2023 (2) TMI 798 - AT - Income Tax

Assessee's Property Valuation Appeal Partially Allowed, Emphasizing Fair Treatment and Due Process

Late Smt. Vimlaben Jashbhai Patel Represented by her legal heir Bhupendrabhai Jashbhai Patel Versus The Dy. Commissioner of Income Tax, Kheda Circle, Nadiad.

The appeal by the Assessee was partly allowed for statistical purposes. The Tribunal emphasized the importance of proper verification and adjudication of ... Addition of LTCG - Determination of sale value - substitution of stamp duty valuation without referring the matter to DVO - Applicability of section 50C - AR submitted that the CIT(A) was not right in confirming the addition as the valuation of the DVO was not taken into account by the CIT(A) and in fact the Stamp Duty Valuation Authority’s valuation has been adopted without giving any proper opportunity to the assessee at the time of assessment order - Assessee submitted that the valuation of the DVO should have been verified in consonance with the sale value taken by the assessee and thus the matter needs verification - HELD THAT:- There is a difference between the sale value as determined by the assessee in the sale deed and the value adopted by the Stamp Duty Valuation Authority and the same needs verification in respect of the Jantri value as well as actual value of the property. AO as well as the CIT(A) has not taken cognisance as per the provisions of Section 50C and, therefore, this requires proper verification and adjudication. Thus, the issue is remanded back to the file of the AOfor proper adjudication and verification in respect of valuation by DVO and Jantri value as well as the sale value taken into account by the assessee and by the Department and adjudicate the matter as per law. Decided in favour of assessee for statistical propose. Issues:Validity of notice under Section 148 for assessment, Addition of Long Term Capital Gain (LTCG) under Section 50C, Proper verification of property valuation by Department.Validity of Notice under Section 148 for Assessment:The appeal was filed against the order passed by the CIT(A)-2 for the Assessment Year 2012-13. The Assessee contended that the proceedings conducted under notice u/s.148 and the subsequent assessment order passed u/s.144 r.w.s. 147 were invalid due to the lack of valid service of notice. The Assessing Officer had reopened the assessment based on discrepancies in the sale value of an immovable property sold by the Assessee. Despite multiple opportunities, the Assessee did not provide details, leading to the addition of Rs.24,32,800/- as LTCG. The Assessee argued that the notice was not received, and the matter required proper verification and remand back to the Assessing Officer for adjudication.Addition of Long Term Capital Gain (LTCG) under Section 50C:The Assessee had sold a property for Rs.4,90,000/-, but the Stamp Duty Valuation Authority considered the value to be Rs.24,32,800/-. The Assessing Officer invoked Section 50C to charge the capital gain of Rs.24,32,800/- to tax. The CIT(A) partly allowed the appeal, but the Assessee contended that the DVO's valuation was not considered, and the Stamp Duty Valuation Authority's valuation was adopted without proper opportunity for the Assessee to present their case. The matter required verification of the DVO's valuation in line with the sale value declared by the Assessee, emphasizing the need for proper adjudication and verification by the Assessing Officer.Proper Verification of Property Valuation by Department:The Assessing Officer and the CIT(A) did not consider the provisions of Section 50C adequately, necessitating verification and adjudication of the property valuation. The discrepancy between the sale value declared by the Assessee and the value adopted by the Stamp Duty Valuation Authority needed verification, including the Jantri value and the actual property value. The Tribunal remanded the issue back to the Assessing Officer for proper adjudication, verification of the DVO's valuation, Jantri value, and sale value, ensuring the Assessee's right to a fair hearing following the principles of natural justice.In conclusion, the appeal by the Assessee was partly allowed for statistical purposes, and the Tribunal emphasized the importance of proper verification and adjudication of property valuation issues, ensuring fair treatment and adherence to legal provisions.