Amit Sabharwal Vs ADIT (ITAT Delhi)
no adjustment/addition under section 50C of the Act can be made while processing the ITR under section 143(1): ITAT Delhi
ITAT Delhi order whether the addition/adjustment of Rs. 36,51,250/- made u/s 50C(1) of IT Act can fall within the ambit of adjustments provided u/s 143(1)(a) of the Act
Summary: The case of Amit Sabharwal vs. ADIT before the ITAT Delhi revolved around adjustments made by the Centralized Processing Center (CPC) during summary processing under Section 143(1) of the Income Tax Act. The assessee disclosed Long-Term Capital Gains (LTCG) from the sale of a property in Noida, where the sale consideration was lower than the stamp duty valuation. The CPC invoked Section 50C(1), making an adjustment of ₹36,51,250 based on the difference between the actual sale consideration and the stamp duty valuation. The assessee objected, arguing that adjustments under Section 50C(1) require the valuation dispute to be referred to the Department Valuation Officer (DVO) as per Section 50C(2), which was not done in this case. The tribunal observed that Section 50C provides a legal framework for determining deemed sale consideration, which includes procedural safeguards for the assessee under Sub-section (2). Summary processing under Section 143(1) is limited to objective inconsistencies like arithmetic errors or mismatches with filed documents, and does not extend to subjective issues like valuation disputes. The ITAT ruled that the adjustment made by CPC was beyond the permissible scope of Section 143(1)(a) and violated the assessee’s statutory rights under Section 50C(2). Consequently, the addition of ₹36,51,250 was deleted, emphasizing that such matters must follow proper assessment procedures under Section 143(3).
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