Case Law Details
Abdush Salam Vs ITO (ITAT Kolkata)
The appeal was filed by the assessee against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2018-19 relating to the computation of long-term capital gains on the sale of immovable property.
The assessee, an individual, filed his return declaring total income of ₹19,31,990. During the relevant year, he sold 26.562 dismil (8 katha 10 dhur) of land and disclosed long-term capital gain of ₹13,36,565 by adopting a sale consideration of ₹14,00,000 and indexed cost of acquisition of ₹63,435. During scrutiny assessment, the Assessing Officer invoked Section 50C of the Income-tax Act and substituted the actual sale consideration with the stamp duty value of ₹1,53,03,000. After allowing the indexed cost of acquisition, the Assessing Officer computed long-term capital gain at ₹1,52,39,565 and made the corresponding addition. The CIT(A) dismissed the assessee’s appeal.
Before the Tribunal, the assessee contended that the Assessing Officer had substituted the sale consideration with the stamp duty value without complying with the mandatory provisions of Section 50C(2) of the Act. It was also argued that the Assessing Officer should have referred the valuation of the property to the Departmental Valuation Officer (DVO). The Revenue submitted that the assessee had neither appeared during the assessment proceedings nor disputed the valuation adopted by the Assessing Officer, and therefore the provisions of Section 50C had been correctly applied.
The Tribunal observed that although the Assessing Officer adopted the stamp duty value as the full value of consideration, he did not refer the property valuation to the DVO as required under Section 50C(2). Taking note of the facts and circumstances, and without expressing any opinion on the merits of the valuation, the Tribunal remanded the matter to the Assessing Officer with a direction to comply with the mandatory provisions of Section 50C(2), obtain the DVO’s valuation report, and thereafter decide the matter in accordance with law after providing the assessee with a reasonable opportunity of being heard.
Accordingly, the appeal was partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal is filed by the assessee against the order of the NFAC, Delhi [“the Ld. CIT(A)”, for short], dated 31.01.2026passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the assessment year 2018-19.
2. Brief facts of the case are that, assessee is an individual and has filed his return of income on 05.10.2018 declaring total income of Rs. 19,31,990/-. The case of the assessee was selected for scrutiny on the issue of capital Gains on the sale of immovable property. During the year under consideration, the assessee had sold immovable property 26.562 dismil equal to 8 katha 10 dhur of land situated at Ward no. 35, C.S, Khata No. 37 (New no. 529), C.S Plot no. 197 (new plot no. 2834, 2838, 2839) Mouza-Mirzapur, P.S. Sasaram and shown Long Term Capital Gain as 13,36,565/- by taking sales consideration of Rs. 14,00,000/- and indexed cost of acquisition of Rs. 63,435/-. The Assessing Officer computed the revised LTCG of Rs. 1,52,39,565/- u/s 50C of the Act after taking Stamp Duty Value as Sales consideration of Rs. 1,53,03,000/- and indexed cost of acquisition of Rs. 63,435/-, accordingly, calculated and made addition of the LTCG of Rs.1,52,39,565/- vide assessment order passed u/s 143(3) r.w.s. 143(3A) r.w.s. 143(3B) of the Act dated 02.02.2021.
3. Aggrieved by the assessment order dated 02.02.2021, assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 31.01.2026, dismissed the appeal filed by the assessee. As against the order of the Ld. CIT(A), assessee preferred the captioned appeal.
4. Learned Counsel for the assessee vehemently submitted that the Ld. CIT(A) has erred in affirming the action of the Assessing Officer in substituting the actual sale consideration of Rs.14,00,000/- with the stamp duty value of Rs.1,53,03,000/- without complying with the mandatory provisions of section 50C(2) of the Act. The Learned Counsel further submitted that the Ld. CIT(A) has also erred in not directing the Assessing Officer to refer the valuation of the property to the Departmental Valuation Officer u/s 50C(2) of the Act. Thus, it was submitted that the impugned order is liable to be set aside.
5. Per contra, the Ld. DR submitted that during the assessment proceedings, the assessee neither appeared nor disputed the market value of the property, therefore, the Assessing Officer rightly invoked the provisions of section 50C of the Act and considered the stamp value of the property transferred for determination of valuation and as the full value of consideration while calculating the capital gain on transfer of the immovable property. Thus, submitted that the impugned order requires no interference at the hands of the Tribunal.
6. We have heard the parties and perused the material on record. During the year under consideration, the assessee derived income under the heads of Business and Profession, Long-Term Capital Gain, and Other Sources. In Part-B of the Schedule relating to Capital Gain in the ITR, the full value of consideration received from the sale of land and building was declared by the assessee at Rs.14,00,000/-. However, the value of the property as determined by the valuation authority on the instrument was Rs.1,53,03,000/-. The Assessing Officer, after considering the documents produced by the assessee, adopted the stamp value determined by the stamp authority and considered the same as the full value of consideration while calculating the capital gain on transfer of the immovable property. However, the Assessing Officer did not referred for valuation of the property to the DVO as required under section 50C(2) of the Act. It is specific case of the Revenue that the assessee had not disputed valuation that was adopted by the Assessing Officer during the assessment proceedings. Thus, without commenting on the merits of the case and considering the above facts and circumstances, we remand the matter to the file of the Assessing Officer with a direction to the Assessing Officer to comply with the mandatory provisions of section 50C(2) of the Act and after obtaining the DVO’s report, decide the matter in accordance with law. Needless to say, the assessee shall be provided with an opportunity of being heard.
7. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on 10.06.2026.
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