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Facts
The Assessing Officer (AO) made an addition of Rs. 69,89,659/- under section 56(2)(x) of the Income Tax Act, representing the difference between the sale document value and the State Government's stamp value of a property purchased by the appellant. The appellant's appeal before the CIT(A) was dismissed due to non-response. The appellant then appealed to the ITAT.
Held
The Tribunal condoned the delay in filing the appeal due to the death of the appellant's Chartered Accountant. While hearing the matter on merits, the appellant's AR conceded that certain facts were not presented to the AO and requested the matter be remitted. The Tribunal agreed to remit the issue to the AO for fresh examination.
Key Issues
Whether the addition made by the AO under section 56(2)(x) is correct, and if the addition should be restricted to the appellant's share in the property.
Sections Cited
56(2)(x), 234B
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Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
From the assessment order, it is observed that the Ld. AO made an addition of Rs. 69,89,659/- under section 56(2)(x) of the Act which deals with difference between the value mentioned in sale document and the cost determined by State Government for stamp value purposes. The Ld. AO has mentioned that the value of properties purchased is Rs. 2,59,89,659/- as per stamp value determined by State Government whereas the appellant has mentioned that properties were purchased at Rs. 1,90,00,000/-. The difference between these two values comes to Rs. 69,89,659/- and the same was added by Ld. AO under section 56(2)(x) of the Act.
2 Vedprakash Pannalal Gupta
Aggrieved by the addition made by Ld. AO, an appeal was filed by appellant before the first appellate authority [Ld. CIT(A)]. The Ld. CIT(A) posted the case for hearing four times and there is no response from the appellant and hence the appeal of appellant was dismissed.
As the appellant did not succeed in the appeal filed before Ld. CIT(A), an appeal was filed before ITAT with the following grounds :- 1. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax-Appeals, National Faceless Appeal Centre erred in dismissing the appeal without considering the submissions of the appellant on the income tax portal.
2. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax-Appeals, National Faceless Appeal Centre ought to have deleted the addition of Rs.69,89,659/- u/s 56(2)(x) of the Income Tax Act, 1961.
3. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax-Appeals, National Faceless Appeal Centre ought to have made reference to the valuation officer as per the request of the appellant in order to substitute ready reckoner value with the correct market value of the property as the per valuer's report.
4. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax-Appeals, National Faceless Appeal Centre ought to have restricted the addition of Rs.69,89,659/- to Rs.23,29,886/- being one third share as the property was in the joint name of the appellant and his parents i.e. father Mr. Pannalal Gupta and mother Mrs. Sitadevi Gupta.
5. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax-Appeals, National Faceless Appeal Centre ought to have deleted interest charged of Rs.8,18,784/- u/s 234B of the Income Tax Act, 1961.
During the appeal proceedings before ITAT, it was noticed that the appeal was filed with a delay of 216 days and the Ld. AR of the appellant has submitted that the delay was attributed to the death of his chartered accountant who was dealing his tax matters. Accordingly, Ld. AR of the appellant filed an affidavit stating that his Chartered Accountant, Mr. Subhash Desai passed away on 2.1.2024 and his son who took over the 3 Vedprakash Pannalal Gupta practice of his father is not well versed with the appeal matter. So, another CA was appointed and hence there is delay. The Bench is convinced with the reasons mentioned by Ld. AR of the appellant and hence the delay in filing the appeal is condoned and proceeded to hear the matter on merits. The Ld. AR of the appellant has submitted that he has a very good case on merits, but due to the death of CA, the facts were not properly mentioned before Ld. CIT(A) and hence the appeal was dismissed by him. The Ld. AR has submitted before the Bench that the immovable property purchased by appellant is having litigation with respect to occupancy certificate, there is poor ventilation, certain water leakages were also there etc. Hence, the property was purchased at the price lesser than market price. But, these arguments were not taken before Ld. CIT(A) nor examined by Ld. AO.
Ld. DR relied on lower authorities.
Heard both sides. As the delay was condoned, now the Bench is deciding the issue on merits. The Ld. AR fairly conceded that there facts were not before the Ld. AO and requested the Bench to remit the matter to Ld. AO for verification. Accordingly, the Bench agreed to remit the issue to the file of Ld. AO. The Ld.AO is directed to examine all the issues and pass the order afresh after giving an opportunity to the appellant.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 01/10/2025.