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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Sanjay Garg & Shri Rajesh Kumar]
17.05.2023 Date of Hearing / सुनवाई क% �त'थ Date of Pronouncement/ 25.07.2023 आदेश उ*घोषणा क% �त'थ For the Appellant/ Shri Siddharth Agarwal, Advocate �नधा�0रती क% ओर से For the Respondent/ Shri Vijay Kumar, Addl. CIT Sr. DR राज�व क% ओर से ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 31.01.2023 for the AY 2015-16.
Issue raised in ground no. 1 and 2 is against the confirmation of addition of Rs. 88,46,925/- by the Ld. CIT(A) as made by the AO u/s 56(2)(vii)(b)(ii) of the Act.
Facts in brief are that during the course of assessment proceedings, the AO observed that the assessee has purchased immovable property on 17.05.2014 and as per registration done with valuation authority the market price of the property was Rs.
Assessment Year: 2015-16 Gautam Kumar HUF 1,09,50,000/- whereas the actual paid up price of Rs. 10,00,000/- towards purchase consideration. Accordingly the AO came to the conclusion that the difference in the value of purchase consideration and value as per stamp value authority attracts the provisions of Section 56(2)(vii)(b)(ii) of the Act and consequently an addition was made to the income of the assessee in the assessment framed u/s 143(3) of the Act dated 26.12.2017.
3. In the appellate proceedings, the Ld. CIT(A) has dismissed the appeal of the assessee.
After hearing the rival contentions and perusing the material on record, we observe that the assessee has purchased immovable property on 17.05.2014 for consideration of Rs. 1,09,50,000/- and there is a difference in the value as per purchase price as per stamp value of Rs. 88,46,925/-. The Ld. Counsel for the assessee pleaded before Bench that this property has been purchased under distress sale and therefore consideration was Rs. 10,00,000/- only against the stamp valuation authority of Rs. 1,09,50,000/-. We find merit in the contention of the Ld. A.R that though there is a huge difference between the purchase consideration and stamp value however the AO is duty bound to refer the issue to the DVO and only thereafter made the addition u/s 56(2)(vii)(b)(ii) of the Act. However in the present case, we note that the AO has made the addition without referring the issue to the DVO which in our opinion is wrong and it is for this reasons the addition cannot be sustained. The case of the assessee finds support from the decision of Jurisdictional High Court in the case of Sunil Kumar Agarwal vs. CIT in [2014] 47 taxmann.com 158 (Cal) wherein it was held that the even in a case where a lawyer/advocate representing the assessee, has not made any specific instruction, the AO discharging the quashi judicial function is duty bound to follow the course provided by law. The Hon’ble High Court has held that the capital gain should not be calculated on the basis of value as per District Sub-Registrar without first referring to the issue of valuation to DVO. We therefore, respectfully following the decision of Hon’ble Jurisdictional High Court ,set aside the order of Ld. CIT(A) and restore the issue back to the file of AO to adjudicate the case de novo
Assessment Year: 2015-16 Gautam Kumar HUF after obtaining value from the DVO and after giving a reasonable opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 25th July, 2023