RAVINDAR REDDY PALLE,HYDERABAD vs. INCOME TAX OFFICER, WARD-9(4), HYDERABAD

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ITA 207/HYD/2020Status: DisposedITAT Hyderabad21 September 2021AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal held that the lower authorities failed to make a mandatory reference to the DVO as required under the proviso to Section 56(2)(vii) for immovable property transactions. Therefore, the issue needs to be re-adjudicated.

What were the facts?

The assessee purchased an immovable property for Rs. 61,12,500, while the SRO value was Rs. 73,35,000. The lower authorities made an addition of Rs. 12,22,500 under Section 56(2)(vii)(b) of the Act.

What were the issues?

Whether the addition under Section 56(2)(vii)(b) is valid without a mandatory reference to the DVO. Whether a reference to the DVO is mandatory even if the assessee does not request it.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 50C(2)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, HYDERABAD ‘B’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA & SHRI L. P. SAHU

For Appellant: Shri Madhusudan Mannava, DR

O R D E R Per Shri S.S. Godara, J.M. : This asessee’s appeal for Asst. Year 2016-17 arises from the Commissioner of Income Tax (Appeals)-7, Hyderabad’s order dt. 11.12.2019 passed in case No. 140/2018-19 in proceedings under Section 143(3) of Income Tax Act, 1961 (‘the Act’). Heard both the parties. Case file perused.

2.

Coming to assessee’s sole substantive grievance in the instant appeal seeking to reverse both the lower authorities’ action making sec.56(2)(vii)(b) addition of Rs 12,22,500/- in the course of Ravinder Reddy Palle, Hyd. assessment dated 15.12.2018 and upheld in CIT(A)’s order, we note that the same represents difference between his purchase consideration of Rs.61,12,500 and SRO value of Rs. 73,35,000/- qua the registered deed dated 28.01.2016; respectively.

3.

Learned DR fails to rebut the clinching fact that the lower authorities have not made any reference to the DVO u/s 56(2)(vii) first proviso; applicable in case of an immovable property transaction, which is para materia to sec.50(C)(2) wherein case law CIT vs Sunil Kumar Agarwal (2014) 372 ITR 83 (Calcutta) holds that such a reference is mandatory even if the assessee concerned does not raise any such prayer. We, therefore, remit the instant issue back to the Assessing Officer for his appropriate adjudication after making the statutory reference to the DVO as per law.

4.

This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the open court on 21st September, 2021. Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member

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