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Facts
The assessee appealed against an addition of Rs. 61 lakhs as long-term capital gain on the sale of land for AY 2009-10. The lower authorities confirmed the addition without referring the valuation to the DVO under section 50C(2) and denied indexation benefit. The proceedings were initiated under sections 147/144 and 271(1)(c) of the Income Tax Act.
Held
The Tribunal held that reference to the DVO under section 50C(2) is mandatory for capital gain valuation, citing the Sunil Kumar Agrawal case. Finding that the Assessing Officer failed to make this reference and denied indexation benefit, the Tribunal restored the matter to the AO for a fresh decision after making the requisite DVO reference.
Key Issues
Validity of long-term capital gain addition without mandatory DVO reference under section 50C(2) and denial of indexation benefit.
Sections Cited
147, 144, 271(1)(c), 50C(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
Date of hearing 25.11.2024 Date of pronouncement 02.12.2024 ORDER
PER SATBEER SINGH GODARA, JM
The assessee’s twin appeals & 58/Del/2021, for AY 2009-10 are directed against order dated 26.09.2018 passed by CIT(A)-2, Noida and 31.01.2019 passed by CIT(A), Ghaziabad in case nos. 547551020301116/CIT(A)/GZB and 818567940220617, respectively, involving proceedings under sections 147/144 and 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).
We straightway advert to the assessee’s “quantum” appeal Rs.61 lakhs after holding her to have sold/transferred the capital asset representing lands in question in the relevant previous year, for Rs.61 lakhs.
Learned senior DR vehemently submits that the impugned addition has been rightly made in assessee’s hands on account of her non-cooperation throughout.
Faced with the situation; we invited Revenue’s attention to both section 50C(2) of the Act as well as Sunil Kumar Agrawal vs. CIT (2015) 372 ITR 83 (Kolkata), wherein their lordships have held that reference to DVO is mandatory even if no such objection is raised from the taxpayer’s side. We do not see any material in the case files indicating any such reference made by the Assessing Officer in the assessment findings wherein he has assessed the assessee for her share without even granting indexation benefit. We deem it appropriate in these facts and circumstances of the case to restore the assessee’s sole substantive ground back to the Assessing Officer for his afresh appropriate decision after making section 50C reference to the DVO as per law. Ordered accordingly.