Baby Vs ITO (ITAT Bangalore)
In a notable ruling, the Bangalore ITAT granted substantial relief to a senior citizen assessee in a capital gains dispute by holding that the stamp duty value adopted u/s 50C cannot be mechanically applied when credible valuation evidence is available. The assessee had sold ancestral property along with 11 other co-owners and received a share consideration of ₹11.87 lakh.
The Assessing Officer invoked section 50C and substituted the assessee’s declared sale consideration with the stamp duty value of ₹18.90 lakh, resulting in an addition of ₹7.94 lakh to capital gains. The AO ignored the fact that the assessee had already furnished a registered valuer’s report supporting the actual sale consideration.
Before the Tribunal, the assessee pointed out that in the case of another co-seller, Mrs. Revathi, the Department itself had obtained a District Valuation Officer (DVO) report, wherein the fair market value of the same property was determined at ₹2.15 crore, which substantially supported the actual transaction value and contradicted the higher stamp duty valuation adopted by the AO.
Accepting the contention, the ITAT held that once the assessee had substantiated the sale consideration through a registered valuer’s report and the Department’s own DVO valuation in the co-owner’s case also supported the valuation, the AO was not justified in blindly adopting the stamp duty value for computing capital gains.
The Tribunal accordingly directed the AO to recompute the assessee’s capital gains by adopting proportionate value based on the DVO valuation of ₹2.15 crore instead of the stamp duty value. The ITAT also directed allowance of indexed deduction relating to compound wall construction expenses.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 868/Bang/2025 for assessment year 2018-19 is filed by Baby Mangalore against the appellate order passed by the National Faceless Appeals Centre Delhi dated 29thJanuary 2025 wherein the appeal filed by the assessee against the reassessment order passed by the National Faceless Assessment Centre Delhi under Section 147 read with Section 144B of the Income Tax Act 1961 (the Act) dated 14thFebruary 2023 was dismissed. Therefore assessee is in appeal before us. The facts clearly shows that assessee is a senior citizen who does not carry on any business transferred in ancestral property during the year and received the consideration of Rs. 11,87,500/- as his share.
