Vishal Navinchandra Shah Vs CIT (ITAT Rajkot)
ITAT Rajkot Remands Sec 50C Addition – Mandatory DVO Reference Required When Assessee Disputes Stamp Value
In Vishal Navinchandra Shah vs CIT(A) (AY 2013-14), the ITAT Rajkot allowed the assessee’s appeal for statistical purposes and restored the matter to the AO after holding that section 50C was not applied in its correct legal spirit. The assessee had sold two properties for ₹31.89 lakh, whereas the stamp valuation authority adopted value of ₹55.15 lakh, leading to addition of ₹23.26 lakh to LTCG u/s 50C.
The Tribunal noted that the assessee had specifically disputed the stamp duty valuation and requested reference to the Departmental Valuation Officer (DVO) under sec 50C(2). However, the AO proceeded without obtaining a DVO report and CIT(A) confirmed the addition ex-parte after issuing only a single notice. ITAT held that when fair market value is challenged, reference to DVO becomes mandatory, and valuation based solely on stamp duty cannot be sustained without such examination.
Accordingly, the Tribunal set aside the impugned orders and remanded the issue to the AO with directions to obtain DVO valuation and decide the capital gains afresh after granting adequate opportunity to the assessee. The appeal was thus allowed for statistical purposes.
