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Facts
The assessee filed a return of income claiming a deduction under Section 80E. Subsequently, it was identified that a commercial property was sold, resulting in a capital loss. The Assessing Officer (AO) assessed the total income at a higher amount, rejecting the capital gains treatment. The CIT(A) partly allowed the appeal.
Held
The Tribunal held that the Ld. CIT(A) erred in rejecting the cost of acquisition based on the MVR rate obtained from the government portal. The Tribunal directed the AO to allow the cost of acquisition as per the rates specified in the document filed by the assessee, subject to verification of its veracity.
Key Issues
Whether the cost of acquisition of the property should be determined based on the MVR rate from the government portal, and whether the Ld. CIT(A) erred in estimating the indexed cost of acquisition without a proper basis.
Sections Cited
80E, 250, 55A
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Income Tax Appellate Tribunal, PATNA ‘DB’ BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: 29-January-2026 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2023-24 dated 04.06.2025.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
1. For that the Ld. CIT(A) erred in rejecting the cost of Acquisition of Property received through "Panchnama Batwara" on the basis of MVR Rate for the year as a Government portal downloaded from the "Bhoomi Jankari-Bihar" portal containing the MVR for the area in which the Property transferred was situated.
2. For that the Ld. CIT(A) has erred in estimating the Indexed Cost of acquisition at Rs.20.00 lakhs without stating the basis for the same and 5.2.1 The appellant claims that he should not be penalized for inadvertently and mistakenly choosing a wrong head of income for offering the receipts from the sale of land and the AO was not justified in taking such action which arose merely because of the ignorance of the appellant. I agree with the contention of the appellant that once the AO has accepted that the said receipts are proceeds of sale of land and not Income from other sources, the said benefit should not have been denied by the AO as stated by him in the assessment order, merely because of the fact that it was inadvertently offered under a wrong head. The appellant has submitted the working of capital loss as given below Sale consideration - Rs 48,68,000/ Less: Indexed cost of acquisition - Rs 50,85,363/ Long Term Capital Loss - Rs (-)2,17.363/ 5.2.2 However, the problem with the above claim is that appellant has not been able to show any concrete basis for claiming the cost of acquisition at Rs.2,40,000/- per decimal for the FY 2016-17. The appellant has been able to show that the land came under his ownership vide a deed of partition dated 30.11.2016 but has not been able to substantiate the basis for taking the above cost of acquisition. The appellant has apparently enclosed a paper showing some rates allegedly for Purnia Municipal Corporation for FY 2016-17. But, the source of credibility of the said document has not been established by the appellant. The appellant has not even bothered to indicate the source from where this document, which he claims to establish the cost of acquisition, has been procured from. In the absence of any basis for the claim of above cost of acquisition, I have no option but to estimate the same in the hand of the appellant. Considering the fact that it is an urban property sold in the FY 2022- 23, after a small holding period of around 6 years, the value adopted by the appellant for FY 2016-17 appears to be on very higher side. I estimate the indexed cost of acquisition Rs.20,00,000/-. The AO is directed to work out the resultant long term capital gain and calculate the capital gain accordingly.
5.3 Ground No. 3:- This ground of appeal is general in nature, therefore does not require any specific adjudication. In the result, the appeal is partly allowed.”
Rival contentions were heard and the submissions made have been examined. In the course of the appeal before the Tribunal, the assessee has filed written submissions as under:
Ground No.1 For that the Ld. CIT(A) erred in rejecting the cost of Acquisition of Property received through "Panchnama Batwara" on the basis of MVR Rate for the year as downloaded from the "Bhoomi Jankari-Bihar" portal-a Government portal containing the MVR for the area in which the Property transferred was situated. The Lr. CIT(A) vide para 5.2.2 of his Order held that reliability of the Document furnished in support of the claim of Cost of Acquisition at Rs.2,40,000 per Decimal for the F.Y.:2016-17 is not acceptable as neither the source of information has been disclosed nor credibility of the same has been established. In this connection the appellant humbly submits that the document furnished in support of cost of acquisition was a print out of MVR taken from the "Bhoomi Jankari -Bihar" Portal which is a government portal containing the MVR for the properties located in the state of Bihar. The Appellant to further dispel the doubts is now furnishing a certified copy of the MVR for the property as issued by the District Registrar, Purnea (P.B. Page No.05-06) which can dispel all doubts in the matter and provide a positive evidence to support the claim of the appellant. Ground No.-02- For that the Ld. CIT(A) has erred in estimating the Indexed Cost of acquisition at Rs.20.00 lakhs without stating the basis for the same and which is in sharp contrast to the MVR prescribed by the Government of Bihar for that area. The Lr. CIT (A) estimated the cost of acquisition on adhoc basis at Rs.20.00 lakhs vide Para 5.2.2 of his Order. The Only basis cited by Lr CIT(A) was that the property was sold after a small holding period of six years which does not itself provide any basis for determining the cost of acquisition at Rs.20.00 lakhs. Further, Sec. 55A provides for a reference to the Valuation Officer for determining the fair market value of property in case of dispute and he is the sole authority in the matter. Therefore, it is most respectfully submitted that cost of acquisition be allowed as per MVR as furnished by the appellant.
Dated: 29.01.2026 Bidhan (Sr. P.S.)