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

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.

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.

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

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.

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