CHAND BEEBI,PALAKKAD V. DCIT, CIRCLE INT.TAX, KOCHI, KOCHI

ITA 1057/COCH/2024

AI Insights

The case involves Chand Beebi, a non-resident individual, who appealed against the final assessment order for the Assessment Year 2018-19, which was passed under sections 143(3) read with section 144C(1) of the Income Tax Act, 1961. The AO had issued a notice under section 148 due to the non-filing of a regular return and subsequent information about the sale of an immovable property. The AO made an addition under the head 'capital gains' based on a different fair market value than claimed by the appellant. The DRP upheld the AO's decision, leading to the current appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315687 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJIT KUMAR DAS
• Assessee Lawyers: PATHMANATHN K.V.
• Keywords: Fair market value; Capital Gains; Valuation report
• Section: 148; 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI GEORGE GEORGE K., VP AND SHRI INTURI RAMA RAO, AM ITA No. 1057 /Coch/2024 Assessment Year: 2018-19 Chand Beebi .......... Appellant 8/266 Pazhayakotta, Parakunnam, Palakkad 678001 [PAN: BAOPA5226K] vs. DCIT, International Taxation, Kochi .......... Respondent Appellant by: Shri Pathmanathn K.V., Advocate Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 09.04.2025 Date of Pronouncement: 13.05.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the final assessment order passed u/s. 143(3) r.w.s. 144C(1) of Income Tax Act, 1961 (hereinafter \"the Act\") dated 30.01.2024 for Assessment Year (AY) 2018-19. 2. Brief facts of the case are that the appellant is a non-resident individual. No regular return of income for AY 2018-19 was filed. The DCIT (International Taxation), Kochi (hereinafter called \"the AO\"), based on the information that during the financial year 2017- 18 the appellant sold an immovable property for a consideration of 2 ITA No. 1057/Coch/2024 Chand Beebi Rs. 1,03,70,000/- formed an opinion that income escaped assessment to tax. Accordingly notice u/s. 148 of the Income Tax Act, 1961 (the Act) was issued on 07.04.2022. In response to the notice u/s. 148 the appellant filed return of income belatedly on 25.07.2022 disclosing total income of Rs. 40,03,440/-. Against the said return of income, the assessment was completed by the AO u/s. 144C of the Act on 30.01.2024 proposing addition under the head ‘capital gains’ on sale of the said immovable property of Rs. 11,84,968/-. The addition under the head ‘capital gains’ arose on account adoption of fair market value of the property as on 01.04.2001 at Rs. 1,17,000/- per cent as against Rs. 10,00,000/- adopted by the appellant. On receipt of the draft assessment order the appellant filed objections before the DRP. The DRP had rejected the above objections by holding that the valuation report filed by the assessee is not from the District Valuation Officer (DVO). The AO passed the final assessment order on 06.11.2024 by making addition of Rs. 11,84,968/- under the head ‘capital gains’. 3. Being aggrieved, the appellant is in appeal before us in the present appeal. 4. The learned counsel for the assessee contended that the DRP ought not have upheld the action of the AO in adopting Rs. 1,70,000/- as fair market value of the property as on 04.01.2021 ignoring the fact that the appellant had incurred expenditure towards cost of registration and cost of construction of compound wall with 3 ITA No. 1057/Coch/2024 Chand Beebi iron gate on front side and barbed wire fencing on the other three sides. It is further contended that the DRP ought not have rejected the valuation report of the registered valuer arbitrarily without making reference to the DVO. 5. On the other hand, the learned CIT. DR submits that no interference in the orders of the lower authorities is called for inasmuch as, the orders passed by them are reasoned orders. 6. We have heard rival contentions and perused the material available on record. The only issue that arises for our consideration is adoption of correct fair market value of the immovable property sold as on 01.04,2001. The appellant claimed the fair market value of the property as on 01.04.2001 at Rs. 10,00,000/-. Admittedly, no basis for adoption of such value was given before the AO. During the course of proceedings before the DRP, the appellant had filed valuation report given by registered valuer, the same came to be rejected by the DRP on the ground that the valuation report was not furnished by the DVO. We are of the considered opinion that the DRP ought not have rejected the valuation report given by the registered valuer without referring the same to the DVO or pointing out the defect, in the valuation report furnished by the registered valuer. Therefore, we are of the considered opinion that the interests of justice would be met, if the matter is restored to the file of the AO for de novo adjudication of the issue in accordance with law after affording reasonable opportunity of hearing to the appellant. 4 ITA No. 1057/Coch/2024 Chand Beebi 7. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced in the open court on 13th May, 2025. Sd/- Sd/- GEORGE GEORGE K. VICE PRESIDENT (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 13th May, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin "