THE ACIT, CIRCLE-2(2),, BARODA vs. SHRI PRABUDDHA P. PATEL,, BARODA

Relevant facts are in a very narrow compass. There is no dispute that the assessee has sold his capital asset in question resulting in consequential long term capital gains computed of Rs.40,00,345/- at the first instance. The Assessing Officer sought to apply jantry rate thereof u/s.50C of the Act. The assessee pleaded in response that he could not fetch the above jantry price since the capital asset in question sold in the relevant previous year faced a lot of litigation upto the revenue tribunal regarding Ganotiya’s rights forming a distressing factor. He produced on record the relevant evidence as well to this effect. The Assessing Officer rejected all the said explanation to compute assessee’s long term capital gains addition of Rs.3.08crores after taking fair market value of the capital asset sold as Rs.3.29 crores u/s.50C of the Act in assessment order dated 22.12.2011.

The assessee preferred appeal. The CIT(A) appointed a DVO u/s.50C (2) of the Act. The said Valuation Officer’s report/order dated 29.01.2014 determined fair market value of assessee’s capital asset as Rs.1870/- per sq.mtr. coming to Rs.72,46,250/-. The assessee filed objection thereto. The CIT(A) rejects the same in his lower appellate order under challenge. He therefore direct the Assessing Officer to take assessee’s fair market value as per DVO’s report hereinabove. This leaves the Revenue aggrieved.

The assessee has not come present despite the fact that the registry has been sending him RPAD notices. Learned Departmental Representative strongly argues that the CIT(A) has erred in reducing fair market value of assesse’s capital asset in line with the DVO’s report hereinabove. We find no merit in Revenue’s instant argument. Hon’ble jurisdictional high court’s judgment in PCIT vs. Rajabhai L. Hadiya (2016) 237 TAXMAN 528 (Guj.) holds that the DVO’s report in such a case of Section 50C application very well binds the Revenue. We therefore see no

This Revenue’s appeal is dismissed.