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Facts
The assessee purchased a property with his wife for Rs. 45 lakhs, while the stamp duty value was Rs. 51,80,824. The difference of Rs. 3,40,412, being the assessee's share, was taxed as income under Section 56(2)(x). A valuation report later accepted the transaction value.
Held
The Tribunal noted that a subsequent valuation report confirmed the transaction value of Rs. 45 lakhs. Therefore, the matter was remitted to the Assessing Officer to consider this report and grant relief to the assessee.
Key Issues
Whether the addition made under Section 56(2)(x) is sustainable when a subsequent valuation report accepted the transaction value declared by the assessee.
Sections Cited
56(2)(x)
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Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH : MUMBAI
Before: JUSTICE (RETD.) SHRI C.V. BHADANG & SHRI VIKRAM SINGH YADAV
Assessment Year : 2018-19 Paras Ramlal Jaiswar, Income Tax Officer, Flat No.4, Parijat Bldg, Ward-42(1)(4), Pandey Nagar, Raval Pada, vs. Room No. 736, Dahisar East, Kautilya Bhavan, Maharashtra-400068. Bandra Kurla Complex, PAN : AFDPJ3068H Mumbai-400051. (Appellant) (Respondent) For Assessee : Shri Devendra Jain For Revenue : Shri G.J. Ninawe, Sr.DR Date of Hearing : 27-11-2025 Date of Pronouncement : 27-11-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 14-05-2025, pertaining to Assessment Year (AY) 2018-19, wherein the assessee has taken the following grounds of appeal:
“1. In the facts and circumstances of the case and in law, the Learned, Faceless Appeal Centre (NFAC), CIT (Appeals) has erred in confirming the addition under section 56(2)(x) treating difference between Purchase Consideration and Stamp Duty Value as income and making addition of Rs. 3,40,412/- to the total Income of the appellant disregarding the factual and legal matrix of the case.
2. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals), has erred in passing an order without considering the Valuation Officer's Order dated 28.02.2024.
3. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals), has erred in passing an order not considering on merit the documents submitted by the appellant thereby grossly violating the principles of Natural Justice.
In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in not providing personal hearing to the appellant thereby grossly violating the principles of Natural Justice.”
At the outset, it is noted that there is a delay in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the affidavit placed on record the contents of which have not been rebutted by the Revenue, we find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication.
Briefly the facts of the case are that the assessee has purchased a property jointly with his wife for a transaction value of Rs. 45 lakhs, having stamp duty value of Rs. 51,80,824/-. During the course of assessment proceedings after calling for the necessary information and documentation, the amount of Rs. 3,40,412/- being the assessee‟s share in the differential amount between transaction value and the stamp duty value, was brought to tax as „income from other sources‟ u/s. 56(2)(x) of the Income Tax Act, 1961 („the Act‟). Separately the matter was also referred to DVO and since the DOV‟s report had not come, the assessment proceedings were completed leaving open the matter relating to rectification, if required after receipt of the report from the DVO. Accordingly, as against the returned income of Rs. 12,22,560/-, the assessed income was determined at Rs. 15,62,972/- by making an addition of Rs. 3,40,412/- u/s. 56(2)(x) of the Act.
4. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has sustained the addition so made by the AO and against the said order, the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that valuation report has since been issued by the Valuation Officer vide his order u/s. 56 of the Income tax Act r.w.s. 16A(3) of the Wealth Tax Act, dt. 28-02- 2024, wherein the Valuation Officer has accepted the valuation of Rs. 45 lakhs, being the transaction value as declared by the assessee. It was accordingly submitted that addition so made and sustained by the Ld.CIT(A) be directed to be deleted in light of the acceptance of the transaction value by the Valuation Officer.
The Ld.DR has been heard, who has relied on the findings and the orders of the lower authorities. At the same time, it was submitted that since the valuation report has come subsequent to the passing of the assessment order, the matter may be remitted to the file of the AO for necessary verification.
We have heard the rival contentions and perused the material available on record. During the course of assessment proceedings, the matter was referred to Valuation Officer. However, pending the receipt of the valuation report, the assessment was completed, wherein differential amount between transaction value and stamp duty value was brought to tax in the hands of the assessee to the extent of his share in the property. However, subsequently, the valuation report has since been submitted by the valuation officer and a copy of the valuation report has been placed on record by the Ld.AR, wherein the Valuation Officer vide his order dt. 28-02-2024 has determined the value of the property at Rs. 45 lakhs as declared by the assessee. We, therefore, find merit in the contention of the Ld. AR and remit the matter to the file of the AO to take into consideration the valuation report so submitted by the Valuation Officer and grant the necessary relief to the assessee.