Tax Tribunal Partially Upholds Appeal on Section 50C; Fair Market Value Confirmed, Directs New Cost of Acquisition Calculation.

The ITAT partially allowed the appeal concerning the addition under section 50C of the Income Tax Act. The tribunal upheld the fair market value at the time of sale as Rs. 7,50,15,600, based on another assessee's case, but directed the cost of acquisition as of 01.04.1981 to be Rs. 1,51,94,000, per the registered valuer's estimate. The AO was instructed to recompute the capital gains accordingly, resulting in a partial allowance of the appeal.

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Issues:
- Dispute over addition made under section 50C of the Income Tax Act regarding property sale consideration.

Analysis:
The appeal was filed against the order of the National Faceless Appeal Centre regarding the addition made under section 50C of the Income Tax Act. The main issue raised was the difference between the collector rate and the sale consideration mentioned in the sale deeds for a property sold by the assessee. The Assessing Officer calculated the fair market value at the time of sale as Rs. 12.25 crores, based on the purchase value estimated by the DVO at Rs. 38.22 lakhs. The CIT(A) upheld this decision.

During the proceedings, the assessee argued that the Assessing Officer should have obtained the fair market value at the time of sale along with the purchase value. The assessee also disputed the cost of acquisition as of 01.04.1981. The counsel referred to previous cases and emphasized that the principles of natural justice were violated as the report of the registered valuer was ignored. The Department, however, contended that since the assessee did not dispute the sale consideration, the additions were justified.

The tribunal noted that while the assessee disputed the cost of acquisition, they did not initially object to the fair market value at the time of sale. The tribunal accepted the fair market value of the property at the time of sale as Rs. 7,50,15,600 based on another assessee's case. However, the tribunal directed the cost of acquisition as of 01.04.1981 to be taken as per the registered valuer's estimate of Rs. 1,51,94,000. The Assessing Officer was instructed to compute the capital gains accordingly. As a result, the appeal was partly allowed.

In conclusion, the tribunal addressed the dispute regarding the addition made under section 50C of the Income Tax Act by considering both the fair market value at the time of sale and the cost of acquisition as of 01.04.1981. The tribunal upheld the fair market value at the time of sale based on another assessee's case but directed the cost of acquisition to be as per the registered valuer's estimate. The decision resulted in the partial allowance of the appeal.

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