DINESH RAMESH MATTA,MUMBAI V. INCOME TAX OFFICER, MUMBAI

ITA 5084/MUM/2025

AI Insights

The case involves Dinesh Ramesh Matta, who appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), which upheld the addition of Rs.86,50,390 as income under the head Capital Gain by the Assessing Officer. The dispute centered on the valuation of a tenanted property sold by the assessee, where the sale consideration reported was significantly lower than the stamp duty value used by the AO for calculating capital gains. The Tribunal acknowledged the assessee's concerns about the property's valuation and the lack of opportunity to have the property valued by the DVO, leading to the decision to remand the case for a detailed re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825165 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 11-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAN KOSURI
• Assessee Lawyers: SAMEER DALAL
• Keywords: Set aside; Opportunity of being heard; Sale consideration of property below Jantri Value; Fair market value; Cost of acquisition; Capital Gains
• Section: 147; 50C

Judgement Text

" आयकर अपीलीय अिधकरण याय पीठ मुंबई म\u0015। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No.5084/Mum/2025 (Assessment Year: 2017-18) Dinesh Ramesh Matta, 35/B Collectors Colony, Chembur, Mumbai-400071 PAN: AFFPM0720H Vs. Income Tax Officer, Kautilya Bhavan C41-43, G Block BKC, Gilban Area, Bandra Kurla Complex, Bandra East Mumbai- 400051 Revenue-अपीलाथ\u0007 / Appellant : Assessee- \b यथ\u0007 / Respondent Assessee by : Shri Sameer Dalal Revenue by : Shri Annavaran Kosuri, Sr. AR Date of Hearing : 23.12.2025 Date of Pronouncement : 29.12.2025 O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee, challenging the order of Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short “ld. CIT(A)”] dated 12.06.2025 for the AY 2017-18, which in turn arises from the assessment order dated 20.05.2023 passed by Assessment Unit Income Tax Department (for short “ld. AO”) under section 147 r.w.s. 144B of the Income Tax Act, 1961 (for short “the Act”). Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 2 2. The grounds of appeal raised by the assessee in the present appeal reads as under: “1. The Learned Commissioner of Income Tax (Appeals), NFAC has wrongly upheld the addition of Rs.86,50,390/- income under the head Capital Gain by the Assessing Officer. 2. The Learned Commissioner of Income Tax (Appeals), NFAC has wrongly upheld the market value (Stamp Duty Value) for the purpose of Calculation of Capital Gain taken by the Assessing Officer. 3. The Learned Commissioner of Income Tax (Appeals), NFAC has failed to consider that Appellant's property lacks clear marketable title in view of it was tenanted property and was sold on 'as it is where it is basis'. 4. The Learned Commissioner of Income Tax (Appeals), NFAC has failed to consider facts that purchaser is not in possession of property, legal dispute regarding possession are in various courts. 5. The Learned Commissioner of Income Tax (Appeals), NFAC has failed to give an opportunity to get valuation done by Valuation Authority” 3. Brief Facts of the case: The assessee filed his return of income on 05.08.2017 declaring total income of Rs. 6,12,700/-. The case of assessee, thereafter, was selected for scrutiny for the reason that during the year under consideration the assessee has sold an immovable property for stamp duty value of Rs. 1,08,50,875/-, whereas the stamp duty valuation of the said property was higher than the amount of consideration shown by the assessee in computation of capital gain. In the assessment proceedings the Ld.AO observed that as per the deed of Conveyance furnished by the assessee the property sold was ancestral property belonging to late. Smt. Pushpavati Lachiram Matta, Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 3 grandmother of the assessee. Father Shri Ramesh Lachiram Matta of the assessee, become legal heir having 1/3rd right in ancestral property. Further on demise of Shri Ramesh Lachiram Matta, the assessee became legal heir in the father’s share in the impugned property. The total stamp duty value of assessee’s father’s share was sold at Rs. 4,34,03,500/-, hence the assessee’s share was calculated at 1/4th of the same at Rs. 1,08,50,875/-. While calculating the long-term capital gain, the assessee adopted his actual net sale consideration at Rs. 55,00,000/-, being received as sale consideration Rs. 56,00,000/- (-) brokerage Rs. 1,00,000/-. Whereas, the Ld.AO adopted the consideration as per stamp value authority which was higher than the actual sale consideration taken by the assessee in computing the capital gain. Further, there was a dispute qua the index cost of acquisition taken by the assessee and the Ld. AO. According to AO the cost was taken for entire land value whereas the assessee is entitled for only ¼ share. Accordingly, on account of aforesaid differences an addition of Rs. 86,50,390/- was made. 4. The assessee, being aggrieved with the aforesaid order the assessee preferred appeal before the Ld. CIT(A), wherein the Ld. CIT(A) dismissed the contention of the assessee, however, had directed the Ld. AO to recomputed the capital gain on proportionate basis as per appellant share in terms of his observations which are reproduced as under : Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 4 8. Vide Ground No. 4, the appellant has further stated that the AO has wrongly calculated the share of the appellant at 1/4th of the 1/2nd of the stamp duty value. In this regard, the appellant has contended that her share in the property is just 1/4th of the 1/3rd of the total value and requested to restrict the addition on proportionate basis. The claim of the appellant is considered and it is seen that 2/3rd of the property was sold by the 7 members and the AO has calculated the consideration at 1/4th of the 1/2nd of the stamp duty value. On perusal of the conveyance deed, it was mentioned that 2/3rd of the property is sold and the municipal value of the immovable property is Rs. 8,68,07,000/-. It cannot be ascertained form the conveyance deed that whether the municipal value of Rs. 8,68,07,000/-, is of total value of the immovable property or 2/3rd of the undivided property sold. Under the circumstances, the AO is directed to verify the same. If the municipal value mentioned in conveyance deed is for 2/3rd of the property, the value adopted by the AO is correct and if the same is for total value of the property, the capital gains is to be reworked on proportionate basis as per the appellant's share. With this direction, the Ground No. 4 of the appeal is allowed subjected to verification by the AO. \" 5. Since the appeal of assessee was partly allowed by Ld. CIT(A), the assessee found it unjustified, accordingly, had filed the present appeal. 6. The Ld. Authorised Representative (in short “A.R”) of the assessee, before us, submitted that the order of Ld. CIT(A) was erroneous in partialy upholding the addition made by the Ld.AO. That the Ld. CIT(A) has upheld the view taken by the Ld.AO to adopt market value, stamp duty value for the purpose of capital gain, whereas the impugned property which was sold by the Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 5 assessee lacks clear marketable title, being in the status of a tenanted property and was sold ‘as it is where it is basis’. 7. The Ld.AR submitted that the valuation in present matter looking to the nature of property was to be referred to and done by Departmental Valuation Officer (DVO), but such opportunity was not afforded to the assessee, this was a clear violation of provisions of section 50C of the Act. It was the prayer by the Ld.AR that the matter may restore back to the file of AO for valuation of the property following the provisions of section 50C of the Act and to accordingly recompute the LTCG. 8. Per contra the Ld. Sr DR, representing the revenue vehemently supported the orders of revenue authorities, however, had not objected to the request of assessee, to restore the matter back to the file of AO, for referring the matter to DVO and to adjudicated the same afresh. 9. We have considered the rival submissions perused the material available on record and the orders of revenue authorities. Admittedly, in present matter the assessee had raised issue regarding valuation of the property by DVO before the Ld. CIT(A). However, such contentions of the assessee were treated to be void merits, thus, held that the AO was justified in adopting the fair market value/ stamp duty value. According to us, such view adopted by the Ld. CIT(A) Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 6 was unjustified and not in accordance with the mandate of sub-section (2) of section 50C of the Act, in spite the assessee is requesting for the DVO valuation. Accordingly, seeing merits in the contention of assessee, we allow the request to remand back issue to the file of AO for fresh adjudication by making reference to the DVO and to re-computed the capital gain considering such valuation provided by the DVO, also the dispute regarding proportionate share of assessee be examined afresh as observed by Ld. CIT(A). Accordingly, the matter is remanded back to the file of ld. AO for fresh adjudication. 10. Needless to say, that the assessee shall be allowed with reasonable opportunity of being heard. We direct the assessee to furnish necessary details before the Ld. AO for fair valuation of the property by the DVO and to assists the revenue in the set aside proceedings, failing which the Ld. AO would be at the liberty to pass an appropriate order in accordance with mandate of law. 11. Resultantly, the appeal of assessee is allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 29-12-2025. Sd/- Sd/- (AMIT SHUKLA) (ARUN KHODPIA) Judicial Member Accountant Member Mumbai, Dated : 29-12-2025. Poonam Mirashi Stenographer Printed from counselvise.com ITA No. 5084/Mum/2025 Dinesh Ramesh Matta 7 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "