ITO, Ward-1, Baripada V. Shri Praveen Chandra Bhanjdeo, Mayurbhanj

ITA 246/CTK/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5984 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 25-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Additional evidence; Fair market value; Valuation report; Condonation of delay
• Section: 69; 143(3); 50C; 133(6); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.246/CTK/2019 Assessment Year: 2012-13 ITO, Ward-1, Baripada. Vs. Sri Praven Chandra Bhanjdeo, Belgadia Palace, Belgadia, Baripada, Mayurbhaj – 747001. PAN: AOWPS1780H (Appellants) (Respondents) Assessee by : Shri Purnendu Bhusan Mohanty, AR Revenue by : Shri M.K. Gautam, CIT, DR Date of Hearing : 25.05.2022 Date of Pronouncement : 18.08.2022 ORDER PER C.M. GARG, JM: This appeal has been filed by the Revenue against the order of the CIT(A), Cuttack, dated 24.04.2019 for AY 2012-13. 2. The grounds raised by the Revenue in this appeal read as follows:- “Wrongful and arbitrary condonation of delay in filing appeal by the assessee : Ground No. 1 : On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in condoning huge delay of 135 days or 4 1/4 months (27.04.2015 to 09.09.2015) in filing appeal by the assessee without good or sufficient reasons and also without bringing any ITA No.246/CTK/2019 2 supporting evidence on record, thereby violating the provisions of section 249(3) of the Act. Ground No. 2 : On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have kept the ratio of the decisions of Hon‟ble Supreme Court in the case of Vedabai Alias V.B.Patil Vs. SB. Patil & Others (2007) 253 ITR 798 (SC) and P.K, Ramachandran vs. State of Kerala (AIR 1998 SC 2276), wherein it has been held that delay should not be condoned unless it is of a few days and that too, for good and sufficient reasons, where each day‟s delay has been fully explained. Wrongful and illegal grant of relief on account of LTCG of Rs.2,48,63,731/- Ground No. 3 : On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in wrongfully granting relief of Rs.2,48,63,731/- on account of Long Term Capital Gain(LTCG) in violation of the statutory provisions of section 50C(3) of the I.T. Act, which provides that once the case is referred to Departmental Valuation Officer (DVO) for the purpose of determining the fair market value u/s 50C(2) of the Act, the value determined by the DVO is to be taken as the “deemed full value of consideration” for the purpose of computation of LTCG. Ground No. 4 : On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in placing reliance on the Valuation Report submitted by the assessee from his Registered Valuer, in violation of the provisions of section 50C(2) & 50C(3) of the I.T. Act, which only permits valuation to be done by the Departmental Valuation Officer (DVO). Ground No. 5 : On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the decision of Gujarat High Court in the case of Pr.CIT Vs. Ravjibhai Nagjibhai Thesia ( 2016) 388 ITR 358 (Guj.), wherein it has been held that once reference is made to the DVO, then the AO is obliged to complete the assessment in conformity with the estimation made in the report of the Valuation Officer. In the case in hand, since the CIT(A) had directed the AO to refer the matter to DVO, the CIT(A) could not have ignored such valuation report and relied upon the valuation report submitted by the Registered Valuer. ITA No.246/CTK/2019 3 Unexplained Cash Deposit u/s 69 : Ground No. 6 : On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in accepting the submission of the assessee made for the first time before him regarding the cash deposit of Rs.39,89,069/- found in his bank accounts, without giving an opportunity to the AO to examine the genuineness of such claim in complete violation of Rule 46A of I.T. Rules, 1962. General Grounds : Ground No. 7 : On the facts and in the circumstances of the case, it is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer may be restored, after giving direction to the AO to compute the LTCG as per the DVO‟s Report. Ground No. 8 : The appellant craves leave to add, alter, amend one or more grounds of appeal before the appeal is heard.” 3. The ground No.8 being general in nature is dismissed. 4. Apropos Grounds No.1 and 2, the ld. CIT-DR submitted that the ld.CIT(A) was not correct in condoning the delay of 135 days in filing the appeal before him by the assessee which was not filed within the prescribed time limit. The ld. CIT- DR submitted that the delay of each day has to be explained by the assessee as per the judgment of the Hon’ble Supreme Court in the case of Vedabai Alias V.B. Patil vs. S.B. Patil & Others (2007) 253 ITR 798 (SC). He further submitted that it was not proved that a person would travel continuously for four and a half months in absence of any sustainable evidence. The ld. CIT-DR also submitted that nothing has been placed on record to show that he was down with some medical problems due to which the appeal was filed late by 135 days. ITA No.246/CTK/2019 4 5. Replying to the above, the ld. Assessee’s representative (AR) drew our attention towards relevant para 1 of first appellate order and submitted that the appeal should have been filed on or before 26.04.2015. However, the appeal against the assessment order was filed on 08.09.2015 with the delay of 135 days. The ld. AR, supporting the condonation of delay by the ld.CIT(A) submitted that in the condonation application, the assessee explained that the assessee is a social worker and required to travel out of Orissa in pursuance of various charitable activities undertaken by him and, due to this reason alone, the appeal could not be filed within the prescribed time limit. The ld AR submitted that since the assessee is ex-Member of Legislative Assembly of Orissa and a social worker, who is required to travel widely within and outside Orissa leaving his place of residence, the ld.CIT(A) was right in condoning the delay in filing the appeal before him. Placing reliance on the judgment of the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag & Anr. vs Mst. Katiji & Ors, dated 19 February, 1987, reported in 1987 AIR 1353, the ld. AR submitted that the assessee does not get anything, except harassment, in filing the appeal late and, in the situation, when the assessee is successfully demonstrating sufficient bona fide cause for filing the delayed appeal, the delay has to be condoned raising the rider in the way of the assessee which goes to the adjudication of the grievance of the assessee by the competent court/authority. ITA No.246/CTK/2019 5 6. On careful consideration of the above submissions, we are of the considered view that undisputedly, there was a delay of 135 days in filing the appeal before the ld.CIT(A) by the assessee. The sole reason shown by the assessee for seeking condonation of delay was that the assessee is a social worker and is required to travel out of Orissa in pursuance of various charitable activities undertaken by him in the capacity of ex-Member of Legislative Assembly of Orissa and a social worker. It was the main contention of the ld.CIT-DR while challenging the condonation of delay that no evidence was furnished and nothing has been placed on record to show that the assessee was out of his residential place or home town for four and a half months, therefore, the ld.CIT(A) was not right in condoning the delay. Be that as it may, the ld.CIT(A) has not disputed that the assessee is an active politician and social worker who is required to travel widely from his home town/place of residence within and outside the State of Orissa. The Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag & Anr. vs Mst. Katiji & Ors (supra) has held thus:- "Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908. may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period." 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is con- doned the highest that ITA No.246/CTK/2019 6 can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 7. In view of the above, we are satisfied that the assessee, by way of sufficient cause has successfully demonstrated and established a bona fide and sufficient cause for the delay of 135 days in filing the appeal before the CIT(A). The judgment of the Hon’ble Supreme Court in the case of Vedabai Alias V.B. Patil vs. S.B. Patil & Others (supra) also stresses upon condonation of delay only in the event of sufficient cause explaining the delay. Therefore, in our considered opinion, the ld.CIT(A) was right in condoning the delay of 135 days in filing the appeal before him. Therefore grounds 1 and 2 of the Revenue are dismissed. ITA No.246/CTK/2019 7 8. Apropos grounds No.3, 4 and 5, the ld.CIT-DR, supporting the assessment order, submitted that during the scrutiny assessment proceedings, despite due opportunity given to the assessee, the assessee did not cooperate with the AO and submitted that the AO need not record a finding that the assessee received more consideration than what has been shown in the sale deed when the assessee did not claim before the AO that the value adopted by the stamp valuation authority was more than the fair market value of the said property, there is no need for AO to make reference to DVO. The ld.CIT-DR submitted that the ld.CIT(A) went far ahead in passing order and granting relief to the assessee in not considering the report of the DVO and in accepting the report of the registered valuer submitted by the assessee. The ld. CIT-DR submitted that the assessee sold land, but, no capital gain was shown by the assessee in the computation of income and, therefore, the case was picked up for scrutiny u/s 143(3) and the AO was right in invoking the provisions of section 50C of the Act in this case where the assessee has only shown consideration of Rs.67 lakh through cheque and Rs.40,22,870/- in cash from the purchasers. The ld. CIT-DR submitted that the AO did not make any reference to the DVO and cost of acquisition was not disputed by the assessee. Therefore, the AO was right in calculating long-term capital gain in the hands of the assessee. The ld. CIT-DR also submitted that when the report of the DVO was on record before the ld.CIT(A), then, before taking cognizance or accepting the report of the registered valuer, it was the duty of the ld. First appellate authority to refer the matter to the DVO seeking his comments on the ITA No.246/CTK/2019 8 report of the registered valuer filed by the assessee. The ld. CIT-DR submitted that the observations of the ld.CIT(A) while granting relief to the assessee are not correct, therefore, the impugned first appellate order may kindly be set aside by restoring that of the AO. 9. Replying to the above, the ld. AR of the assessee submitted that when the assessee was consistently disputing the stand of the AO and the valuation adopted by him for calculation of long-term capital gain, then, it was the duty of the AO to refer the matter to the DVO. The ld. AR further submitted that since the ld.CIT(A) also enjoyed coterminous power with the AO, then, he was right in referring the matter to the DVO and considering both the reports i.e., the one filed by the DVO and the registered valuer as relied on by the assessee. The ld. AR drew our attention to the relevant paras of first appellate order on pages 3-9 and submitted that after detailed observations and findings and considering the DVO’s as well as the registered valuer’s report the ld.CIT(A) was right in granting part relief to the assessee. The ld. AR extraneously contended that the ld.CIT(A) is not an expert for valuation of property. The ld. AR submitted that the DVO never visited the site and there was multiple deficiencies and discrepancies in the report of the DVO. The ld. AR submitted that the assessee filed reply on 07.05.2018 and the registered valuer’s report was prepared on 24.07.2018 and the DVO’s report was prepared and submitted on 26.12.2018. The ld. AR submitted that the assessee did not offer any capital gain income ITA No.246/CTK/2019 9 under the belief that no tax is leviable on sale of jungle/agricultural land under the bona fide belief. Therefore, this cannot be a basis for dismissing the findings and observations recorded by the ld.CIT(A). The ld. AR also submitted that no additional evidence was placed before the ld.CIT(A) by the assessee and it was not required for the ld.CIT(A) to call comments of the AO on the DVO’s and registered valuer’s report and, thus, there was no violation of Rule 46A of the IT Rules, 1962. 10. Placing rejoinder to the above, the ld.CIT-DR submitted that the report of the DVO was prepared and submitted on 26.12.2018 and after filing of DVO’s report the assessee filed the registered valuer’s report along with reply dated 03.01.2019, therefore, the order of the ld.CIT(A) cannot be held as sustainable being solely based on registered valuer’s report keeping aside the DVO’s report. 11. On careful consideration of the above submissions, first of all, we may point out that the ld.CIT(A) has granted relief to the assessee with the following observations and findings:- “ In the appellate proceedings, the assessee again took the plea that the computation of his tax liability was incorrect as he had not been allowed by the AO to exercise his statutory right u/s. 50C (2). This contention of the assessee is valid. The purpose of section 50C is to raise a presumption that the value adopted for stamp duty purposes could be the sale consideration. However, this presumption is rebuttable by taking recourse to the remedies provided by the provision itself. There are two remedies at the option of the assessee in that he can either file an appeal against the Stamp Value Authority or seek a reference to the Valuation Cell. Hence, during the appellate proceedings, the matter was remanded to the Income Tax Officer, ITA No.246/CTK/2019 10 Ward-1, Baripada vide office letter no. CIT(A)/ CTK/ RR/2017-18/230 dt. 08/02/2018 with directions to refer the immoveable properties of the assessee to the District Valuation Officer (DVO) for ascertaining their fair market value. The matter was then referred by the ITO, Ward-1, Baripada to the Valuation Cell vide office letters No. ITO/ W-l/BPD/ 2017-18 6428 dt. 21/02/2018 and subsequently the valuation of the said immoveable property was carried out by the Assistant Valuation Officer (AVO) and the District Valuation Officer (DVO). On 03/01/2019, the remand report u/s. 250(4) was received in the office of the CIT(A), Cuttack along with the valuation report of the AVO/DVO. As per the report submitted by the District Valuation Officer (DVO) and the Assistant Valuation Officer (AVO), the total fair market value of all the properties sold by the assessee in AY.- 2012-13 was estimated at Rs. 2,73,04,292/-. A detailed perused of this remand report shows-that the plots of land taken up for valuation are situated in Khata no.78, Mouza- Baripada Town, Unit no.7, Deulasahi in Mayurbhanj District, Odisha and carry plot no.'s 527, 538, 571, 572, 574, 575, 576, 577, 578 and 589. The 'Kissam' or types of land mentioned include Ashu, Rasta, Bagayat, Mahara and Pani Mahara which indicate the consisted in taking the bench mark value of the plot on 13-04-2011 as assessed by the nature of the land plot. The method employed in the estimation of the fair market value District Sub-Registrar, Baripada and then allowing for deductions ranging from 5% to 15% of the bench mark value depending on the location and situation of the plot, its shape and whether it is low lying land compared to the road level. The assessee also submitted a valuation report dt. 24/07/2018 prepared by an approved valuer, Er. S. Afzal Ansari (Valuer Regd.no. F-23276 of Institution of Valuers and Regd. No-110/2017-18 under Wealth Tax Act) wherein the fair market value of the plots of land covered under the 13 sale deeds of the assessee for AY.- 2012-13 was given at a figure of Rs. 1.76,94,289/-. In the appellate proceedings, the counsel for the assessee urged the acceptance of the registered valuers report over that the District Valuation Officer and advanced reasons in support of the same. Now, sub-section (2) of section 50C imports several provisions relating to the procedure for valuation for wealth tax purposes with necessary modification. Section 23A (6) and [7] of the Wealth Tax Act read as under:- ITA No.246/CTK/2019 11 (6) If the valuation of any asset is objected to in an appeal the Commissioner (Appeals) shall – (a] In a case where such valuation has been made by a Valuation officer under section 16A, give such valuation officer an opportunity of being heard. (7) The Commissioner (Appeals) may – (a) .................................. (b) before disposing of an appeal, make such further inquiry as he thinks fit or cause further inquiry to be made by the Assessing Officer or, as the case may be, by the valuation officers‟. Section 34AA refers to the right and obligation of the valuers to appear before any wealth tax authority. It reads as under-: "34AA" Appearance by registered valuers - Notwithstanding anything contained in this act, any assessee who is entitled to or required to attend before any wealth tax authority or the Appellate tribunal in connection with any matter relating to the valuation of any asset, except where he is in required under this Act to attend in person, may attend by a registered valuer. Further, it is an established practice that whatever is referred to the valuation cell can be subject to the expert opinion of a Registered Valuer, whose valuation may be relied upon by the assessee and can be used by the latter to counter the valuation report of the valuation cell in appeal proceedings. Hence, keeping the above legal provisions in view, both the Departmental Valuation Officer (DVO) and the registered valuer of the assessee were summoned before the undersigned on 20/03/2019 vide office letter no.'s CIT(A]/CTK/2018- 19/2740 dt.12/03/2019 and CIT(AJ/CTK/2018-19/273 dt.12/03/2019 respectively. On the appointed day, Er. S. Afzal Ansari, Registered valuer of the assessee and the DVO/AVO of the Income Tax Valuation Cell appeared before the undersigned and both the valuation reports were compared and discussed in detail. Now, Fair Market Value (FMV) has been defined in section 2(22B) of the IT Act, 961and reads as under-; "Fair Market Value in relation to a capital asset means-: ITA No.246/CTK/2019 12 (i) The price that the capital asset would ordinarily fetch on sale in the open market on the relevant dates and (ii) Where the price referred to in sub-clause (i) is not ascertainable, such price as may be determined in accordance with the rules made under this Act." Since the Fair market value for the purpose of computing capital gains tax in the price which the property would fetch on sale in the open market on a relevant date, the guideline value prescribed under the Indian Stamp Act or the Indian Registration Act cannot be the sole guiding factor for determining the fair market value. On perusing the, valuation report submitted by the Departmental Valuer it is observed that the bench mark adopted for initiating the valuation of each of the plots under consideration has been the value as ascertained by the District Sub-Registrar, Baripada as on 13/04/2011. Thereafter, the DVO/AVO made adjustments in this benchmark value by allowing the following deductions-: (a) A deduction of 10.15% of the bench mark value after considering the location and situation of the property. (b) A deduction of 5% for irregularity in the shape of the plot. (c) A deduction of 5-12.5% for the size of the plot (d) A deduction of 5-10% if the plot of land is low lying compared to the level , of the road. Similarly, the valuation report submitted by the Registered Valuer of the assessee was examined and the methodology adopted to estimate the fair market value was studied. To obtain the fair market value of these plots in question in the year 2011, the following two methods were used-: Method-1: In this method the present market prices of the plots were obtained after making local inquires. Based on this data, the average present market prices in 2018 were computed. Then, from IGR, Odisha the present Bench mark price of the plots were obtained and at the same time the Bench mark value of these same plots in 2011(the year of the sale of plots) was obtained from the Sub-Registrar, Baripada. The valuer then calculated the number of times the bench mark value of these plots has increased in the period 2011 to 2018. ITA No.246/CTK/2019 13 Now, to derive the fair market value of the plots in 2011, the present market price in 2018 was divided by the number of times the bench mark value of the plots in 2018 has increased via-a-vis the bench mark price in 2011. Method-2: In this method, the bench mark value of the plots in the year 2011 were obtained from the Sub-Registrar office, Baripada. To obtain the fair market value, the said bench mark value was then reduced by different percentages depending upon the location of the plot and other relevant factors. After obtained the fair market value (FMV] of these plots of land by both Method 1 and Method 2, the average of the two values has been taken as the FMV of these plots in 2011. Now, the report of the Departmental Valuation Officer (DVO) is binding upon the .Assessing Officer but not upon the Commissioner of Income Tax (Appeals) who can examine various aspects before deciding whether to accept the report. In the case instant, we have the report furnished by the DVO and also the valuation submitted by the registered value of the assessee and it is to be seen which report best approximates the Fair market value (FMV) of the plots in question. It is observed that the DVO/AVO have chosen as the base rate the prevailing rate fixed by the District Sub-Registrar, Baripada as on 13/04/2011 and then proceeded to make deduction from this base value on the basis of the location and size of the plot and other factors. However, it is often the case that these standard circle rates adopt a uniform rate of land for the entire locality and disregard the peculiar features of a particular property and even the expedient of providing standard deductions from this figure owing to considerations of location of the plot and other factors are not sufficient to capture the FMV of the plot. This inability to estimate the FMV with a reasonable degree of accuracy takes place primarily due to either, (a) the base rate is inflated and therefore exaggerates the value of the plot and (b) the standard deduction of 5% to 15% from the base rate are inadequate to fully capture the diminution the value of the property suffers on account of adverse factors. In contrast to the report of the DVO, we have the registered valuers report wherein to remove the above mentioned difficulties, two methods of valuation instead of one have been employed and the final ITA No.246/CTK/2019 14 valuation figure has been taken as the average of the values arrived at by each of these two methods. One of the methods followed is identical to that adopted by the DVO/AVO. In the second method the registered valuer has obtained the average market value of the plots in question in the year 2018 by making local inquires. Then the valuer has obtained the bench mark valuing of these plots of land from the District Sub-registrar, Baripada for the years 2011 and 2018 and has calculated the number of times the bench mark value has increased over the period 2011 to 2018. Finally, to obtain the market price of the plots in 2011, the average market price in 2018 has been divided by the number of times the bench mark value has increased over the period 2011 to 2018. After considering the reports of the DVO and that of the Registered valuer, it is felt that the latter report is better able to capture the Fair-market value of the plots in question. This method of valuation has estimated the market value to the plots in 2011 by regressing the market values of 2018 obtained by local inquiries. The movement in bench mark values over the period 2011 to 2018 has been used to regress this figure and arrive at the market values for 2011. The registered valuer, to minimise the margin for error, has taken the average of this value coupled with the figure obtained by the traditional method as followed by the DVO. In the meeting held before the undersigned on 20/03/2018 with the Departmental Valuation Officer and the registered valuer, the method followed by the latter was examined and the DVO ratified the same as an acceptable method of valuation. The DVO did not dispute the method of valuation adopted by the Registered valuer and also did not clarify if his method of valuation was superior to that of the Registered valuer. It is] also observed that even at the time of carrying out the valuation of the plots of land, the assessee had made cogent arguments in favour of a lower valuation but the same were not addressed by the DVO and nor did they find any mention in the DVO'S valuation report. Amongst others, the assessee had proffered the following reasons for a low FMV-: (i) The location of the property is at the junction of the river Surali and Budha Balanga and is prone to frequent flooding (ii) The land is covered with wild grass and surrounded by a jungle like area (iii) The property is used as a funeral ground by the local inhabitants and (iv) There is no approach road to the property and essential amenities like schools and hospitals are not available. Now, in keeping with the principles of natural justice, these objections ought to have been addressed by the DVO in order to arrive at a truer figure of the Fair market value of these plots. However, the DVO did not ITA No.246/CTK/2019 15 take cognizance of these objections but proceeded to value the property in a mechanical fashion by following the » procedure as outlined in the Guidelines for valuation of lmmovable Properties, 2009 issued by the Valuation Cell of the Income Tax Department. It should be mentioned here that these guidelines only lay down the broad contours within which a valuation must be carried out and that valuation in a particular case has to be necessarily tailored to the peculiar circumstances attending to it. Hence, keeping in view the comments in the preceding paragraphs, the FMV as given in the report of the Registered valuer of the assessee is being accepted. Consequently, a figure of Rs. 1,76,94,289/- will be the consideration received by the assessee from the sale of his properties. A relief of Rs. 2,48,63,731/- (Rs. 4,25,58,020- Rs. 1,76,94,289) is hereby granted to the assessee.” 12. In view of the above, first of all, from the assessment order, we observe that in reply to the show cause notice issued by the AO, the assessee filed reply dated 16.03.2015 and submitted as under:- “Levy the capital gain tax on the basis of actual receipts instead of resorting to „deemed valuation‟ as mentioned in section of 50C of the Act. Even if you resort to the concept of „deemed valuation‟ as envisaged in section 50C of the Act, the assessee should not be precluded from the safeguard measures as envisaged in sub-section 2 of section 50C of the Act. ” 13. On the above submissions of the assessee, the AO, after referring to the provisions of section 50C of the Act, proceeded to invoke the provisions of section 50C of the Act without referring the matter to the DVO. This was the omission on the part of the AO depriving the assessee from his legal right available to him under sub-section (2) of section 50C. Be that as it may, from the first appellate order, we observe that the ld.CIT(A) gave attention to this prayer ITA No.246/CTK/2019 16 of the assessee and referred the matter to the DVO and the AVO to ascertain the fair market value of the property sold by the assessee in AY 2012-13 which was estimated at Rs.2,73,04,292/-. The assessee also submitted a valuation report dated 24.07.2018 prepared by a registered valuer wherein the fair market value of the plots of land covered under the 13 sale deeds executed by the assessee during AY 2012-13 was estimated at Rs.1,76,94,289/-. From the observations of the CIT(A) at page 5, we also note that the ld. CIT(A) called DVO/AVO and registered valuer and they appeared collectively or at the same timebefore him and both the valuation reports were compared and discussed in detail by the ld.CIT(A). 14. First of all, we find it appropriate to consider the legal contention of the ld.CIT-DR that the ld. CIT(A) had accepted additional evidence in violation of Rule 46A of the IT Rules, 1962. In the present case, at the cost of repetition, we again took note of a very relevant fact that during assessment proceedings the assessee requested the AO to refer the issue of fair market value to the DVO by availing right available to him under sub-section (2) of section 50C of the Act. But, the AO, without referring the determination of fair market value to AVO/DVO, proceeded to make addition u/s 50C of the Act. From the relevant part of the first appellate order, we clearly note that the ld.CIT(A) under his coterminous power with the AO referred the matter to DVO/AVO and also considered the registered valuer’s report submitted by the assessee in response to ITA No.246/CTK/2019 17 AVO/DVO report. The ld. CIT(A) before considering both the reports called the AVO/DVO and Registered Valuer at the same time and confronted the report of Registered Valuer to DVO/AVO who is also a representative of Department on the determination of fair market price of property. This is a peculiar circumstances of this case in hand that the AO decided to refer the matter to DVO despite the specific request of the assessee. The ld.CIT(A), after considering the facts of the case and perhaps also considering the omission of the AO in referring the issue of Fair Market Price to DVO, referred the issue to DVO/AVO also considering the report of the Registered Valuer. In our humble view the ld.CIT(A) is empowered and entitled to direct to produce any document including reports of DVO/AVO and Registered Valuer to enable o dispose of appeal or for any substantial cause. Sub-rule (4) to Rule 46A of ITAT Rules reads as follows:- “(4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.” 15. Thus, there is no violation of Rule 46A of the Rules by the ld.CIT(A) especially when the AO is not an expert for determination of fair market value and the AO missed the opportunity when he dismissed the prayer of the assessee to refer the issue of determination of fair market value to DVO u/s 50C(2) of the ITA No.246/CTK/2019 18 Act despite written request of the assessee. Thus, we are in agreement with the contention fo the ld. AR that when the provisions of sub-section (4) of Rule 46A is invoked by the ld.CIT(A), then, it cannot be alleged that the ld. First appellate authority violated the provisions of Rule 46A of the IT Rules. 16. The ld. CIT(A), after considering the methods of valuation and reports of DVO/AVO and registered valuer, noted that during the said meeting with AVO/DVO and the registered valuer, the DVO did not dispute the method adopted by the registered valuer and did not clarify if this method of the DVO/AVO was superior to that of the registered valuer. The ld. CIT-DR did not raise any objections regarding the observations of the ld.CIT(A) that even at the time of carrying out the valuation of plots of land by the DVO, the assessee had made cogent argument in favour of the lower valuation, but the same were not addressed by the DVO nor did they find any mention in the DVO’s report. Undisputedly, the assessee had raised the following reasons for a low market value before the DVO/AVO:- “(i) The location of the property is at the junction of the river Surali and Budha Balanga and is prone to frequent flooding (ii) The land is covered with wild grass and surrounded by a jungle like area (iii) The property is used as a funeral ground by the local inhabitants and (iv) There is no approach road to the property and essential amenities like schools and hospitals are not available.” 17. But, the same were not addressed by the DVO in his report to arrive at a correct figure of fair market value of the land sold by the assessee. In our ITA No.246/CTK/2019 19 considered view, when the DVO/AVO and registered valuer had appeared before the ld.CIT(A) and were confronted with both the reports, then, the DVO did not raise any objection to the method adopted by the registered valuer for ascertaining the fair market value of the land sold by the assessee. As we have noted above that the DVO/AVO did not address the objections and reasons or arguments raised by the assessee to arrive at the truer figure of the fair market value and, therefore, the ld.CIT(A) was right in accepting the report of the registered valuer which was prepared after visiting the site/land sold by the assessee and after ascertaining the actual physical position of the land. Thus, in our humble view the ld. CIT(A) was right in holding that the DVO did not take cognizance of the objections raised by the assessee and proceeded to value the property in a mechanical manner without following the procedure as outlined in the Guidelines for Valuation of Immovable Properties, 2009 issued by the Valuation Cell of the Department which laid down the broad contours within which a valuation must be carried out and ignoring the reasons submitted by the assessee before him during preparation of valuation report. The valuation report in a particular situation has to be necessarily prepared to cover the peculiar circumstances of a particular property and also taking into consideration the guidelines issued by the Revenue Department and contentions/submissions of the assessee supporting lower value of land/property, but, the DVO/AVO did not follow this mandatory requirement. We may also point out that the AO adopted fair market value as per stamp valuation mentioned in the sale deeds as ITA No.246/CTK/2019 20 Rs.4,25,58,020/- and the DVO estimated the fair market value at Rs.2,73,04,292/- and the registered valuer estimated fair market value at Rs.1,76,94,289/-. From these facts and figures, it is clearly discernible that the stamp valuation provided by the State government was very high in comparison to fair market value applicable to land sold by the assessee. The DVO revised the same to Rs.2,73,04,292/- leaving a difference of Rs.1,52,53,728/- and the ld.CIT(A) by accepting the report of the registered valuer which estimated the fair market value at Rs.1,76,94,289/- granted relief to the assessee. We are unable to see any ambiguity, perversity or any other valid reason to interfere with the findings arrived at by the ld.CIT(A) and, therefore, we uphold the same. Accordingly, grounds No.3, 4 and 5 of the Department are dismissed. 18. Apropos ground No.6, the ld. CIT-DR submitted that the ld.CIT(A) was not correct and justified in granting relief to the assessee on the facts and circumstances of the case. The ld.CIT-DR contended that the ld. First appellate authority has grossly erred in accepting the submissions of the assessee made for the first time before him regarding the cash deposit of Rs.39,89,069/- found in his bank account without giving an opportunity to the AO to examine the genuineness of such claim in complete violation of Rule 46A of the Income-tax Rules, 1962. 19. Replying to the above, the ld. AR drew our attention towards para 3 at page 2 of assessment order and submitted that below the table the AO himself ITA No.246/CTK/2019 21 noted that on verification of sale deeds and confirmation received from purchasers as well as bank statement received u/s 133(6) of the Act, it is found that the assessee received Rs.67 lakhs through cheque and Rs/.40,22,870/- through cash which is a clear source of deposit of Rs.39,89,069/- to the bank account of the assessee. Therefore, the same cannot be treated as unexplained deposit and the ld.CIT(A) was right in granting relief to the assessee on this count. He also submitted that no additional evidence was submitted by the assessee before CIT(A), thus, issue of violation of Rule 46A of IT Rules does not arise. 20. On careful consideration of the above submissions, first of all, from relevant part of first appellate order at page 10, we observe that the ld. CIT(A) has granted relief to the assessee with the following observations and findings:- “I have examined the assessment order u/s. 143(3) for AY.-2012-13 dt. 26/03/2015 and observed that on page 2 of the said order the AO has recorded the following finding-: „On verification of sale deeds and confirmation received from the purchaser as well as bank statement u/s. 133(6) of the l.T Act, it is found that the assessee received of Rs. 67,00,000/- through cheque andRs. 40,22,870/- through cash.‟ Hence, the AO himself has certified that a cash amount of Rs. 40,22,870/- was received by the assessee through sale of land. The appellant has contended that the very same amount had been deposited in his bank accounts on various dates and therefore the AO was in error in treating the bank deposits of Rs. 39,89,069/- as an undisclosed investment. The appellant's submission has merit as the initial onus placed on him by the AO to explain the deposits has been discharged. Thereafter, the burden of proof shifted to the AO to demonstrate that the source of these deposits was other than the cash ITA No.246/CTK/2019 22 amount received by the assessee from the sale of land. However, the Assessing Officer has presented no arguments to rebut the submission of the assessee and has failed to establish that these deposits of Rs. 39,89,069/- did not have their provenance in the sale of land effected by the assessee but had a different origin. Hence, this ground of appeal of the assessee is upheld and the addition of Rs. 39,89,069/- made by the AO u/s. 69 of the l.T Act, 1961 is hereby deleted.” 21. Further, from para 3 sub-para below the table of the assessment order it clearly reveals that the AO himself noted that the assessee had received an amount of Rs.40,22,870/- from the purchasers in cash. From the relevant part of the first appellate order as reproduced above, it is clear that the ld.CIT(A) has granted relief to the assessee by observing that the AO himself has certified that a cash amount of Rs.40,22,870/- was received by the assessee through sale of land and the AO was in error in treating the bank deposit of Rs.39,89,069/- as undisclosed investment of the assessee. We decline to agree with the contentions of the ld. CIT-DR that the ld.CIT(A) had accepted claim of the assessee in violation of Rule 46A of the Rules as we are unable to see consideration of any additional evidence before the ld.CIT(A) before granting relief to the assessee on this issue. In view of the above, we have no hesitation to hold that the AO made addition in the hands of the assessee by ignoring a vital fact noted by himself in the same assessmen order that the assessee has received higher amount of Rs.40,22,870/- in cash against sale of land from purchasers which is self explaining and, in this situation, it has to be held that the burden of proof had been discharged by the assessee and the same is shifted to the shoulders of the ITA No.246/CTK/2019 23 AO. In this situation, it was required by the AO to demonstrate or substantiate that the source of impugned bank deposit was other than the cash amount received by the assessee from purchasers under the transaction of sale of land. In view of the above, we are unable to see any ambiguity, perversity or any other valid reason to interfere with the findings given by the ld.CIT(A) and, thus, we confirm the same. Accordingly, ground No.6 of the Revenue is dismissed. Ground No.7: 22. Ground No.7 is consequential to ground Nos.3, 4 and 5 of the Revenue. Since, by the earlier part of this order we have dismissed grounds No.3, 4 and 5 of the Revenue. Thus, there is no requirement of issuing any directions to the AO in this regard. Accordingly, ground No.7 is also dismissed. 23. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 18.08.2022 u/R.34(4) of ITAT Rules,1963. Sd/- Sd/- (ARUN KHODPIA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18 th Aug., 2022. dk Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, Cuttack