VIJAY SHAMBHULAL JOBANPUTRA ,MUMBAI V. ACIT -17(3), MUMBAI

ITA 5792/MUM/2025

AI Insights

The case involves an appeal by Vijay Shambhulal Jobanputra against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which confirmed the valuation adopted by the Departmental Valuation Officer (DVO) without a personal hearing and contrary to the Tribunal's directions. The assessee contested the valuation as it was based on incorrect comparisons and methods, leading to a substantial disparity in the property valuation for tax purposes. The Tribunal found that the CIT(A) had not adequately addressed the assessee's objections and had not provided a fair opportunity of hearing, thus violating principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787594 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 22-09-2025
• Other Referred Cases: M/s Sahara India (Farms) Vs. CIT & Anr. 300 ITR 403 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITHA KAUSHIK
• Assessee Lawyers: K. SHIVRAM AW SHASHI BEKAL
• Keywords: Set aside; Opportunity of being heard; Fair market value; Cost of acquisition; Period of limitation; Principle of natural justice; Valuation report

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 5792/MUM/2025 Assessment Year: 2012-13 Vijay Shambhulal Jobanputra, Cama Building, 2nd floor, 24 Dalal Street, Fort, Mumbai-400001. Vs. Asst. CIT-17(3), Kautilya Bhavan, BKC Bandra East, Mumbai-400051. PAN NO. AADPJ 0975 E Appellant Respondent Assessee by : Mr. K. Shivram a/w Shashi Bekal Revenue by : Ms. Kavitha Kaushik, Sr. DR Date of Hearing : 11/11/2025 Date of pronouncement : 17/11/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 04.07.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds: 1. That on the facts and circumstances of the case and in law the Ld. National Faceless Appeal Centre (NFAC) has erred in confirming the value adopted by the Ld. Departmental Valuation Officer (DVO) without giving an opportunity of being heard by Printed from counselvise.com means of a personal hearing and without following the direction of the Tribunal. 2. That on the facts and circumstances of the cas Ld. NFAC has erred in confirming the value adopted by the Ld. DVO by stating that the value of the DVO is binding on the Ld. NFAC, which is not in accordance with the law. 3. Without prejudice to above, value adopted by the appellant as on April 01, 1981 was based on the valuation report of the approved valuer whereas the departmental valuer adopted the value as on April 01, 1981 comparing the property which are far away from the locality hence the incorrect comparison was adopted by the DV appellant as on April 01, 1981 may be directed to be adopted. 4. Without prejudice to above value adopted by the Registered Valuer as on April 01, 1981 was Rs 2,50,00,000/ Valuation Officer has valued the Rs 33,83,000/ which cannot be compared with the locality of the appellant and the Valuation was done by physical method instead of valuing the same by land and building meth adopted by the Registered valuer may be directed to be adopted as on April 01, 2. Briefly stated, the facts of the case reveal that the assessee filed its return of income for the year under consideration on 28.07.2012 declaring a total income of was selected for scrutiny and the Assessing Officer, after issuing and complying with the statutory notices under the Income 1961 (hereinafter “the Act”), noted that the assessee had sold property situated at Plot No. 36, K a long-term capital loss of cost of acquisition, the assessee furnished a valuation report of a registered valuer estimating the fair market value of the property at ₹2,50,00,000/- as on the relevant date. The Assessing Officer, Vijay Shambhulal Jobanputra means of a personal hearing and without following the direction of the Tribunal. 2. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in confirming the value adopted by the Ld. DVO by stating that the value of the DVO is binding on the Ld. NFAC, which is not in accordance with the law. 3. Without prejudice to above, value adopted by the appellant as April 01, 1981 was based on the valuation report of the approved valuer whereas the departmental valuer adopted the value as on April 01, 1981 comparing the property which are far away from the locality hence the incorrect comparison was adopted by the DVO, and hence the value adopted by the appellant as on April 01, 1981 may be directed to be adopted. 4. Without prejudice to above value adopted by the Registered Valuer as on April 01, 1981 was Rs 2,50,00,000/- where as the Valuation Officer has valued the property as on April 01, 1981 at Rs 33,83,000/- by adopting the sales instances of the locality which cannot be compared with the locality of the appellant and the Valuation was done by physical method instead of valuing the same by land and building method, hence the valuation adopted by the Registered valuer may be directed to be adopted 01, 1981. the facts of the case reveal that the assessee filed its return of income for the year under consideration on ng a total income of ₹50,38,182/ was selected for scrutiny and the Assessing Officer, after issuing and complying with the statutory notices under the Income 1961 (hereinafter “the Act”), noted that the assessee had sold property situated at Plot No. 36, Koregaon Park, Pune and claimed term capital loss of ₹5,62,50,000. In support of the claimed cost of acquisition, the assessee furnished a valuation report of a registered valuer estimating the fair market value of the property at on the relevant date. The Assessing Officer, Vijay Shambhulal Jobanputra 2 ITA No. 5792/MUM/2025 means of a personal hearing and without following the direction e and in law the Ld. NFAC has erred in confirming the value adopted by the Ld. DVO by stating that the value of the DVO is binding on the Ld. 3. Without prejudice to above, value adopted by the appellant as April 01, 1981 was based on the valuation report of the approved valuer whereas the departmental valuer adopted the value as on April 01, 1981 comparing the property which are far away from the locality hence the incorrect comparison was O, and hence the value adopted by the appellant as on April 01, 1981 may be directed to be adopted. 4. Without prejudice to above value adopted by the Registered where as the property as on April 01, 1981 at by adopting the sales instances of the locality which cannot be compared with the locality of the appellant and the Valuation was done by physical method instead of valuing od, hence the valuation adopted by the Registered valuer may be directed to be adopted the facts of the case reveal that the assessee filed its return of income for the year under consideration on 50,38,182/-. The return was selected for scrutiny and the Assessing Officer, after issuing and complying with the statutory notices under the Income-tax Act, 1961 (hereinafter “the Act”), noted that the assessee had sold oregaon Park, Pune and claimed In support of the claimed cost of acquisition, the assessee furnished a valuation report of a registered valuer estimating the fair market value of the property at on the relevant date. The Assessing Officer, Printed from counselvise.com however, rejected the said valuation report and, invoking his statutory powers, referred the matter to the District Valuation Officer (DVO) for determination of fair market value. As the period of limitation for completing the assessment was expiring and the DVO’s report had not been received, the Assessing Officer completed the assessment by the DVO. 2.1 During the appellate proceedings, the DVO’s report was received, and the learned CIT(A) directed that the valuation so determined be adopted. 2.2 Aggrieved, the assessee carried the matter before the Tribunal, contending that the DVO had failed to consider comparable sale instances in reasonable proximity to the assessee’s that there existed a substantial disparity between the sale agreement value and the prevailing ready reckoner rates. 2.3 In the first round of appellate proceedings, the Tribunal found that the learned CIT(A) had not adjudicated the assessee’ objections and restored the matter to the CIT(A) with a mandate to pass a speaking order Tribunal(supra) reads as under “13. We have heard both the counsel and perused the records on this issue. We note that assessee's c valuation was there before the Id. Commissioner of Income Tax (Appeals). This the ld. Commissioner of Income Tax (Appeals) has noted and reproduced in his order. However, we note that the Id. Vijay Shambhulal Jobanputra however, rejected the said valuation report and, invoking his statutory powers, referred the matter to the District Valuation Officer (DVO) for determination of fair market value. As the period completing the assessment was expiring and the DVO’s report had not been received, the Assessing Officer completed the assessment subject to the valuation to be furnished During the appellate proceedings, the DVO’s report was the learned CIT(A) directed that the valuation so determined be adopted. Aggrieved, the assessee carried the matter before the Tribunal, contending that the DVO had failed to consider comparable sale instances in reasonable proximity to the assessee’s that there existed a substantial disparity between the sale agreement value and the prevailing ready reckoner rates. In the first round of appellate proceedings, the Tribunal found that the learned CIT(A) had not adjudicated the assessee’ objections and restored the matter to the CIT(A) with a mandate to speaking order. The relevant observation of the Tribunal(supra) reads as under: 13. We have heard both the counsel and perused the records on this issue. We note that assessee's challenge to the merits of DVO valuation was there before the Id. Commissioner of Income Tax (Appeals). This the ld. Commissioner of Income Tax (Appeals) has noted and reproduced in his order. However, we note that the Id. Vijay Shambhulal Jobanputra 3 ITA No. 5792/MUM/2025 however, rejected the said valuation report and, invoking his statutory powers, referred the matter to the District Valuation Officer (DVO) for determination of fair market value. As the period completing the assessment was expiring and the DVO’s report had not been received, the Assessing Officer the valuation to be furnished During the appellate proceedings, the DVO’s report was the learned CIT(A) directed that the valuation so Aggrieved, the assessee carried the matter before the Tribunal, contending that the DVO had failed to consider comparable sale instances in reasonable proximity to the assessee’s property and that there existed a substantial disparity between the sale agreement value and the prevailing ready reckoner rates. In the first round of appellate proceedings, the Tribunal found that the learned CIT(A) had not adjudicated the assessee’s objections and restored the matter to the CIT(A) with a mandate to . The relevant observation of the 13. We have heard both the counsel and perused the records on hallenge to the merits of DVO valuation was there before the Id. Commissioner of Income Tax (Appeals). This the ld. Commissioner of Income Tax (Appeals) has noted and reproduced in his order. However, we note that the Id. Printed from counselvise.com Commissioner of Income Tax (Appeal and rejected the same by observing that the DVO has dealt with each of the objection in his report. The Id. Commissioner of Income Tax (Appeals) has failed to refer/reproduce the relevant portion of the DVO order leave alone his The order of the DVO has also not been placed before us. We find that honourable apex court in the case of M/s Sahara India (Farms) Vs. CIT & Anr. 300 ITR 403 (SC) has held that even administrative orders have to be consi natural justice. 14. Accordingly, in the background of aforesaid discussion and precedent we direct the Id. Commissioner of Income Tax (Appeals) to pass a speaking order on the assessee's challenge to the merits of the valuation should be granted adequate opportunity 2.4 Pursuant thereto, the learned CIT(A) issued notices and listed the matter for hearing. However, from the impugned order it is evident that no opportunity afforded to the assessee. The learned CIT(A) merely observed that the DVO had considered and disposed of the assessee’s objections and concluded that neither the Assessing Officer nor the CIT(A) had discretion to interfer findings read as under: “Thus, it can be observed from the above that the DVO has considered and disposed of all the objections raised by the Appellant in a speaking manner. There does not seem to be any contravention of principles of natural justice in this case. In this regard, it is further stated that the AO or the CIT(A) has no discretion, whatsoever, in interfering with the valuation of the property as determined 3. Aggrieved, the assessee is onc learned counsel submitted that the assessee is a senior citizen and the matter pertains to A.Y. 2012 Vijay Shambhulal Jobanputra Commissioner of Income Tax (Appeals) has summarily dismissed and rejected the same by observing that the DVO has dealt with each of the objection in his report. The Id. Commissioner of Income Tax (Appeals) has failed to refer/reproduce the relevant portion of the DVO order leave alone his comment and adjudication there on. The order of the DVO has also not been placed before us. We find that honourable apex court in the case of M/s Sahara India (Farms) Vs. CIT & Anr. 300 ITR 403 (SC) has held that even administrative orders have to be consistent with the rules of natural justice. 14. Accordingly, in the background of aforesaid discussion and precedent we direct the Id. Commissioner of Income Tax (Appeals) to pass a speaking order on the assessee's challenge to the merits of the valuation done by the DVO. Needless to add assessee should be granted adequate opportunity of being heard. Pursuant thereto, the learned CIT(A) issued notices and listed the matter for hearing. However, from the impugned order it is evident that no opportunity of personal or virtual hearing was afforded to the assessee. The learned CIT(A) merely observed that the DVO had considered and disposed of the assessee’s objections and concluded that neither the Assessing Officer nor the CIT(A) had discretion to interfere with the valuation made by the DVO. His findings read as under: Thus, it can be observed from the above that the DVO has considered and disposed of all the objections raised by the Appellant in a speaking manner. There does not seem to be any tion of principles of natural justice in this case. In this regard, it is further stated that the AO or the CIT(A) has no discretion, whatsoever, in interfering with the valuation of the property as determined by the DVO.” Aggrieved, the assessee is once again in appeal before us. The learned counsel submitted that the assessee is a senior citizen and the matter pertains to A.Y. 2012-13, involving protracted litigation. Vijay Shambhulal Jobanputra 4 ITA No. 5792/MUM/2025 s) has summarily dismissed and rejected the same by observing that the DVO has dealt with each of the objection in his report. The Id. Commissioner of Income Tax (Appeals) has failed to refer/reproduce the relevant portion of comment and adjudication there on. The order of the DVO has also not been placed before us. We find that honourable apex court in the case of M/s Sahara India (Farms) Vs. CIT & Anr. 300 ITR 403 (SC) has held that even stent with the rules of 14. Accordingly, in the background of aforesaid discussion and precedent we direct the Id. Commissioner of Income Tax (Appeals) to pass a speaking order on the assessee's challenge to the merits done by the DVO. Needless to add assessee heard.” Pursuant thereto, the learned CIT(A) issued notices and listed the matter for hearing. However, from the impugned order it is of personal or virtual hearing was afforded to the assessee. The learned CIT(A) merely observed that the DVO had considered and disposed of the assessee’s objections and concluded that neither the Assessing Officer nor the CIT(A) had e with the valuation made by the DVO. His Thus, it can be observed from the above that the DVO has considered and disposed of all the objections raised by the Appellant in a speaking manner. There does not seem to be any tion of principles of natural justice in this case. In this regard, it is further stated that the AO or the CIT(A) has no discretion, whatsoever, in interfering with the valuation of the e again in appeal before us. The learned counsel submitted that the assessee is a senior citizen and 13, involving protracted litigation. Printed from counselvise.com It was urged that the Tribunal may either direct acceptance of the approved valuer’s report or, alternatively, direct the learned CIT(A) to adjudicate the objections by a reasoned and speaking order within a stipulated time. 4. We have carefully considered the rival submissions and perused the material placed on record. It is undisputed th Assessing Officer referred the matter to the DVO for determination of fair market value as on 01.04.1981. The assessee’s principal grievance is that the DVO failed to consider comparable sales in reasonable geographical proximity, a contention consi before both the DVO and the learned CIT(A). 4.1 In our considered view, the learned CIT(A), being the first appellate authority, is under a statutory obligation to examine and adjudicate each of the assessee’s objections in a speaking order. He is fully empowered to direct the DVO to consider relevant and proximate sale instances, should the material on record so warrant. The failure to do so, coupled with the absence of any opportunity of hearing, constitutes a clear infraction principles of natural justice, particularly when the Tribunal’s earlier direction specifically mandated a speaking order. 4.2 The reasoning adopted by the learned CIT(A) discretion to examine or interfere with the DVO’s valuation legally unsustainable. The appellate authority cannot abdicate its Vijay Shambhulal Jobanputra It was urged that the Tribunal may either direct acceptance of the report or, alternatively, direct the learned CIT(A) to adjudicate the objections by a reasoned and speaking order within a stipulated time. We have carefully considered the rival submissions and perused the material placed on record. It is undisputed th Assessing Officer referred the matter to the DVO for determination of fair market value as on 01.04.1981. The assessee’s principal grievance is that the DVO failed to consider comparable sales in reasonable geographical proximity, a contention consi before both the DVO and the learned CIT(A). In our considered view, the learned CIT(A), being the first appellate authority, is under a statutory obligation to examine and adjudicate each of the assessee’s objections in a . He is fully empowered to direct the DVO to consider relevant and proximate sale instances, should the material on record so warrant. The failure to do so, coupled with the absence of any opportunity of hearing, constitutes a clear infraction principles of natural justice, particularly when the Tribunal’s earlier direction specifically mandated a speaking order. The reasoning adopted by the learned CIT(A) — discretion to examine or interfere with the DVO’s valuation legally unsustainable. The appellate authority cannot abdicate its Vijay Shambhulal Jobanputra 5 ITA No. 5792/MUM/2025 It was urged that the Tribunal may either direct acceptance of the report or, alternatively, direct the learned CIT(A) to adjudicate the objections by a reasoned and speaking order We have carefully considered the rival submissions and perused the material placed on record. It is undisputed that the Assessing Officer referred the matter to the DVO for determination of fair market value as on 01.04.1981. The assessee’s principal grievance is that the DVO failed to consider comparable sales in reasonable geographical proximity, a contention consistently raised In our considered view, the learned CIT(A), being the first appellate authority, is under a statutory obligation to examine and adjudicate each of the assessee’s objections in a reasoned and . He is fully empowered to direct the DVO to consider relevant and proximate sale instances, should the material on record so warrant. The failure to do so, coupled with the absence of any opportunity of hearing, constitutes a clear infraction of the principles of natural justice, particularly when the Tribunal’s earlier — that he has no discretion to examine or interfere with the DVO’s valuation — is legally unsustainable. The appellate authority cannot abdicate its Printed from counselvise.com jurisdiction, nor can it dispose of substantive objections by a mere endorsement of the DVO’s report without independent application of mind. 4.3 In light of the above discussion, and in compliance with the Tribunal’s earlier directions dated 17.05.2018 as well as the settled law on natural justice, we deem it appropriate to set aside the order of the learned CIT(A) on this issue and restore the matter to his file. The lea passing a detailed and speaking order on each objection raised by the assessee, after affording due opportunity of being heard. 4.4 In the interest of expeditious justice, we direct that such order be passed at the earliest, preferably within a period of from the date of receipt of this order by the learned jurisdictional Principal Commissioner of Income by the assessee are accordingly allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 17/11/2025 Rahul Sharma, Sr. P.S. Vijay Shambhulal Jobanputra jurisdiction, nor can it dispose of substantive objections by a mere endorsement of the DVO’s report without independent application In light of the above discussion, and in order to secure compliance with the Tribunal’s earlier directions dated 17.05.2018 as well as the settled law on natural justice, we deem it appropriate to set aside the order of the learned CIT(A) on this issue and restore the matter to his file. The learned CIT(A) shall adjudicate afresh, by passing a detailed and speaking order on each objection raised by the assessee, after affording due opportunity of being heard. In the interest of expeditious justice, we direct that such order arliest, preferably within a period of from the date of receipt of this order by the learned jurisdictional Principal Commissioner of Income-tax (PCIT). The grounds raised by the assessee are accordingly allowed for statistical purposes. the result, the appeal of the assessee is allowed for ounced in the open Court on 17/11/2025. - Sd/ SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Vijay Shambhulal Jobanputra 6 ITA No. 5792/MUM/2025 jurisdiction, nor can it dispose of substantive objections by a mere endorsement of the DVO’s report without independent application order to secure compliance with the Tribunal’s earlier directions dated 17.05.2018 as well as the settled law on natural justice, we deem it appropriate to set aside the order of the learned CIT(A) on this issue and restore rned CIT(A) shall adjudicate afresh, by passing a detailed and speaking order on each objection raised by the assessee, after affording due opportunity of being heard. In the interest of expeditious justice, we direct that such order arliest, preferably within a period of six months from the date of receipt of this order by the learned jurisdictional The grounds raised by the assessee are accordingly allowed for statistical purposes. the result, the appeal of the assessee is allowed for /11/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Vijay Shambhulal Jobanputra Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Vijay Shambhulal Jobanputra 7 ITA No. 5792/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "