Jayeshkumar Baldevbhai Patel Vs ITO (ITAT Ahmedabad)
Reopening Upheld, But DVO vs Valuer Reports Questioned – Capital Gain Addition of Rs. 2.01 Cr Remanded for Fresh Valuation
Assessee had not filed return for A.Y. 2014-15. On AIR/ITS data, AO noted sale of immovable property worth Rs.7.91 crore. Reopening u/s 147 was initiated & notice u/s 148 issued on 31.03.2019. Assessee filed return declaring long-term capital loss of Rs.12 lakh, supported by a registered valuer’s report adopting FMV at Rs.300 per sq.mtr. as on 01.04.1981. AO referred matter to DVO, who valued the land at Rs.5.17 lakh only, much lower. AO further adopted stamp duty value of Rs.9.02 crore as sale consideration, against Rs.7.91 crore actually received, & computed Assessee’s share at Rs.4.51 crore. After adjusting indexed cost, long-term capital gain was computed at Rs.2.01 crore, which was added to income. CIT(A)/NFAC upheld both reopening & addition.
Before Tribunal, Assessee contended that (i) reopening invalid since no failure to disclose material facts, (ii) land was inherited & premium for conversion from agricultural to non-agricultural use (Rs.3.61 crore) should be part of cost, (iii) valuer’s report was wrongly ignored, (iv) DVO’s reliance on Odhav area sale instances was not comparable to Vastral land, & (v) sale consideration should be taken as per agreement date (before SDV revision). Assessee also argued that CIT(A) violated natural justice by not granting VC hearing.
