Bhupendrabhai Bhikhalal Patel Vs ITO (ITAT Ahmedabad)
Assessee sold agricultural land for ₹10,00,000. However, the Sub-Registrar adopted jantri value of ₹29,65,802 for stamp duty purposes. AO reopened the assessment & applied u/s 50C, taking stamp duty value as full consideration & computed STCG of ₹24,53,638. Further, ₹1,75,000 commission income was also added as income from other sources since Assessee did not report it in the return filed in response to notice u/s 148.
Before CIT(A), Assessee did not file any evidence or submissions. Hence, CIT(A) upheld the additions.
Before Tribunal, Assessee specifically argued that once he objects to stamp duty valuation as excessive & beyond fair market value, AO is bound to refer valuation to DVO u/s 50C(2). Tribunal accepted this contention.
Tribunal held that:
- It is settled law that when Assessee disputes stamp duty value, reference to DVO u/s 50C(2) is mandatory.
- Assessee had objected that revised jantri (effective 01.04.2011) was wrongly applied.
- AO erred in directly adopting stamp duty value without DVO reference.
- Reliance placed on multiple Tribunal rulings including Kishore Kumar (Visakhapatnam), Lalitha Karan (Hyderabad), Ridgeview Developers (Delhi), Tarun Agarwal (Agra), all holding that DVO reference is compulsory when valuation is disputed.
Accordingly, Tribunal set aside CIT(A) order & restored the matter to AO with direction to refer valuation to DVO & recompute capital gains after giving opportunity of hearing.
