Sarada Impex Pvt. Ltd., Kolkata V. I.T.O., Ward - 13(2), Kolkata, Kolkata

ITA 611/KOL/2022

AI Insights

The case involves Sarada Impex Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, concerning the assessment year 2016-17. The primary issue was the addition of long-term capital gain amounting to Rs. 4,32,22,831, where the AO substituted the sale consideration of Rs. 2,45,99,999 with the market value as per the Stamp Valuation Authority, amounting to Rs. 6,63,20,818, without referring the valuation to the DVO, which is a mandatory requirement under Section 50C of the Income Tax Act. The Tribunal, referencing a decision by the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT, Siliguri, held that the AO was required to refer the matter to the DVO before substituting the market value for the sale consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127331 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 14-02-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 02-11-2022
• Other Referred Cases: Sunil Kumar Agarwal vs. CIT, Siliguri in 372 ITR 83 (Cal)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Valuation report; Set aside
• Section: 50C

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA ी राजेश क ु मार, लेखा सद य एवं ी संजय शमा या यक सद य के सम [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 611/Kol/2022 Assessment Year: 2016-17 Sarada Impex Pvt. Ltd. (PAN: AAKCS 1630 H) Vs. ITO, Ward-13(2), Kolkata Appellant / (अपीलाथ ) Respondent / ( !यथ ) Date of Hearing / स ु नवाई क$ त&थ 15.02.2023 Date of Pronouncement/ आदेश उ)घोषणा क$ त&थ 23.02.2023 For the Appellant/ नधा /रती क$ ओर से Shri Ashok Barnwal, CA For the Respondent/ राज व क$ ओर से Shri Vijay Kumar, Addl. CIT ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 08.09.2022 for the AY 2016-17. 2. The only issue raised by the assessee in the various grounds of appeal is against the order of Ld. CIT(A) upholding the order of AO wherein the AO has made the addition in respect of long term capital gain of Rs. 4,32,22,831/- by taking the market value as stamp valuation authority of Rs. 6,63,20,818/- as against the sale consideration of Rs. 2,45,99,999/- without referring the issue of valuation to the DVO. 2 I.T.A. No. 611/Kol/2022 Assessment Year: 2016-17 Sarada Impex Pvt. Ltd. 3. At the outset the Ld. Counsel for the assessee submitted that the AO has made the addition on account of long term capital gain by taking the market valueu/s under Section 50C of the Act as per the Stamp Valuation Authority without referring the issue of valuation to DVO which is a mandatory requirement under the Act. The Ld. A.R submitted that the Ld. CIT(A) passed the ex-parte order and thereby dismissed the appeal of the assesse thereby causing the miscarriage of justice. The Ld. A.R prayed before the bench the issue may be restored to the file of the AO with the direction to assess the income after obtaining the valuation report from the DVO. In defense of his arguments relied on the decision of Hon’ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT, Siliguri in 372 ITR 83 (Cal) wherein the Hon’ble Calcutta High Court held that before substituting the market value for the sale consideration, the AO is duty bound to refer the matter to the DVO. The Ld. A.R therefore prayed that the order of Ld. CIT(A) may be set aside and appeal may be restored back to the file of AO to assess the income of the assessee after obtaining the valuation report from the DVO qua the valuation of property and after affording the reasonable opportunity of hearing to the assessee. Tl. DR on the other hand relied on the order of authorities below. 4. After hearing the rival contentions and perusing the material on record, we find that the AO has substituted the market value u/s 50C of the Act as consideration for sale the property and thus computed long term capital gain at Rs. 4,32,22,831/- as against the actual consideration of Rs. 2,45,99,999/-. We have perused the decision of Hon’ble Calcutta High Court in the case of Sunil Kumar Agarwal (supra) and find that the assessee’s case is squarely covered by the said decision cited supra wherein the Hon’ble High Court held that before substituting the market value u/s 50C for sale consideration, the AO has to get the valuation of property done by DVO in order to ascertain the market value. In our opinion the AO has failed in his duty to refer the issue to DVO and accordingly in the interest of justice and fair play we are restoring the issue to the file of AO with the direction to assess the income of the assessee after 3 I.T.A. No. 611/Kol/2022 Assessment Year: 2016-17 Sarada Impex Pvt. Ltd. obtaining the valuation report from DVO and also giving a fair opportunity of hearing to the assessee to file its reply. Accordingly the appeal is set aside to the file of AO. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 23 rd February, 2023 Sd/- Sd/- (Sonjoy Sarma /संजय शमा ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 23 rd February, 2023 SB, Sr. PS Copy of the order forwarded to: 1. Appellant- Sarada Impex Pvt. Ltd., P-3, New C.I.T Road, 2 nd Floor, Kolkata- 700073. 2. Respondent – ITO, Ward-13(2), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata