Pankish Goel vs ACIT

PER ANUBHAV SHARMA, JM:

This appeal preferred by the assessee against the order dated 18.12.2025 of Ld. Addl/JCIT(A) Prayagraj (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No: ITBA/APL/S/250/2025-26/1083816220(1) arising out of the assessment order dated 22.11.2019 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ACIT, Circle 63(1), Delhi for AY: 2017-18.

On hearing both sides we find that the issue involved in the appeal is the addition made by the Ld. AO of Rs.28,09,880/- under the head short term capital gain on account of transfer of DDA leasehold residential plot situated in Rohini, Delhi for which assesse had shown a capital gains of Rs. 6,97,247/- and assessing officer had considered the sale consideration of Rs.21,81,000/- to be lesser than the applicable circle rate of Rs.42,05,000/-thereby invoking the provisions of Section 50C of the Act.

Before us ld. Counsel has submitted that as with regard to sale of leasehold rights provision of Section 50C cannot be invoked and reliance has been placed on certain judicial decisions to contend that transfer of leasehold right does not warrant invocation of provisions of Section 50C of the Act. It was further contended at the time of hearing that in any case as the property rates in the vicinity were not matching the circle rates and there were distress sales due to which the property in the area were being sold on rates lesser than the circle rates but no report of DVO was called.

We find substance in the plea of the assesse with regard to proposition of law that if assessing officer is not satisfied with the valuation then report of DVO should be called. At the same time we find that the assessing officer had issued a notice calling assesse to justify the claim and why provision of Section 50C be not invoked but there was no response from the assesse and thereupon assessing officer had proceeded to invoke Section 50C. The issue of transfer of leasehold rights not being liable to Section 50C though raised before ld. CIT(A) has not been determined either way. So, we are of the considered view that the nature of leasehold rights and transfer and assignment of same is of question of fact and not merely a question of law and the same needs to be examined on the basis of necessary evidences and circumstances by the ld. Tax authorities including calling for report of DVO. Thus, we consider it appropriate case to set aside the impugned orders and restore the issue on merits as well as points of law to the assessing officer to give fresh opportunity of hearing to the assesse and pass order afresh.

The appeal is allowed for statistical purposes.