YOGESH SEHDEV,DELHI V. INCOME TAX OFFICER WARD 30(1), DELHI

ITA 5261/DEL/2024

AI Insights

The case involves Yogesh Sehdev, the appellant, who contested the valuation of agricultural land sold during the assessment year 2020-21. The land was received through a family settlement and partially sold for Rs. 40,00,000, significantly lower than the Sub-Registrar's valuation of Rs. 72,84,000. The AO added a Long Term Capital Gain of Rs. 19,97,438, adopting the Sub-Registrar's valuation without referring to the DVO. The CIT(A) upheld this decision, rejecting the appellant's valuation report and comparable sale deeds. The Tribunal found that the proper procedure under section 50C(2) was not followed, leading to the decision to remand the case for a fresh assessment with a DVO's valuation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298865 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: N Govindaraju vs. ITO, Kiran R. Sawlani vs. ITO, Manick Chandra Paul vs. DCIT, Rajdeep Sodhani vs. ITO, Mansukhlal Ghelabhai Doshi vs. ACIT, ACIT vs. Tarun Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: NITIN GULATI
• Keywords: Capital asset; Sale consideration of property below Jantri Value; Valuation report
• Section: 143(3); 48; 50C

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.5261/िदʟी/2024 (िन.व. 2020-21) ITA No.5261/DEL/2024 (A.Y.2020-21) Yogesh Sehdev, 226, Tagore Park, Model Town, New Delhi 110009 PAN: APCPK-6430-P ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-30(1), Civic Centre, Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Nitin Gulati, Advocate ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 13.01.2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 31.01.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 15.10.2024, for assessment year 2020-21. 2. Shri Nitin Gulati, appearing on behalf of the assessee submits that during the period relevant to assessment year under appeal, the assessee had received agricultural land though a family settlement dated 14.10.2019. The assessee sold part of said land on 02.12.2019 vide registered sale deed for a consideration of Rs.40,00,000/- as against circle rate of Rs.72,84,000/- . These facts were brought to notice of Assessing Officer (AO) during assessment proceedings. The AO made addition of Long Terms Capital Gain Rs.19,97,438/-. The AO ought to have made 2 ITA No. 5261/DEL/2024 (AY 2020-21) reference to Departmental Valuation Officer u/s. 50C of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). During assessment proceedings, the assessee wanted to upload certain documents with regard to valuation of land which were necessary for proper adjudication of the issue. The assessee could not upload the documents due to technical glitch on portal. The AO completed assessment u/s. 143(3) r.w.s 144B of the Act on the basis of incomplete records. The assessee carried the issue in appeal before the CIT(A). The assessee filed an application u/s. 46A of the Act for placing on record Valuation Report from the Approved Valuer and also comparable sale deeds from the same locality. The CIT(A) rejected valuation report stating it to be not from a Valuation Officer affiliated with the Department and did not consider comparable sale deeds placed on record by the assessee from the same locality. Neither the AO nor the CIT(A) referred the matter u/s. 50C of the Act to the Valuation Officer and instead adopted Sub- Registrar valuation. The ld. Counsel submits that where there is dispute with regard to valuation of property, the AO ought to have referred the valuation to Departmental Valuation Officer (in short ‘DVO). In support of his submissions, he placed reliance on the following decisions:- (i) N Govindaraju vs. ITO, 60 taxmann.com 333 (Karnataka); (ii) Kiran R. Sawlani vs. ITO, 136 taxmann.com 14 (Mumbai –Trib.); (iii) Manick Chandra Paul vs. DCIT, 164 taxmannc.om 572 (Kolkata-Trib.); (iv) Rajdeep Sodhani vs. ITO, 159 taxmann.com 1584 (Kolkata-Trib.); (v) Mansukhlal Ghelabhai Doshi vs. ACIT, 48 taxmann.com 181 (Rajkot-Trib.); & (vi) ACIT vs. Tarun Agarwal, 97 taxmann.com 346 (Agra-Trib.). 3. Per contra, Shri Sanjay Kumar representing the department vehemently supporting impugned order submits that the valuation report furnished by the 3 ITA No. 5261/DEL/2024 (AY 2020-21) assessee was not from the approved valuer, hence, same was rejected by the CIT(A). The Assessing Officer has adopted value of property as per collector rate. 4. Both sides heard, orders of the authorities below examined. The short issue in appeal is with regard to valuation of property sold by the assessee during the period relevant to assessment year under appeal. The assessee has sold property at a rate less than the value determined by the Sub-Registrar. The AO adopted value determined by Sub-Registrar and determined Long Term Capital Gain as under:- Sale considered as per Sub-Registrar Rs.72,84,000/- Less sale consideration shown by the assessee Rs.40,00,000/- Concealment of transaction Rs.32,84,000/- Less capital gain accepted Rs.12,85,562/- Long Term Capital Gain concealed Rs.19,97,438/- 5. The assessee had furnished valuation report from alleged approved valuer before the CIT(A) and also provided sale instances of properties from the same vicinity. The CIT(A) rejected Valuation report furnished by the assessee stating it to be not from approved valuer and did not take cognizance of comparable sale instances provided by the assessee. Nor any valuation report was sought by the CIT(A) from Departmental Valuation Officer. 6. Whenever, there is dispute with regard to valuation of property, the Assessing Officer has to refer capital asset to Valuation Officer u/s. 50C(2) of the Act. In the instant case, neither the AO nor the CIT(A) had sought report from the Departmental Valuation Officer. Considering entire facts of the case, I deem it appropriate to restore this matter to the AO for denovo assessment after seeking valuation report from the DVO as on the date of sale of property. The AO shall, 4 ITA No. 5261/DEL/2024 (AY 2020-21) thereafter, make fresh assessment after affording reasonable opportunity of making submissions to the assessee, in accordance with law. 7. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on Friday the 31st day of January, 2025. Sd/- Sd/-/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 31.01.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "