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2021 (5) TMI 57 - AT - Income TaxCapital gain computation - valuation of property - AO took into account the value of the property as on 01.04.1981 - reliability on Valuation report of DVO - HELD THAT:- We note that where the assessee objects before the assessing officer that value adopted by stamp valuation authority under section 50C(1) exceeds fair market value of property on date of transfer, assessing officer may either accept valuation of property on the basis of report of approved valuer filed by the assessee or he may refer question of valuation of capital asset to DVO in accordance with section 55A. We note that assessee has objected/challenged the DVO report during the assessment proceedings as well as appellate proceedings. Besides, the ld CIT(A) has also not considered the valuation report of Shri Ramesh Jain, submitted by the assessee, during the appellate proceedings. The ld CIT(A) ought to have considered the valuation report of Shri Ramesh Jain, submitted by the assessee and he must have disposed of the objections of the assessee in respect of DVO report, but he has failed to do so therefore it is against the principle of natural justice. Valuation report of DVO, after all, cannot be treated as the last word on valuation, and there has to be a grievance redressal mechanism against incorrectness of the DVO’s valuation- particularly when the DVO has not properly disposed of the objections of the assessee. It is abundantly clear from the precedents cited above, that correctness of a DVO’s report can be challenged by the assessee. We note that correctness of the DVO’s report is to be examined on merits and there is no adjudication, on that aspect, by the CIT(A). Thus, Ld CIT(A) has to examine correctness of the DVO’s report on merits after hearing both sides. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits, in accordance with the scheme of the law, after giving a due and reasonable opportunity of hearing to the assessee as well as DVO.
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