AWADHNARAYAN BHAGWANTA SINGH,MUMBAI vs. ITO 4(1)(2), MUMBAI

The brief facts of the case are that the assessee filed his return of income, which was processed under section 143(1) of the Act. The case was subsequently selected for limited scrutiny through CASS. During the assessment proceedings, it was noticed that the assessee had purchased a property for Rs.1,10,00,000/-, whereas the stamp duty valuation of the same property, as on 30/03/2017, was Rs.1,69,87,000/-. The Ld. AO, therefore, added the differential amount of Rs.59,87,000/-, being the difference between the stated consideration and the value adopted by the stamp valuation authority, by invoking the provisions of section 56(2)(vii)(b) of the Act. The assessee, being aggrieved, preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) partly allowed the appeal. In respect of the applicability of section 115BBE, the Ld. CIT(A) granted relief to the assessee; however, the addition of Rs.59,87,000/- made under section 56(2)(vii) was upheld. The assessee has now filed the present appeal before us.

The Ld. AR appeared and filed a paper book containing pages 1 to 215, which is taken on record. The Ld. AR submitted that the assessee was allotted the property vide allotment letter dated 29/11/2012 issued by M/s Shah Housecon Pvt. Ltd. in respect of Flat No. B-3102 (APB page 69). The assessee had made advance payment of Rs.5,00,000/- through the banking channel on 18/08/2011, drawn on Canara Bank, Matunga Branch. A copy of the receipt is placed at APB page-66, and the corresponding bank statements reflecting the payments to the promoter are annexed at APB pages 10 to 13. The Ld. AR submitted that all relevant documents in support of the assessee’s claim were furnished before the Ld. AO vide letter dated 14/11/2019. The Ld. AO Awadhnarayan Bhagwanta Singh accepted the proposition that the valuation of the property should be considered with reference to F.Y. 2012-13, relevant to A.Y. 2013-14. However, in the absence of a contemporaneous valuation report, the Ld. AO proceeded to adopt the stamp duty valuation pertaining to the impugned assessment year.

In the first appellate proceedings, the Ld. CIT(A) observed that the assessee had not furnished any documentary evidence in support of his claim. The Ld. AR, however, drew our attention to APB pages 80 to 156, demonstrating that all such documents were, in fact, submitted before the Ld. CIT(A). Despite the availability of these documents, the Ld. CIT(A) failed to consider or verify them and proceeded to uphold the addition.

The Ld. DR argued and relied on the order of the revenue authorities.

We have heard the rival submissions and examined the documents available on record. A plain reading of the proviso to Section 56(2)(vii)(b) of the Act reveals the following: