MR. GILIYAL CHANDRASHEKHARA BHAT ,MUMBAI vs. ITO WARD 24(1)(4), MUMBAI

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ITA 750/MUM/2025Status: DisposedITAT Mumbai15 October 2025AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee could not file the necessary details before the AO and the CIT(A), but these details are now available and have been submitted with an application for admission of additional evidence. In the interest of natural justice and fair play, the Tribunal deemed it appropriate to restore the issue to the file of the AO for de novo adjudication. The AO is directed to consider the details filed by the assessee and pass an order after affording a reasonable opportunity of hearing. The Tribunal set aside the impugned order on the issues raised and allowed the grounds for statistical purposes. The issue regarding the adjustment of business losses was implicitly restored to the AO for reconsideration along with the primary issue.

What were the facts?

The assessee, Mr. Giliyal Chandrashekhara Bhat, filed his return of income for Assessment Year 2015-16 declaring Nil income. The Assessing Officer (AO) initiated scrutiny proceedings. During assessment, the AO observed a difference of Rs. 92,85,800/- between the stamp duty value and the agreement price for a property purchased by the assessee. The AO added this difference to the assessee's total income under Section 56(2)(vii)(b) of the Income Tax Act, 1961, rejecting the assessee's claim that the market value at the time of allotment in 2005 should be considered. The AO also rejected the assessee's claim to set off unabsorbed business losses against other income. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who dismissed the appeal. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 92,85,800/- on account of the difference between the stamp duty value and the agreement price as income under Section 56(2)(vii)(b) of the Act by the Assessing Officer was justified. - Assessee's contention: The assessee argued that the property was allotted in 2005 and payments were made between 2005 and 2009. Therefore, the market value at the time of allotment should be considered, not the stamp duty value at the time of registration in 2014. The assessee also contended that the CIT(A) erred by dismissing the appeal without granting an adjournment to furnish requisite details, which are now available, including an allotment letter and payment details. - Revenue's contention: The revenue argued that the details now furnished by the assessee were not filed during the assessment or appellate proceedings and require examination. 2. Whether the learned CIT(A) failed to give directions to the ITO to adjust the assessed business loss against income from other sources and short-term capital gains. - Assessee's contention: The assessee sought adjustment of business losses against other income and short-term capital gains. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii),Section 250,Section 143(3),Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI SANDEEP SINGH KARHAILSHRI PRABHASH SHANKAR

For Appellant: Shri G.C. Bhat, CA
For Respondent: Shri Swapnil Choudhary, Sr. DR

Date of Hearing – 13/10/2025 Date of Order - 15/10/2025

O R D E R PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeal against the impugned order dated 05.12.2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015-16.

2.

In this appeal, the assessee has raised the following grounds: - “

1. On the facts and circumstances of the case in law, The Ld. A.O. erred in making addition of Rs. 92,85,800/-on account of difference between the stamp duty value and the agreement price as income by invoking the provisions of Sec. 56(2)(vii) by following order of ITO.

2. On the facts and in the circumstances of the case in law, the learned CIT (Appeals) has failed to give directions to the ITO to adjust the assessed business loss against the income under the head income from other sources and short-term capital gains.”

3. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual and filed his return of income on 30.09.2015 for the year under consideration, declaring a total income of Rs. Nil. The return filed by the assessee was selected for scrutiny under CASS, and accordingly, statutory notices under section 143(2) and 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee had entered into a transaction of the purchase of immovable property. On further verification of the purchase agreement dated 26.12.2014, it was observed that there is a difference of Rs.92,85,800/- between the stamp duty value and the agreement value. Accordingly, the assessee was asked to show cause as to why the said difference should not be added to his total income under section 56(2)(vii)(b) of the Act. In response, the assessee submitted that he had taken a flat in the year 2005 and the agreement was entered after the completion of the building in the year 2014. The assessee further submitted that he had made the payment from the year 2005 to 2009. It was further submitted that the flat was allotted to him in 2005 and therefore, the market value at the time of allotment should be considered instead of the market value at the time of registration of the flat. However, in the absence of details of payment made by the assessee and the copy of the allotment letter, the Assessing Officer (“AO”) vide order dated 29.12.2017 passed under section 143(3) of the Act made an addition of Rs.92,85,800/- under section 56(2)(vii)(b) of the Act. Further, the AO also rejected the claim of the assessee of set off of unabsorbed business losses under the head income from other sources and short term capital gains.

4.

The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee in the absence of documentary evidence against the addition made by the AO. Being aggrieved, the assessee is in appeal before us.

5.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that on 03.12.2024, the assessee sought an adjournment before the learned CIT(A) for furnishing the requisite details; however, without granting the adjournment, the learned CIT(A) passed the impugned order on 05.12.2024. The learned AR submitted that the details, which the assessee could not file during the assessment proceedings, such as the allotment letter dated 09.12.2005 and the details of payment for the property, are now available with the assessee, and in this regard, brought our attention to the application seeking admission of additional evidence filed separately by the assessee before us.

6.

On the other hand, the learned Departmental Representative (“learned DR”) submitted that all these details, which are now furnished by the assessee, were not filed during the assessment proceedings and were also not examined by the learned CIT(A). Accordingly, it was submitted that these details require examination, as they have been filed for the first time by the assessee.

7.

Having considered the submission of both sides and perused the material available on record, it is undisputed that the assessee could not file the details before the AO, and the same could also not be filed before the learned CIT(A), which now form part of the application seeking admission of additional evidence. Therefore, in the interest of natural justice and fair play, we deem it appropriate to restore the issue raised before us to the file of the AO for de novo adjudication after considering the details as filed by the assessee. Needless to mention, no order shall be passed without affording reasonable opportunity of hearing to the assessee. The assessee is directed to fully cooperate in the assessment proceedings and furnish all the details as may be sought by the AO for complete adjudication of the issue involved. As a result, the impugned order on the issues raised before us is set aside, and the grounds raised by the assessee are allowed for statistical purposes.

8.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 15/10/2025

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