# NRI Land Sale: ITAT Rejects DVO's Unexplained 2001 Value Cut By Saurabh Garg, founder·6 min read·Published 2026-10-10 **Short answer:** On 7 October 2026 ITAT Chennai sided with a non-resident who sold 2.44 acres of inherited land with her sister for ₹35 crore. The tax officer had replaced her registered valuer's 1 April 2001 value of ₹405 a square foot with the department valuer's ₹395, and disallowed ₹18,47,500 of improvement costs paid in cash. The Tribunal held that the department valuer's own working gave ₹465 and he cut it to ₹395 without a reason, so the registered valuer's figure stands. It also deleted the cash disallowance. Both sisters' appeals were allowed. # An NRI Sold Inherited Land for ₹35 Crore. ITAT Chennai Kept Her Valuer's 2001 Figure Over the Department's **On 7 October 2026 the Income Tax Appellate Tribunal in Chennai held that the tax department could not swap a non-resident seller's 1 April 2001 land value for its own valuer's lower figure, because its valuer cut his own number without giving a reason. The seller and her sister had sold 2.44 acres together for ₹35 crore. The Tribunal also struck out a disallowance of improvement costs paid in cash.** ## The case The order covers two appeals heard together: ITA No. 668/CHNY/2026, *Suganthi Srinivasan v. Income Tax Officer, International Taxation Ward, Coimbatore*, and ITA No. 669/CHNY/2026, *Shanmugasundaram Jayanthi v. Income Tax Officer, International Taxation Ward, Coimbatore*. Both are for assessment year 2023-24. The 'A' Bench heard them: SS Viswanethra Ravi, Judicial Member, and Padmavathy S., Accountant Member, who wrote the order. The hearing closed on 18 September 2026 and the order was pronounced on 7 October 2026. It runs to 11 pages. The Tribunal took the first appeal as the lead case. The order records that the lead seller "is an individual and a non-resident" (para 2). It does not record the residence of her sister. ## What happened The seller filed her return for assessment year 2023-24 on 29 July 2023, declaring total income of ₹8,75,88,810. The case was picked for scrutiny. The officer found that she had sold immovable property of 2.44 acres together with her sister for a total of ₹35 crore (para 2). The order does not say where the land is. The land was inherited, according to her representative (para 3). For the cost of acquisition she took the value as on 1 April 2001 at ₹2,15,44,172 for her half. She backed it with a report from a registered valuer, M/s C. Shanta Associates, which put the whole land at ₹4,30,45,992 on that date, or ₹405 a square foot (paras 2 and 3). She also claimed ₹74,68,500 as cost of improvement (para 2). The officer referred the 2001 value to the Departmental Valuation Officer (DVO), who put her half at ₹2,09,92,000, or ₹395 a square foot. The officer adopted the DVO's figure, recomputed the long-term capital gain, and disallowed ₹18,47,500 of the improvement cost because it was paid in cash and the source was, in his view, unexplained. The Dispute Resolution Panel upheld both (para 2). ## What the Tribunal found on the 2001 value The Tribunal read the DVO's report. The DVO had himself arrived at a fair market value of ₹465 a square foot as on 1 April 2001, working from a guideline value of ₹600 a square foot as on 1 August 2007 for a commercial class-I area, and had said the land had "high potential for development of large-scale business" (para 8). He then gave a final figure of ₹395 "without attributing any reason or basis for arriving at the said number" (para 8). The registered valuer's ₹405 differed from the DVO's ₹395 "by only about 2.5%" (para 9). The Tribunal held that "a marginal and unexplained reduction of this nature cannot be a ground to displace the value supported by the registered valuer's report" (para 9). It rejected the department's argument that the DVO had used a scientific method, since the DVO's own working led to ₹465 (para 9). It directed the officer to delete the addition. The seller had also argued that a DVO reference can be made only for the sale consideration and not for the cost of acquisition. The Tribunal did not decide that point and "left open" (para 9) the question. ## What the Tribunal found on the cash payments The officer had refused the cash payments on the ground that, after demonetisation on 8 November 2016, the seller could not have held enough cash in valid notes (para 5). The Tribunal found that ₹7,50,000 was paid between 15 August and 14 October 2016, before demonetisation, and another ₹7,50,000 between 15 April and 20 May 2017, well after it. The two sisters paid ₹4,00,000 to an advocate for patta transfer on 15 January 2017, confirmed by the advocate (para 10). The lower authorities had recorded no adverse finding on that evidence, and the department brought no material to question it (para 10). The Tribunal directed the officer "to delete the disallowance of cost of improvement" and "to re-compute the LTCG considering the valuation given by the registered valuer" (para 10). The sister held the other half. Her facts on the 2001 value were identical, her cash payments ran from 7 January to 20 May 2017 and were supported by confirmation, and she got the same relief (para 11). Both appeals were allowed (para 12). ## Why it matters if you sell inherited land from abroad For land held since before 2001, the 1 April 2001 value is often the largest number in the capital gains working, and the department can send it to its own valuer. This order turned on the DVO's report itself: his working pointed to ₹465 and his final figure gave no reason for ₹395. A report that explains its number stands on different ground. Two notes on the figures. Half of ₹4,30,45,992 is ₹2,15,22,996, not the ₹2,15,44,172 the order records. The order also calls the gap "merely 3%" in the seller's submission (para 3) and "about 2.5%" in its own finding (para 9). We repeat the order's figures as written. This is a report of one order, not tax advice. How the 2001 value and inherited cost work is in our guide to [capital gains on inherited property for NRIs](/guides/capital-gains-on-inherited-property-nri), and the wider sale picture is in [capital gains tax for NRIs selling property](/guides/capital-gains-tax-nri-property). ## FAQ **What did the seller sell, and for how much?** 2.44 acres of land, sold together with her sister for a total of ₹35 crore, in the year covered by assessment year 2023-24. The order does not say where the land is. **Why did the Tribunal reject the department's valuation?** The DVO's own working gave ₹465 a square foot as on 1 April 2001, and he reduced it to ₹395 without stating a reason. The Tribunal held that a marginal, unexplained reduction cannot displace a registered valuer's figure of ₹405. **Did the Tribunal decide whether the DVO can value the cost of acquisition at all?** No. The seller raised it as an alternative argument. Because the case was decided on the valuation itself, the Tribunal left the point open. **What happened to the cash improvement costs?** The ₹18,47,500 disallowance was deleted. Part of the cash was paid before demonetisation, part well after it, and the lower authorities had made no adverse finding on the evidence filed. **Was the second seller also a non-resident?** The order describes the lead seller as a non-resident. It does not state her sister's residence. The sister received the same relief on identical facts. *66 MG Road newsdesk* ## Sources - Income Tax Appellate Tribunal, Chennai 'A' Bench, *Suganthi Srinivasan v. ITO, International Taxation Ward, Coimbatore*, ITA No. 668/CHNY/2026, with *Shanmugasundaram Jayanthi v. ITO*, ITA No. 669/CHNY/2026, AY 2023-24, pronounced 7 October 2026, full text: [https://indiankanoon.org/doc/97480096/](https://indiankanoon.org/doc/97480096/) About the author: [Saurabh Garg](/about) Saurabh Garg has run the venture studio C4E for twenty years. He founded 66 MG Road in 2026, reads every proposal request, and replies within one business day. [saurabhgarg.com](https://saurabhgarg.com) · [@saurabh](https://x.com/saurabh) · [LinkedIn](https://www.linkedin.com/in/saurabhgarg) Information on this page is as on 2026-10-10. Rules, rates, deadlines and government portals change without notice, so verify against the official source before you act. This page is for information only. It is not tax or legal advice, and it is not a substitute for a qualified adviser who knows your position. ## Related guides - [Capital Gains Tax on Inherited Property in India for NRIs](/guides/capital-gains-on-inherited-property-nri) - [Capital Gains Tax for NRIs on Property: The Post-2024 Regime](/guides/capital-gains-tax-nri-property) - [Inheriting Property in India as an NRI: From Death Certificate to Money in Your Account](/guides/inheriting-property-india-nri) - [An NRI Sold a Property and Filed No Return. ITAT Chennai Deleted the 200% Penalty, Because the Notice Named No Charge](/guides/nri-property-sale-no-return-270a-penalty-deleted-itat-chennai-oct-2026) ## Compare and cost - [The NRI Property Management Companies in India: A Comparison You Can Check](/guides/best-nri-property-management-companies-india) - [What NRI Property Management Costs in India: The Four Models and What Hides in Each](/guides/nri-property-management-cost-india) - [NoBroker NRI Services Review: What the Pages Promise and What They Leave Out](/guides/nobroker-nri-services-review) --- Source: [https://66mgroad.com/guides/nri-inherited-land-2001-valuation-dvo-rejected-itat-chennai-oct-2026](https://66mgroad.com/guides/nri-inherited-land-2001-valuation-dvo-rejected-itat-chennai-oct-2026) · 66 MG Road. Full LLM brief: https://66mgroad.com/llms.txt