2022 (4) TMI 685

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....has erred in confirming the addition made by the Assessing Officer Rs. 1,09,53,080/-. 2. The appellant is engaged in the business of real estate and retail trading of building material. The learned assessing officer accepted the nature of business carried on by the appellant. 3. The learned assessing officer erred in referring to the district valuation officer for determining the fair market value in respect of two properties which are in dispute. In respect of first property the learned assessing officer erred in adopting the difference between fair market value and cost under the head "short term capital gain". In respect of the second property here again the learned assessing officer erred in referring to the District Valuation Offic....

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....mpleted the assessment and determined total income at Rs. 1,32,53,010/- by making additions towards difference in sale consideration received as per provisions of section 50C of the Income Tax Act, 1961, without considering reference made to DVO for determining value of the property. The assessee did not challenge assessment before the first appellate authority. Subsequently, the Assessing Officer has passed rectification order u/s.154 r.w.s. 143(3) of the Income Tax Act, 1961, and determined total income at Rs. 1,09,53,080/- by adopting fair market value of the property as determined by the DVO. 4. Aggrieved by the assessment order, the assessee preferred an appeal before learned CIT(A). Before the learned CIT(A), the assessee challenged ....

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....ng Officer u/s.154 of the Act before the learned CIT(A) and questioned value adopted by the Assessing Officer. However, the learned CIT(A) rejected appeal filed by the assessee without adjudicating issue involved in the appeal on technical grounds by observing that issue challenged by the assessee is not emanating from rectification order passed by the Assessing Officer. We find that when the Assessing Officer has referred valuation of the property to the DVO, the A.O. ought to have waited for report of the DVO to determine fair market value of the property. Further, when the Assessing Officer has revised fair market value of the property, as per valuation report of the DVO, then in our considered view, the issue of fair market value of the....