This document presents a comprehensive review of the Income Tax Appellate Tribunal’s decision regarding the property valuation dispute between Verender Chand Dhoundiyal and the Income Tax Officer, Ward-72(1), New Delhi for the assessment year 2015-16. The case, filed under ITA No. 138/DEL/2019, concluded with the tribunal accepting the appeal and deleting the disputed addition.
Verender Chand Dhoundiyal, a resident of New Delhi, sold a property for Rs. 18,50,000. The assessing officer (AO) disputed this valuation, referencing a higher circle rate value of Rs. 36,89,280, and adjusted the valuation to Rs. 25,11,740 as per the report from the Assistant Valuation Officer (AVO). This led to a higher long-term capital gain assessment.
The AO’s adjustment was based on the perceived disparity between the declared sale price and the circle rate. Dhoundiyal contested this adjustment, arguing that the actual sale price reflected the property’s market value given its location and lack of basic amenities. Despite providing a valuation report from an approved valuer, the AO and the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the higher valuation.
The tribunal noted several key points in favor of the assessee:
Considering these factors, the tribunal ruled that the AO’s reliance on the AVO’s valuation over the approved valuer’s report was unjustified. The tribunal accepted the appeal, deleted the addition, and recognized the sale price declared by Dhoundiyal.
This case highlights the importance of using appropriate comparables and valuation methods in property assessments. The tribunal’s decision underscores the need for tax authorities to consider the actual conditions and supporting evidence provided by taxpayers. The ruling provides a significant precedent for similar property valuation disputes.
Verender Chand Dhoundiyal vs ITO, Ward-72(1), New Delhi: Property Valuation Dispute for AY 2015-16
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