SOUMITRA KUMAR SHAW,KOLKATA V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 43 KOLKATA, KOLKATA

ITA 355/KOL/2025

AI Insights

The case involves Soumitra Kumar Shaw, who appealed against the orders of the AO and the CIT(A) regarding the assessment of long-term capital gains for the Assessment Year 2016-17. The primary contention was the incorrect calculation of the capital gains tax due to a misunderstanding of the property valuation and the portion of the property owned by the assessee. The AO had assessed a long-term capital gain and added a significant amount to the assessee's income, which was contested. The ITAT found merit in the assessee's arguments and remitted the case back to the AO for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360655 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Sale consideration of property below Jantri Value; Cost of acquisition; Principle of natural justice; Valuation report; Competent authority
• Section: 142(1); 50C

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “डी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 355/Kol/2025 Assessment Year: 2016-17 Soumitra Kumar Shaw (PAN: AJVPS 2222 G) Vs. ACIT, Circle-43, Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 07.05.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 22.05.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Sugata Shankar Roy, A.R For the revenue / राजèव कȧ ओर से Shri Ashutosh Kumar, Sr. D.R ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals)- NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 08.01.2025 for AY 2016-17. 2 I.T.A. No. 355/Kol/2025 Assessment Year: 2016-17 Soumitra Kumar Shaw 2. Brief facts of the case of the assessee is that the assessee filed return of income for AY 2016-17 declaring total income of Rs. 45,36,510/-. The case of the assessee was selected for scrutiny, notices u/s 143(2) and 142(1) were issued as during the course of scrutiny assessment it was noticed that the assessee has jointly sold the property with Shri Gita Shaw for full value consideration of Rs. 4,01,00,000/- but as per sale deed the whole property land and building has been sold to M/s Sakhi Regency Pvt. Ltd. and the certified market value of property as assessed by the competent authority is Rs. 4,07,13,538/-. The AO after going over the reply of the show cause notice and the valuation report assessed long term capital gain at Rs. 2,03,56,769/- and held that cost of acquisition with index given by the assessee in its report i.e. Rs. 1,72,19,141/- remained unexplained. The AO has made an addition of Rs. 1,72,19,141/- and total income assessed at Rs. 2,17,55,651/-. 3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the assessee preferred an appeal before us. 4. The Ld. A.R challenges the very impugned order thereby submitting that the order passed by the AO confirmed by the Ld. CIT(A) erred in law and facts as the AO failed to understand the calculation of the long term capital gain as he did not understand that the valuation made by the valuer is with respect to the entire amount in question upon which the building is situated. The AR submits that that assessee took only a portion of the value later on premises. He submits that the calculation made by the AO is wrong as the assessee is co-owner of the property wherein the mother Smt. Geeta Shaw is 50% undivided owner and she filed separate return with respect to her income. The Ld. A.R further submits that the AO failed to consider the facts contained in the written submission and valuation report of the competent authority, valuation filed by the assessee in its true perspective. He further submits that there was a gross valuation of natural justice by giving no scrip to the assessee to give reply to the clarification of the valuation made by Chartered Engineer based on which the AO has passed an order. The Ld. Counsel further submits that Section 50C of the Act comes into operation when 3 I.T.A. No. 355/Kol/2025 Assessment Year: 2016-17 Soumitra Kumar Shaw the stamp value exceeds sale consideration and in that case the consequence in the valuation adopted by the stamp duty authority shall be taken into full value consideration for the purpose of computation of capital gain. The Ld. CIT(A) further submits that the Ld. CIT(A) on the one hand has observed that the AO should have referred the property for the valuation of the valuation officer appointed by the income tax department as per Section 55A of the Act but failed to pass necessary order where the AO did not accept the value of the asset claimed by the assessee in accordance to the asset made by the registered valuer in terms of Section 55A of the Act. The submission of Ld. A.R is that the matter be remitted back to the file of AO for proper verification and after affording opportunity to the assessee to submit and place the case with documentary evidence. 5. The Ld. D.R though supports the impugned order but did not raise any objection in remitting the appeal back to the file of AO for proper verification. 6. Upon hearing the submission of the counsel of the respective parties. On perusal of the order of AO the following facts have been emerged: i) The assessee filed return of income declaring total income of Rs. 45,36,516/-. ii) Notice u/s 143(2) was issued, the assessee submitted reply along with copy of income tax return, audited balance sheet, profit and loss account, computation of income, copy of bank statement etc. 7. The submission of the AR is that he took only a portion of valuer of the mother case and AO calculated the same by taking the report of the valuer with respect to entire loan in question upon which the building is situated. The assessee has claimed deduction u/s 48 of the Act. We further find that the Ld. CIT(A) in its order has observed that the AO should have referred the property for valuation of the valuation officer appointed by the Income Tax Act as per Section 55A of the Act. It is important to mention here that as per the order of the Ld. CIT(A) the assessee could not give proper explanation before the AO made addition of Rs. 17,21,914/-. The Ld. CIT(A) has clearly observed that the AO has mentioned that the value of the land and building have not been properly taken in the valuation report submitted by the assessee. It is a fact that the AO should have 4 I.T.A. No. 355/Kol/2025 Assessment Year: 2016-17 Soumitra Kumar Shaw referred the property for the valuation by DVO of the department as per Section 55A of the Act. The Ld. A.R submitted before us the matter be remitted back to the file of AO for proper verification. Considering the order passed by the Ld. CIT(A) and documents filed by the assessee before us, we are inclined to restore the appeal of the assessee before the AO for proper verification, we find substance in the argument of the Ld. A.R, accordingly order passed by the AO confirmed by the Ld. CIT(A) is hereby set aside. The appeal is restored to the file of AO for fresh adjudication. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 22nd May, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 22nd May, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Soumitra Kumar Shaw, 66, B. K. Paul Avenue, Kolkata-700005 2. Respondent – ACIT, Circle-43, Kolkata 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "