2021 (2) TMI 345 - AT - Income Tax

ITAT rules in favor of Assessee, emphasizes fair treatment in Long Term Capital Gains assessment

Late Shri Mohanlal Ambelal Desai Versus The Income Tax Officer, Ward-3, Navsari.

Late Shri Mohanlal Ambelal Desai Versus The Income Tax Officer, Ward-3, Navsari. - TMI Issues:1. Assessment of Long Term Gain at a higher amount than claimed by the Assessee.2. Direction to refer the matter to DVO for property valuation as of 01/04/1981.3. Consideration of DVO report for property valuation instead of valuation by Govt. Approved Valuer.4. Recalculation of Long Term Capital Gain based on DVO valuation.5. Addition of a significant amount to the assessed income.6. Discrepancy in treatment of Long Term Capital Gain among co-owners.Analysis:1. The appeal was against the assessment order for A.Y. 2009-10 where the Assessee's Long Term Capital Gain was assessed significantly higher than claimed. The Assessee's share in the ancestral property was sold, and the AO used Stamp Valuation Authority's valuation to determine the Capital Gain. The Assessee contested the valuation, leading to the addition of a substantial amount to the assessed income.2. The Assessee challenged the direction to refer the property valuation to DVO for the value as of 01/04/1981. The Assessee argued against considering the DVO report over the valuation by the Govt. Approved Valuer, which had a lower value. The dispute centered on the correct valuation date and method used for determining the property value.3. The Assessee contended that similar treatment was given to co-owners in their assessment orders, where Long Term Capital Gain was accepted based on a different valuation method. The Assessee cited legal precedents and argued for equal treatment among co-owners in such cases, emphasizing the principle of equality under the law.4. The Tribunal considered the arguments presented by both parties and reviewed the orders of Lower Authorities. The Tribunal noted the acceptance of similar Long Term Capital Gain in the co-owners' cases and referenced legal decisions supporting the principle of equal treatment in such assessments.5. Citing the Madras High Court decision and the Tribunal's previous ruling, the Tribunal held that the Assessee should not be treated differently from co-owners in terms of Long Term Capital Gain assessment. Consequently, the addition made by the AO and upheld by CIT(A) was deleted, and the Assessee's appeal was allowed.6. The Tribunal's decision highlighted the importance of consistency in assessing Long Term Capital Gain among co-owners to uphold the principle of equality under the law. By aligning with legal precedents and ensuring uniform treatment, the Tribunal resolved the discrepancy in the treatment of Long Term Capital Gain, ultimately ruling in favor of the Assessee.Judgment Summary:The ITAT Surat, in a detailed analysis, allowed the Assessee's appeal against the assessment order for A.Y. 2009-10. The Tribunal emphasized the need for consistent treatment of Long Term Capital Gain among co-owners, following legal precedents and principles of equality under the law. By deleting the addition made by the AO and CIT(A), the Tribunal upheld fairness and uniformity in the assessment process.