ARUN KRISHNA DAW,KOLKATA vs. ITO, WARD-34(2), KOLKATA, KOLKATA

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ITA 2156/KOL/2016Status: DisposedITAT Kolkata24 May 2018AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee's mere acceptance of the stamp duty value as sale price does not preclude the Assessing Officer from making a reference to the DVO under Section 55A read with Section 50C of the Act. The matter was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee sold a capital asset and declared the sale consideration based on the stamp duty value. The Assessing Officer rejected the assessee's request for a reference to the DVO to determine the correct sale price and cost of acquisition, leading to an addition to the capital gains.

What were the issues?

Whether the Assessing Officer was justified in rejecting the assessee's request for a reference to the DVO to determine the correct sale price and cost of acquisition of a capital asset.

Which sections of the Income-tax Act were involved?

Section 55A,Section 50C,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA

Before: Shri P.M.Jagtap & Shri S.S.Godara

Hearing: 2405

आदेश /O R D E R PER S.S.Godara, Judicial Member:- This assessee’s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)-10, Kolkata’s order dated 17.08.2016, in case No.295/CIT(A)/10/W-34(2)/15-16/Kol, affirming Assessing Officer’s action making Long Term Capital Gains addition of ₹1,67,60,718/-, in proceedings under section 143(3) of the Income-tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused. 2. It emerges first of all that the CIT(A) has passed his lower appellate order on merits ex parte against the assessee. Mr. Shah submits during the course of hearing that the sole dispute between the parties is that of correctness of the Assessing Arun Krishna Daw Vs. ITO Wd-34(2) Page 2 Officer’s action rejecting assessee’s prayer seeking reference to the DVO u/s 55A of the Act to determine the correct sale price of the capital asset sold in the relevant previous year. Learned Departmental Representative is fair enough in not disputing this factual position. We now proceed to deal with the above sole issue in view of the relevant facts involved in the instant case.

3.

This assessee / individual admittedly jointly owned the relevant capital asset in the nature of land building in Maniktala Main Road, Kolkata. His itetk was to the half share in the said capital asset. These co-owners executed registered sale deed dated 14.10.2011 for ₹2,50,00,000/- selling the above asset. The stamp Authorities adopted the same to be at ₹13,00,73,603/- for fiscal purposes. The assessee thereafter declared consequent full value of consideration as ₹6,50,36,802/- @ 50% of stamp price. He filed a government approved valuer report as well stating fair market value of his above ancestral property as ₹1,64,65,457/- as on 01.04.1981. He also sought Sec. 54 deduction of ₹30,04,569/-. The Assessing Officer made a reference to the DVO u/s 55A of the Act for ascertaining fair market value of the capital asset as on 01.04.1981. The DVO determined FMV of assessee’s capital asset as on 01.04.1981 to be ₹1,15,34,144/-. This made the Assessing Officer to prima facie observe that the assessee’s valuer’s report (supra) declaring cost of acquisition as on 01.04.1981 as ₹1,64,65,457/- after indexation was not correct.

4.

The assessee sought a reference to the DVO to determine the correct sale price as well as on the date of sale before the Assessing Officer at this stage. The same stood rejected in the assessment order dated 31.12.2014 as a well thought tactic deployed for reducing the capital gains assessment liability in view of the fact that the above cost of acquisition as on 01.04.1981had come to be reduced as per DVO’s report. The Assessing Officer therefore went ahead to adopt the cost of acquisition of the asset as per the DVO’s report followed by its indexation coming to ₹4,52,71,715/- to compute the impugned Long Term Capital Gains as ₹1,67,60,718/- as upheld in lower appellate proceedings vide CIT(A)’s ex parte order on merits under challenge in the instant appeal.

5.

We have heard rival contentions. It is clear in view of the above narration of facts that both lower authorities have rejected assessee’s prayer seeking reference to

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