BHIKHABHAI KALIDAS PADHIYAR,VADODARA vs. THE ITO, WARD-1(2)(1), VADODARA
Facts
The assessee appealed against the CIT(A)'s order which confirmed the AO's action of reopening assessment under Section 147 and an addition of Rs. 86,88,694/- related to Long Term Capital Gain on the sale of immovable property. The primary contention was the AO's adoption of the Fair Market Value (FMV) of the property as at 01.04.1981 at Rs. 40/- per square meter, instead of Rs. 250/- per square meter claimed by the assessee.
Held
The Tribunal ruled that the Assessing Officer's determination of FMV was invalid as it was based on a valuation report from a DVO in an unrelated case and without a specific reference to the DVO for the assessee's property. Therefore, the addition made by the AO was directed to be deleted.
Key Issues
Whether the reopening of assessment under Section 147 was valid, and whether the Fair Market Value (FMV) of immovable property for Long Term Capital Gain calculation could be determined by the AO without a specific reference to the Departmental Valuation Officer (DVO) under Section 55A for the assessee's case.
Sections Cited
Section 250, Section 147, Section 55A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI T.R. SENTHIL KUMAR
PER DR. B.R.R. KUMAR, VICE-PRESIDENT :
This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short) dated 12.11.2025, passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2016-17. 2. The assessee has raised the following grounds of appeal:- “1. The Ld. CIT(A) has erred, both in law and on facts, in confirming the action of AO in reopening the assessment u/s 147 of the Act.
The Ld. CIT(A) has erred, both in law and on facts, in confirming addition of Rs.86,88,694/-made in respect of alleged Long Term Capital Gain on sale of immovable property.
The Ld. CIT(A) has erred, both in law and on facts, in confirming the action of AO as to adopting FMV of the immovable property as at 01.04.1981 at Rs.40/- per Asst. Year : 2016-17 - 2–
square meter as against Rs.250/- per square meter adopted by assessee (based on valuation report of a registered valuer).
The Ld. CIT(A) has erred, both in law and on facts, in confirming the action of AO as to not making reference to DVO u/s 55A of the Act specifically in the case of the assessee for determination of FMV of the immovable property in question as at 01.04.1984. 5. The Ld. CIT(A) has erred, both in law and on facts, in not admitting additional evidence going to the root of the matter.
Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective.”
Straight to the issue:-
1 In pursuance to the notice issued u/s 147 of the Act, the Assessing Officer has completed the assessment determining the FMV of the land based on the valuation report of the DVO in other unrelated case. It is an undisputed fact on record that the Assessing Officer has not referred the case of the assessee to the DVO. Hence, we hold that the FMV arrived at by the Assessing Officer, in the absence of any report from the DVO specific to the assessee’s case, cannot be held to be valid. Hence, the addition made is directed to be deleted.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open Court on 11.02.2026 (T.R. SENTHIL KUMAR) VICE-PRESIDENT Ahmedabad; Dated 11/02/2026 **btk Asst. Year : 2016-17 - 3–
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent. 2. संबंिधत आयकर आयु" / Concerned CIT 3. 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.
आदेशानुसार/ BY ORDER,उप/सहायक पंजीकार (Dy./Asstt.
