DCIT, NEW DELHI vs. M/S. MODERATE CREDIT CORPORATION PVT. LTD., WEST BENGAL

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ITA 6221/DEL/2015Status: DisposedITAT Delhi17 March 2025AY 2007-08Bench: SH. SATBEER SINGH GODARA, JUDICIAL MEMBER & SH. AVDHESH KUMAR MISHRA (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the learned departmental authorities ought to follow the DVO's valuation report. The Tribunal noted that the DVO's report, submitted in the case of the assessee's brother, determined the cost of acquisition of the capital asset at Rs. 1,25,70,400/- as on 01.04.1985. Citing the precedent of CIT Vs. Dr. Indra Swaroop Bhatnagar (2013) 30 taxmann.com 293 (All.), the Tribunal considered the DVO's report to be binding on the revenue authorities. Therefore, the Tribunal found it appropriate to restore the assessee's ground to the Assessing Officer for a fresh computation of the assessee's long-term capital gains in light of the DVO's report, as per law. The issue of the quantum of LTCG was not decided on merits but remanded for fresh calculation.

What were the facts?

The assessee, Sh. Atul Kumar Gupta, is appealing an order for assessment year 2012-13. The appeal challenges the addition of long-term capital gains (LTCG) of Rs. 1,19,43,998/-. This addition was made under section 143(3) read with section 147 of the Income-tax Act, 1961, and upheld by the CIT(A)/NFAC. The assessee was a co-owner (1/5th share) along with his brothers and father in the sale of a capital asset at Karol Bagh, New Delhi, for a total consideration of Rs. 16.55 crores. The procedural history involves assessment proceedings and an appeal to the CIT(A)/NFAC.

What were the issues?

1. Whether the learned lower authorities erred in adding long-term capital gains of Rs. 1,19,43,998/- in the hands of the assessee for assessment year 2012-13. Assessee's contention: The assessee argued that the cost of acquisition of the capital asset should be determined based on the report of the Departmental Valuation Officer (DVO). The assessee referred to the DVO's report submitted in his brother's case, which determined the cost of acquisition as Rs. 1,25,70,400/- as on 01.04.1985. The assessee relied on the decision in CIT Vs. Dr. Indra Swaroop Bhatnagar (2013) 30 taxmann.com 293 (All.), stating that the DVO's report is binding on the revenue authorities. Revenue's contention: The judgment does not record any specific contentions made by the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 24.11.2025Pronounced: 24.11.2025

ORDER This assessee’s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1079369562(1), dated 07.08.2025 involving proceedings under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

Coming to the assessee’s sole substantive ground raised herein challenging both the learned lower authorities’ action adding/assessing long-term capital gains of Rs.1,19,43,998/- in his hands in assessment order dated 06.12.2019 as upheld in the lower appellate discussion, it is noticed from a perusal of the case records that he happens to be the co-owner to the extent of 1/5th share; along with his brothers/father in sale/transfer of the capital asset at Karol Bagh, New Delhi for total sale consideration of Rs.16.55 crores.

3.

That being the case, the assessee invites the tribunal’s attention to pages 65 in the case records wherein the DVO had submitted his report on 21st July, 2023 regarding the very capital asset in his brother Sh. Arun Kumar Gupta’s case determining the cost of acquisition of Rs.1,25,70,400/- as on 01.04.1985. Faced with this situation, the tribunal is of the considered view that the learned departmental authorities ought to go by the foregoing valuation only as the same is very much binding on them as per (2013) 30 taxmann.com 293 (All.), CIT Vs. Dr. Indra Swaroop Bhatnagar. It is thus deemed appropriate to restore the assessee’s instant sole substantive ground back to the learned Assessing Officer for afresh computation of the assessee’s long-term capital gain in light of the said DVO’s report as per law.

4.

This assessee’s appeal is allowed in above terms.

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