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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI AMARJIT SINGH
आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 21.03.2023 for A.Y. 2018-19. The assesse has raised the following grounds before us: “1. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [hereinafter referred as CIT(A)] erred in confirming the action of the AO in making the addition of Rs. 3,97,250/- by invoking section 56(2) of the Income Tax Act, 1961 (Act).
2. The CII(A) erred in upholding the action of the AO in not making reference to valuation Officer u/s 142A of the Act for determining the value of immovable property bought by the Appellant.
P a g e | 2 Hitesh Jayesh Dhakan Vs. ITO, NFAC
The CIT(A) erred in holding that making reference of valuation to the valuation officer is discretion of the AO.
The CIT(A) erred in upholding the action of the AO in not considering the value of flat on immediate next floor to consider the value of the property bought by the Appellant. The Appellant craves leave to add, amend, modify the above grounds of appeal
.”
2. Fact in brief is that the case of the assessee was subject to scrutiny assessment u/s 143(3) of the Act. During the course of assessment the assessing officer noticed that assessee has purchased a flat situated at E-building, B- Wing, Gawade Nagar, S.N. Dube Road, Dahisar East, Mumbai jointly with his father Mr. Jayesh Keshavlal Dhakan. The assessing officer further noticed that consideration of Rs.40 lac was paid for the purchase of said property whereas the stamp duty value of the property was Rs.47,94,500/-. On query regarding the differences of Rs.7,94,500/- the assessee explained that the building was old and in dilapidated condition, however, the assessing officer has not agreed with the submission of the assessee and added half of this amount of Rs.7,94,500/- to the amount of Rs.397,250/- (being share of the assessee in the joint property).
3. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
4. During the course of appellate proceedings before me the ld. Counsel submitted that the impugned property was jointly held by the assessee along with his father and referred copies of document filed before lower authorities as placed in the paper book pertaining to valuation made by the District Valuation Officer of the similar flat in the same building in the case of relative Hetal Ashok Dhakan in whose case the DVO has valued the same property at Rs.41 lac. The ld. Counsel also referred the copy of assessment order made in the case of Hetal P a g e | 3 Hitesh Jayesh Dhakan Vs. ITO, NFAC Ashok Dhakan for the same assessment year 2018-19 wherein stated that the property was in a dilapidated condition. On the other hand, the ld. D.R supported the order of CIT(A).
5. Heard both the sides and perused the material on record. The assessee has purchased immovable property as referred above in this order jointly with his father for Rs.40 lac as against the value determined by the stamp duty valuation authority of Rs.47,94,500/-. The assesse has also explained that AO has not referred his case to the DVO for determining the fair value of immovable property u/s 55A/50C(2) of the Act. During the course of assessment proceeding the assessee has referred the BMC notice that building was in dilapidated conditions and dangerous for living therefore said property had already gone for redevelopment. The assessee vide submission dated 12/02/2021 before the AO also stated the facts of valuation made by the DVO on the similar property occupied by his relative Ms. Hetal Ashok Dhakan wherein the DVO had determined fair market value of the property at Rs. 4,13,39,30/-. The AO has not brought on record any material contrary to the submission made by the assessee. The assessee has also submitted the relevant supporting documents showing that in the case of his relative on the similar flat in the same building the DVO has valued the property at Rs.41,33,930/- u/s 55A of the Act similar to the case of the assessee after taking into consideration the DVO report for valuation made in the case of similar property in the same building at Rs.41,33,930/- as discussed above, the difference remained is only of Rs.1,33,930/- (share of assessee comes to Rs.66,965/-) after reducing agreement value of Rs. 40 lac. Looking to the marginal difference in the fair market value determined by the DVO or assessable by stamp valuation authority therefore, considering the provision of section 50C(1) of the Act. I find that decision of ld. CIT(A) in sustaining P a g e | 4 ITA No.1846/Mum/2023 Hitesh Jayesh Dhakan Vs. ITO, NFAC the addition is not justified, therefore, appeal of the assesse is allowed. Since I have allowed ground no. 1 & 4 therefore, other ground no. 2 & 3 of the assessee become infructuous and not required any adjudication.