SHYAM SUNDER BHAETI,JODHPUR vs. ITO, WARD-1(4), JODHPUR
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Income Tax Appellate Tribunal, JODHPUR BENCH ‘SMC’, JODHPUR
Before: SHRI SAKTIJIT DEY, VICE- & SHRI GIRISH AGRAWAL
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH ‘SMC’, JODHPUR BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No. 57/Jodh/2020 Assessment Year: 2016-17 (Through Virtual Mode) Late Sh. Shyam Sunder Bhaeti, Versus Income-tax Officer, Through L/h. Ram Kishore Bhaeti Ward-1(4),Jodhpur. 122 C, Krishna Mandir Road, Subhash Chowk, Ratanada, Jodhpur. PAN: AIOPB9503H (Appellant) (Respondent) Assessee by : Ms. Divya Phophalia, C.A. Revenue by : Sh. Rajeev Mohan, JCIT-DR Date of hearing : 14.09.2023 Date of pronouncement: 20.09.2023
ORDER This is an appeal by the assessee against order dated 24.12.2019 of learned Commissioner of Income-tax (Appeals)-1, Jodhpur for the assessment year 2016-17.
At the outset, we must observe, since, the assessee has died
during the pendency of present appeal, he has been substituted
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through his legal heir. Be that as it may, the only dispute in the
present appeal is with regard to addition of an amount of
Rs.4,65,187/- under section 56(2)(vii)(b) of the Income-tax Act, 1961.
Briefly, the facts are, the deceased assessee was a resident
individual. For the assessment year under dispute, the assessee has
filed its return of income on 15.03.2017 declaring income of
Rs.2,36,390/-. In course of assessment proceedings, while examining
the materials on record, the Assessing Officer noticed that in the
assessment year under consideration, the assessee had purchased
an immovable property for a declared sale consideration of
Rs.60,00,000/-. However, on the date of registration of the sale deed
on 24.09.2015, the stamp duty authority has determined the value of
the property at Rs.83,25,800/- for stamp duty purpose. Noticing this
fact, the Assessing Officer was of the view that the difference in value
as per the declared sale consideration and as determined by stamp
duty authority has to be treated as income under section 56(2)(vii)(b)
of the Act. Though, the assessee objected to the proposed addition,
however, rejecting the objection of the assessee, the Assessing
Officer added an amount of Rs.13,56,717/- to the income of the
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assessee by taking the share of the assessee in the sale
consideration at 58.33%. The assessee contested the aforesaid
addition before learned first appellate authority. Partly accepting
assessee’s contention, learned first appellate authority held that
since, the property purchased was co-owned by five individuals,
assessee’s share in the deemed sale consideration can be computed
at 20%. Accordingly, he restricted the addition to Rs.4,65,187/-.
We have considered rival submissions and perused materials
on record. Basically, the contention of the assessee is two-fold.
Firstly, in case there is an objection against the value determined by
the stamp valuation authority, the Assessing Officer is duty bound to
make a reference to the Departmental Valuation Officer (DVO) to
determine the value of the property. Whereas, the Assessing Officer
has not followed the statutory mandate. Secondly, the assessee
along with other co-owners had executed agreement to sale on
12.08.2010. Whereas, due to some dispute arising out of tenants
occupying the property, the final sale deed could be registered only
on 07.10.2015. Thus, according to the assessee, the rate prevailing
on the date of execution of agreement to sale should be taken as the
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value of property and not the value of property determined on the
date of registration of sale deed.
We find substantial merit in the aforesaid contention of the
assessee. On a conjoint reading of section 56(2)(vii)(b) of the Act,
which is applicable to a purchaser of immovable property and section
50C, which is applicable to a seller of immovable property, it is
observed that both have pari materia provisions. The third proviso to
section 56(2)(vii)(b) enjoins upon the Assessing Officer a duty to refer
the valuation to the DVO in case the assessee disputes the stamp
duty valuation. Further, the first proviso to section 56(2)(vii)(b) makes
it clear that if the date of agreement fixing the amount of sale
consideration and the date of registration are not the same, the stamp
duty valuation on the date of agreement to sale can be taken as the
deemed sale consideration. Thus, if we examine the facts of the
present appeal keeping in view the aforesaid statutory provisions, it is
very much clear that the Assessing Officer has not complied with the
condition of third proviso to section 56(2)(vii)(b) of the Act. Whereas,
he failed to apply the benefit given under the first proviso to section
56(2)(vii)(b) of the Act. Thus, in our view, the addition made on this
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score is unsustainable. Accordingly, we delete the addition sustained
by learned first appellate authority.
In the result, appeal is allowed.
Order pronounced in the open court on 20/09/2023. Sd/- Sd/- (GIRISH AGRAWAL) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT
Dated: 20.09.2023 *aks/-
