SRI ASHISH AGARWAL,SILIGURI vs. ITO, WD-1(1), SILIGURI, SILIGURI

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ITA 1287/KOL/2015Status: DisposedITAT Kolkata24 March 2017AY 2011-20123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee's initial declaration of STCG contradicted the claim of the property being stock-in-trade. However, it agreed that the procedure under Section 50C(2) for referring the issue to the District Valuation Officer (DVO) was not followed.

What were the facts?

The assessee declared short-term capital gain (STCG) based on a property sale, but the Stamp Valuation Authority determined a higher value. The Assessing Officer (AO) and Commissioner (Appeals) confirmed the addition based on this higher value, treating it as capital gain rather than stock-in-trade.

What were the issues?

Whether the CIT-A was justified in confirming the addition on STCG by adopting the Stamp Valuation Authority's value, and whether the issue should have been referred to the DVO as per Section 50C(2).

Which sections of the Income-tax Act were involved?

Section 50C(2)

AI-generated summary — verify with the full judgment below

This appeal by the Assessee is against order dt: 23-07-2015 passed by the Commissioner of Income Tax-(Appeals), Siliguri for the assessment year 2011-12.

2.

In this appeal the assessee has raised as many as seven grounds amongst which, two effective grounds emerge for our consideration. Firstly, whether the CIT-A is justified in confirming the addition on account of determining the STCG [ Short term capital gain ] by adopting the value as indicated by Stamp Valuation Authority at Rs.46,64,616/- against the value of Rs.34,68,088/- offered by the assessee. Secondly, the CIT-A erred in not referring the issue to DVO as required U/Sec. 50C(2) of the Act.

3.

The ld. AR submits that the AO without considering the facts to the effect that the said property is part of stock-in-trade computed the capital gain at Rs.11,96,328/- in terms of section 50C of the Act. The CIT-A confirmed the same by observing that there was no stock in trade found in Balance Sheet. The ld. AR of the assessee argued that the impugned order of the CIT-A is arbitrary and illegal.

4.

On the other hand, the ld.DR relied on the orders of AO and CIT-A.

5.

Heard rival submissions and perused the material available on record. We find that as rightly pointed by the CIT-A that the assessee himself treated the income derived from capital gain as STCG and declared an income of Rs.2,81,912/- as STCG, if we take into account the same, considering the property in question as stock-in –trade does not arise at all. However, we find that the assessee raised ground no.5 as an alternative, challenging the order of CIT-A erred in not applying the procedure contemplated in section 50C(2) in referring the issue to Dist. Valuation officer. The ld.AR also argued that in case of assessee could not prove that the property in dispute is not part of stock-in- trade and the issue may be restored to the file of AO for his consideration in referring the issue to the DVO. The ld.DR also agreed to such proposition in restoring the issue to the file of AO. Accordingly, we restore the issue to the file of AO for his consideration in terms of discussion above. Thus, the effective grounds as made above are allowed for statistical purposes.

6.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

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