2019 (11) TMI 202 - AT - Income Tax

Dispute over Land Valuation: Importance of DVO Report

The appeal involved a dispute over the valuation of land for determining capital gain, with the Assessing Officer (AO) rejecting a registered valuer's ... Capital gain computation - Non obtaining a valuation report from the DVO the capital gain of a particular property can be determined by the authorities below rejecting the valuation done by the registered valuer as relied upon by the assessee - HELD THAT:- AO rejected the valuation made by the registered valuer as relied upon by the assessee but has failed to decide the issue upon obtaining a copy from the DVO regarding the valuation of that particular property which is now a settled legal position in view of the several judicial pronouncements including the order passed by the Hon’ble Jurisdictional High Court as relied upon by the Co-ordinate Bench. AO has failed to obtain the DVO’s report which ought to have been done by the authorities below. Surprisingly, the CIT(A) is also failed to perform such statutory duties conferred upon him. Hence, we find the decision made by the AO, confirmed by the CIT(A) is not in coherence adhere to the principle laid down by the different judicial pronouncement and having no other alternative, we quash the impugned order for the reason as discussed above. We find it and proper to remit the issue to the file of the Learned AO to decide the matter afresh upon obtaining a copy from the DVO to ascertain the fair market value of the property in question as on 01.04.1981 and also upon giving a reasonable opportunity of being heard to the assessee and to take into consideration any evidence that the assessee may choose to file at the time of hearing of the matter. Hence, the assessee’s appeal is allowed for statistical purposes. Issues Involved:Determining capital gain without DVO valuation reportAnalysis:The appeal concerns the rejection of a valuation report by a registered valuer regarding the capital gain on the sale of land, leading to a dispute on the property's valuation. The Assessing Officer (AO) determined the valuation differently, resulting in a higher capital gain assessment. The appellant argued that the valuation should have been done by a technical person like the District Valuation Officer (DVO) as per legal requirements. The appellant cited a Co-ordinate Bench judgment in support of their position. The Co-ordinate Bench emphasized the importance of obtaining a DVO report before rejecting a registered valuer's valuation, as supported by various judicial pronouncements and High Court orders. The Co-ordinate Bench highlighted the need for a fair market valuation of the property based on proper assessment criteria. The AO's failure to obtain a DVO report was deemed a statutory lapse, leading to the quashing of the assessment order. The matter was remitted to the AO for a fresh determination based on the DVO's report and allowing the appellant to present additional evidence. The appeal was allowed for statistical purposes, emphasizing adherence to legal principles and fair valuation practices.