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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Ms. Annapurna Gupta & Shri T.R. Senthil Kumar
Appellant by : None Respondent by : Shri B.D. Gupta, Sr.D.R. Date of hearing : 12-09-2022 Date of pronouncement : 16-09-2022 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
The present appeal has been filed by the Assessee against the order dated 27.04.2018 passed by the Commissioner of Income Tax (Appeals)-13, Ahmedabad as against the Assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2011-12.
The brief facts of the case is that the assessee in an individual and represented by his legal heir who is a Non-Resident. The Income Tax Department got information that the assessee has sold a property situated at Jamnagar on 18.11.2010 for a consideration of Rs. 75,00,000/-. However, the value of the property as per the Jantri Value u/s. 50C of the Act was of Rs. 1,39,55,490/-. As the assessee has not filed any Return of Income, therefore notice u/s. 148 was issued. In response to the said notice, the assessee filed a Return of Income on 27.11.2015 declaring Nil income. The assessee objected to the Jantry Value as per the provisions of Section 50C of the Act and ready to get the property valued by the Approved Valuer. Therefore the A.O. referred the matter u/s. 50C(2) of the Act, the Valuation Officer who determined the valued at Rs. 1,35,88,000/-. Assessee being 50% co-owner assessed Rs. 67,94,000/- as the sale consideration and determined the Long Term Capital Gain at Rs. 23,75,770/-.
Aggrieved against the same, the assessee filed an appeal before the Ld. CIT(A). Originally the DVO vide letter dated 28.03.2016 determined the value of the property at Rs. 1,35,88,000/-. During the appellate proceedings, the assessee objected to the valuation determined by the DVO on the ground that no proper opportunity of being heard and objection raised by the assessee were not dealt with the DVO. During the remand proceedings, the A.O. once again referred the matter to DVO. The DVO vide its letter dated 12.10.2017 admitted that preliminary report was to be given to the assessee for calling their objection during the inspection proceedings which were not issued in this case. Thus the DVO after hearing the assessee determined the Fair Market Value of the property vide his second report dated 28.02.2018 as Rs. 1,05,08,000/. The assessee sought to apply the second valuation of Rs. 1,05,08,000/- determined by the DVO for the purpose of computation of capital gain. Ld. CIT(A) rejected the claim on the ground that the DVO cannot revisit his order, without a fresh reference have been made to him, which is not legally tenable when assessment itself is completed. Thus the Ld. CIT(A) dismissed the appeal filed by the assessee.
Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. Ld A.O. erred in law as well as on facts in making addition u/s. 50C of the Income Tax Act, 1961 and Ld. CIT(A) erred in law as well as on facts in confirming the same.
2. Ld. CIT(A) erred in law as well as on facts in not considering Revised Valuation Report submitted by Departmental Valuation Officer which was revised at the instruction of Assessing Officer during the course of Remand Proceedings.
4.1. None appeared on behalf of the assessee. On perusal of record, it is a clear that, based on the direction of the Assessing Officer, the DVO was entrusted to consider assessee’s objection on the valuation of the property. Further the DVO vide its letter dated 12.10.2017 admitted that preliminary report was not given to the assessee calling upon its objection during the original valuation proceedings. Therefore taking into account, the assessee’s objection second valuation report dated 28.02.2018 was submitted determining the value of the property at Rs. 1,05,08,000/-. The ld. CIT(A) erred in holding that the DVO cannot revisit his order and the second report is not binding either of the Assessing Officer or the Appellate Authority, since assessment has already been done in that case. This is against the principle of Audi Alteram Partem.
4.2. It is clear find from the facts that the DVO in its first valuation report determined the value of Rs. 1,35,88,000/- without providing preliminary report to the assessee calling for his objection. When the assessee particularly raised its objection and the method of valuation, the Ld. DVO admitted the mistake and heard the objections of the assessee and then determined the value of the property vide second valuation report dated 28.02.2018. Thus the Ld. CIT(A) is legally in correct in interfering the Expert’s opinion, which cannot be determined either by the Assessing Officer or the Appellate Authority. It is a clear cut case, the DVO is himself admits preliminary report was not given to the assessee calling for its objection. When this mistake was being rectified by second valuation report determined by the DVO, the same cannot be rejected by the Ld. CIT(A) which is unjustified. Therefore the grounds raised by the assessee are hereby allowed and the appeal is allowed.
In the result, the appeal field by the assessee is allowed.