Sukh Pal Singh Vs ITO (ITAT Chandigarh)
Chandigarh: The Income Tax Appellate Tribunal (ITAT) Chandigarh has partially allowed an appeal by Sukh Pal Singh for Assessment Year 2014-15, primarily concerning the assessment of long-term capital gains (LTCG). The dispute arose from the sale of commercial land in Ghaziabad.
The assessee had sold land for Rs. 101.03 lakh against a stamp duty valuation of Rs. 105.60 lakh. For properties acquired before April 1, 1981, taxpayers can adopt the fair market value as of that date for calculating the cost of acquisition. Sukh Pal Singh used a registered valuer’s report, which estimated the market rate at Rs. 980 per square meter, based on a local market survey. However, the Assessing Officer (AO) rejected this valuation, opting for a notified rate of Rs. 20 per square meter, consequently increasing the computed LTCG to Rs. 104.27 lakh.
The ITAT ruled that for AY 2014-15, the fair market value as of April 1, 1981, should be adopted, not the stamp duty valuation. Crucially, the AO had not referred the valuation to a Departmental Valuation Officer (DVO) as per Section 55A of the Income Tax Act. Therefore, the ITAT directed the AO to accept the cost of acquisition as determined by the assessee’s valuation report.
