Anjali Bharat Kabra v. ITO

INCOME TAX ACT, 1961

--Capital gains--Reference to DVODVO not considering various aspects having bearing on market value--Assessee not being afforded reasonable opportunity of hearing--Where DVO determined the value of a property without affording reasonable opportunity of hearing to assessee and without considering various aspects having bearing on market value of the property, case was remanded back to AO with a direction to DVO to afford reasonable opportunity of being heard to the assessee.--Assessee had sold certain piece of land and declared consideration at Rs. 111 lakhs. AO invoked section 50C and adopted stamp duty value being Rs. 199 lakhs as full value of consideration. Assessee objected this AO, therefore, referred the matter to DVO who determined the value of property at Rs. 230 lakhs. A notice was issued to the assessee to show cause as to why capital gains should not be recomputed by adopting sale consideration at Rs. 199 lakhs. Assessee submitted that DVO did not afford reasonable opportunity to file objections as to the proposed valuation. She furnished copy of MOU entered with the buyers and further submitted that impugned property was under litigation and this fact was totally ignored. Held: The duty of DVO is to provide an opportunity of hearing to the assessee before finalizing the valuation of property. The DVO is also to consider various aspects which could have bearing on market value of the property. Following the principles of natural justice, matter was remanded back to AO with a direction to DVO to afford reasonable opportunity of hearing to the assessee before finalizing the valuation.