Making Reference to DVO is mandatory for invoking Sec 50C (2): ITAT [Read Order]

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The Ahmedabad bench of ITAT recently proclaimed that making reference to DVO is mandatory for invoking Section 50C (2) of the Income Tax Act.

Section 50C(2) of the Income Tax Act 1961 defines exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.

The sole grievance of the assessee in instant case was the action of the Assessing Officer making an addition in respect of long term capital gains with by invoking Section 50C, in proceedings u/s. 143(3) of the Income Tax Act, 1961.

During the course of Appellate proceedings, it was found that the market value of the land fixed by the Stamp Duty Officer had been disputed by the purchaser and accordingly, they had approached in appeal to the Collector, Stamp Duty Valuation Division, for correct valuation as per the market price.

On appeal, the CIT (A) held that there is no requirement of remanding the matter back to the AO for referring the valuation of the land to the District Valuation Officer and also maintained the addition made by AO.

Aggrieved assessee preferred the matter before the tribunal and the bench pointed out that the decision taken by CIT (A) is of the opinion that the above reduced jantri price in Stamp Act Appellate proceedings coming to Rs.95,73,102/- is just and proper.

While relied on the decision of Calcutta high court’s judgment in (2015) 372 ITR 83 (Cal.), the tribunal bench held that impugned addition u/s.50C(2) of the Act mandates reference to the DVO in case an assessee contests the jantri price in question to be higher than fair market value of the relevant capital asset.

The bench comprising of S. S. Godara (judicial member) and Manish Borad (accountant member) allowed the appeal and referred the matter to the DVO.

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