KANAI MAJI,PURULIA vs. ITO,WARD-2(2). , ASANSOL

Kanai Maji 2. Though the assessee has taken three grounds of appeal, but these grounds contain sub-grounds. In brief, his grievance is that the ld. CIT(Appeals) has erred in confirming the addition of Rs.13,26,455/-, which was added by the ld. Assessing Officer with the aid of section 56(2)(vii)(b) of the Income Tax Act. The ld. CIT(Appeals) has failed to provide proper opportunity of hearing to the assessee.

Brief facts of the case are that the assessee has filed his return of income on 30.03.2015 for A.Y. 2014-15 declaring total income of Rs.7,84,920/-. The case of the assessee was selected for scrutiny assessment and on scrutiny of the accounts it revealed that the assessee has purchased two plots during the accounting period relevant for this assessment year. The details of such purchases have been noticed by the ld. Assessing Officer on page no. 2 of the assessment order. A perusal of those details would reveal that there was a difference between transaction value, vis-a-vis valuation determined by the Stamp Duty Valuation Authorities for charging the Stamp Duty. This difference in the value has been worked out at Rs.13,26,455/-. The ld. Assessing Officer was of the view that this difference is to be deemed as income of the assessee from other sources under section 56(2)(vii)(b) of the Income Tax Act. Accordingly he made the addition of this amount.

Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.

The ld. Counsel for the assessee submitted that as far as application of section 56(2)(vii)(b) is concerned, there is no dispute. The assessee has submitted that he has purchased the plots for the value, which is being shown in the Registered Document. In case, the actual value is being replaced by deemed purchase cost, then matter should have been referred to the DVO for determining fair market value of the property on the date of transaction. This prayer of the assessee has not been accepted by both the authorities. He further submitted that once assessee is contesting for this deeming cost of purchase, then it should be construed that a dispute has been raised by the assessee and automatically a reference should be made to the DVO to determine the fair market value of the property on the date of transaction.

With the assistance of ld. Representatives, we have gone through the record carefully. Since the order of the ld. CIT(Appeals) has been passed by the National Faceless Appellate Authority, nothing is discernable from this order whether prayer for obtaining report of DVO was made or not made, but taking cognizance of the fact

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on May 23, 2023.