Shri S.K. Agrawalla, CA राज�व क� ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई क� तारीख / Date of Hearing : 22/09/2025 घोषणा क� तारीख/Date of Pronouncement : 22/09/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 24/03/2025 passed for the assessment year 2015-2016.
It was submitted by the ld. AR that the assessee and his brother had inherited certain properties from their father on his demise. It was the submission that during the impugned assessment year, the assessee and his brother had sold two properties. It was submitted that one of the properties was sold for a consideration of Rs.24,37,500/- which had a guidelines value of Rs.33 lakhs and the second property was sold for Rs.41 lakhs which had guidelines value of Rs.60 lakhs. It was the submission that the assessee had filed the valuation report of the property before the AO. The assessee had explained that the properties were low- lying marshy lands and, therefore, alleged guidelines value should not be applied. It was the submission that the AO, without referring the matter to the Valuation Officer, applied the guidelines value and brought to tax the entire difference between the guidelines value and the sale consideration as the unexplained income in the hands of the assessee. It was the submission that the portion relating to the assessee's share was also assessed in the hands of the assessee. It was the prayer that the issues may be restored to the file of the Ld. AO for readjudication as also with a direction that the valuation of the proeprty may be referred to the DVO.
In reply, Ld.Sr. DR submitted that the Tribunal cannot restore the issue to the file of the ld.AO with a direction for having the property valued by the DVO. It was the submission that the provisions of Section 50C(2) of the Act requires the assessee to make the claim before the AO for valuation of the property. It was the submission that he had no objection if the issues are restored to the file of Ld. AO for readjudication.
I have considered the rival submissions. Admittedly, the assessee provided a valuation report. The assessee has also made claim before the Tribunal that the DVO's valuation is required to be done. This being so, the assessee has admittedly made an error of raising its claim u/s.50C(2) of the Act before the Tribunal, whereas it should be raised before the AO. This being so, in the interest of justice, the issues in this appeal are restored to the file of ld.AO for readjudication after granting the assesee adequate opportunity of being heard.
The assessee is granted liberty to make the prayer before the AO for the reference of the valuation of the property to the DVO if so desired