Capital gains valuation under section 50C(2): failure to seek DVO reference required fresh computation of plot transfer gains.

Where capital gains on transfer of plots were computed by adopting stamp valuation without making the statutory reference to the Departmental Valuation Officer under section 50C(2), the omission was treated as a material defect in the computation process. Because the Revenue did not dispute that no such reference had been made, the matter required fresh adjudication by the Assessing Officer in accordance with law. The remand was confined to recomputation of capital gains arising from the plots transferred in the relevant assessment year.

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Issues: Whether, in computing capital gains on transfer of plots, the absence of a reference to the Departmental Valuation Officer under section 50C(2) warranted interference and remand.

Analysis: The lower authorities adopted the stamp valuation for the property without making the statutory reference contemplated under section 50C(2). That omission was treated as a material legal defect. The Revenue did not controvert the factual assertion that no such reference had been made. The matter therefore required fresh adjudication by the Assessing Officer in accordance with law, limited to computation of capital gain in respect of the plots transferred in the relevant assessment year.

Conclusion: The issue was decided in favour of the assessee and the matter was remitted to the Assessing Officer for fresh decision.

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