HAMAJA MOHAMMED MALPEKAR,RATNAGIRI vs. INCOME TAX OFFICE, KOLHAPUR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “A” BENCH PUNE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER I.T.A.Nos.1268/PUN/2023, 2950/PUN/2025, 836/PUN/2024 & 2931/PUN/2025 (Assessment Year; 2014-15 & 2015-16) Hamaja Mohammed Income Tax Officer, Malpekar, New Central Revenue 1st floor, Ratnadeep Corner, vs. building, 2nd floor, Opp:Congress Bhuvan, Jail Road, Tilak Ali, Ratnagiri-415612, Ratnagiri-415612, Maharashtra. Maharashtra. (Appellant) (Respondent) PAN No. ABSPM9624K For Assessee : Shri Pramod S Shingte.AR For Revenue : Shri Rajesh Haladkar. Sr.DR Date of Hearing : 27.07.2026 Date of Pronouncement : 31.07.2026 ORDER PER PAVAN KUMAR GADALE, JM:- These four appeals are filed by the assessee against the separate orders of NFAC/(CIT(A) (i) ITA No. 1268/PUN/2023 for A.Y. 2014-15 passed u/sec 143(3) r.w.s263 and u/sec250 of the Act (ii) ITA No. 2950/PUN/2025 for the A.Y. 2014-15 passed order u/sec 271(1)(C) and u/sec250 of the Act (iii) ITA No. 836/PUN/2024 for the A.Y.2015-16 passed order u/sec143(3) r.w.s147 and u/sec250 of the Act And (iv) ITA No. 2931/PUN/2025 for the A.Y. 2015-16 passed order u/sec 271(1)(C) and u/sec250 of the Income Tax Act. The assessee has raised the grounds of appeal in these four appeals challenging the order of the CIT(A)/NFAC sustaining the addition/penalty levied by the Assessing Officer.

under the CASS and notice under Sections 143(2) and u/sec142(1) of the Act are issued and the case was completed u/sec 143(3) of the Act vide order dated 07.12.2016. Subsequently, the Pr.CIT on perusal of the records and information found that, the order passed by the AO under section 143(3) of the Act is erroneous and prejudicial to the interest of the revenue and accordingly issued directions to the Assessing Officer to verify and examine the issue as per the provisions of section43CAof the Act and set aside the order passed u/sec143(3) of the Act vide revision order u/sec 263 of the Act dated 18.03.2019. The assessing officer as per the directions of Pr.CIT, has issued notice u/sec 143(2) and 142(1) of the Act. Whereas the assessee has requested to provide reasons recorded for reopening of assessment for A.Y. 2014-15 on 20.11.2019 and the A.O has provided the reasons and the assessee has filed the submissions on 25.11.2019. The A.O as per the Audit report in Form.No.3CB find that the assessee has transferred the properties referred at Para 4 of the order, lower than the value adopted by the State Government Authorities and the provisions of Section 43AC of the Act are applicable. Further in compliance to the show cause notice dated 16.12.2019, the assessee has filed the detailed submissions on 19.12.2019 on the facts and on the applicability of provisions. Whereas the A.O was not satisfied with the explanations and dealt on the provisions of Section 43AC of the Act is of the opinion that the assessee has sold its assets other than capital assets at value lower than stamp duty value of state government authorities and made addition of differential amount of Rs. 57,20,300/- under Section 43AC of the Act and assessed the total income of Rs.91,27,060/- and passed the order u/sec 143 r.w.s. 263 of the Act dated 20.12.2019. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas, the CIT(A) has considered the grounds of

appeal, statement of facts, submissions of the assessee and findings of the AO and has relied on the judicial decision and observed in respect of three properties, where the difference between sale consideration and stamp duty is 10%, the same cannot be sustained and directed the A.O to grant the deduction and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal. 5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in partially sustaining the addition made by the A.O. ignoring the facts that the booking for the properties/flats was made prior to 01.04.2013, where the provisions of Section 43AC of the Act are not applicable and the stamp duty value as per government authorities are to be considered and not the year of registration of agreement and the assessee has opted for percentage of completion method (POCM) and if any addition u/sec43CA of the Act has to be restricted to the percentage of income. The Ld.AR contentions are that the provisions of Section 43CA of the Act are made applicable from Assessment Order 2014-15 and the assessee has transactions of entering into agreement in the earlier years prior to applicability of the provisions u/sec43CA of the Act and the A.O made addition without reference to the DVO valuation, when the assessee has made objections. Further, the Ld.AR submitted that the assessee has a good case on merits and prayed for an opportunity to substantiate the case with evidences and relied on the factual paper book and judicial decisions. Per Contra, the Ld.DR submitted that the assessee has not filed the application for reference to the DVO and the provisions of Section 43CA of the Act are applicable and supported the order of the CIT(A).

Ld.AR that the CIT(A) has erred in sustaining the addition made by the Assessing Officer ignoring the facts that booking of the properties, flats has taken place prior to 01.04.2013 and the the provisions of Section 43CA of the Act are not applicable. Further, the Ld.AR contentions are that the assessee has filed substantial information and the payments are received by way of cheques and the provision of Section 43CA of the Act is applicable prospectively from the A.Y. 2014-15. The Ld.AR has relied on the assesses own case for A.Y.2016-17, where on this disputed issue, the matter was restored to the file of the assessing officer in ITA No. 264/PUN/2024 for the A.Y. 2016-17 dated 27.11.2024 at Page 8 Para 3.6 of the order which is as under:-

“”3.6 As regards addition of Rs.18,00,800/- u/s 43CA of the Act made by the Ld. AO, the Ld. CIT(A) granted partial relief to the assessee in respect of five creditors viz. Flat No. A-15; A-19; C-03; C-04 and E-06 relying on the decision of the Pune ITAT in the case of Rahul Constructions Vs. DIT wherein it was held that the difference upto 10% can be ignored. In respect of other two properties i.e. A-11 and B-02 the Ld. CIT(A) sustained the addition made by the Ld. AO on the ground that the assessee failed to prove or rebut the facts and findings of the Ld. AO with cogent evidence. The relevant observations and finding of the Ld. CIT(A) are reproduced as under :

“9.1 The AO observed from the audit report that the auditor has disallowed / reported the transactions where the provision of the sec. 43CA is applicable to the tune of Rs. 37,23,800/- but in the return of income the same amount has not been offered for taxation. As the assessee was duty bound to include the truly and correctly income in the original return of income, but the assessee has not included intentionally to avoid burden of tax. Since the assessee firm is duly guided by the ld. CA but failed to offer its correct income. Further in this case, the provisions of sec. 43CA are squarely applicable to the amount of Rs. 3,21,700/-.

9.2 I have considered the assessment order, facts of the case, grounds of appeal, statement of facts and the submissions made by the appellant during the appeal proceedings. The threshold for the difference between the consideration and the stamp duty value is 10%. The appellant had quoted the decision of the Hon’ble Pune ITAT in the case of Rahul Constructions Vs. DIT wherein it was held that the difference upto 10% can be ignored. Respectfully following the decisions as cited above, the addition made by the AO on the five properties viz. Flat No. A-15; A-

19; C-03; C-04 and E06 cannot be sustained in appeal and is directed to grant the deduction. Assessee gets partial relief.

9.2.1 The provisions of sec. 43CA have been inserted by the Finance Act, 2013 w..e.f. 1.4.2014 relevant to A.Y. 2014-15 and if we look at the provisions of subsection (3) and sub section (4), it emphasizes a scenario where the date of agreement fixing value of consideration for transfer of the assets and date of registration are not the same and provides that the value as on the date of agreement would be considered provided the amount of consideration or part thereof has been received by any mode other than cash on or before the date of agreement for transfer of the assets. Therefore, the provisions of sec. 43CA(3) shall apply only in a case where the amount of consideration or a part thereof has been received by way of account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as maybe prescribed on or before the date of agreement for transfer of the asset.

9.2.2 If the following conditions are satisfied, the AO may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the I T Act –

(i) where the assessee claims before the AO that the value adopted or assessed or assessable by the stamp valuation authority exceeds the fair market value of the property as on the date of transfer; and (ii) the value so adopted or assessed or assessable by stamp valuation authority has not been disputed, in any appeal or revision or no reference has been made before any authority or court or High Court is made applicable under section 43CA also.

In the instant case, the assesee has not made any claim before the AO to refer the case to the DVO. Therefore, the AO passed the assessment order by invoking the provisions of sec. 43CA of the I T Act.

9.2.3 In this case, the AO held that no agreement / agreement to sale was executed between purchaser and seller for any of the property mentioned above. It is also necessary here that as per information furnished by the assessee, the assessee had accepted cash for advance payment in respect of the properties mentioned above. Therefore, the provisions of subsection (3) of sec. 43CA are not applicable in this case. 9.2.4 The submissions of the appellant are not convincing. In the appellate proceedings, burden of proof lies on the assessee to prove that facts and findings of the AO are incorrect. If the assessee fails to prove or rebut with cogent evidence against such facts and findings, no interference is required with assessment order. Therefore, the addition made by the AO in respect of the properties units at A-11 and B-02 are sustained and the grounds raised in this regard is partly allowed.”

“1. On the facts and circumstances of the case and in law the Ld. CIT(A), NFAC, erred in confirming the decision of the Income Tax Officer, Ward 1, Ratnagiri (hereinafter referred to as the ITO) of taxing the gains on sale of flat held as investment by the appellant as business income as against capital gains as claimed by the appellant.

a. Stamp Duty Value need to be taken of the year of booking and not of the year of Registered Agreement.

b. The appellant having been following POCM (Percentage of Completion Method) addition if any u/s 43CA ought to have been restricted to the percentage of income applied.

c. The addition made by AO without reference to the DVO is invalid, particularly when the appellant having objected to adoption.

The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.”

ITA No. 23/PUN/2024, AY 2016-17 by the Revenue

“1. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in allowing assessee’s ground of appeal challenging addition of Rs.1,65,66,500/- made u/s 41(1) of the Act, being balance of sundry creditors and genuineness of which were not established by the assessee during the assessment proceeding.

evidences/additional evidences filed by the assessee before him during the appellate proceedings without calling for remand report from the Ld. AO. We, therefore, find force in the arguments of the Ld. DR that the provisions of Rule 46A has been violated. 9. Considering the totality of the facts and on the facts and circumstances of the case set out above and in the interest of justice and fair play, we deem it proper to restore the matter back to the file of Ld. AO with a direction to verify all the issues raised by the assessee as well as by the Revenue in its respective ITA No. 264/PUN/2024 and ITA No. 23/PUN/2024 in light of the supporting documentary evidence(s) filed by the assessee during the appellate proceedings and also any other fresh documentary evidence(s) that may be filed by the assessee in support of his claim. The Ld. AO shall make the assessment afresh after due verification on merits as per the facts and law. The assessee is hereby directed to produce all the details/documents that were filed before the Ld. CIT(A) and any further details/documents as may be called upon by the Ld. AO on the appointed date without seeking any adjournment under any pretext failing which the Ld. AO is at liberty to pass appropriate order as per law. We hold and direct accordingly. Consequently, the grounds raised by the assessee in ITA No. 264/PUN/2024 and by the Revenue in ITA No. 23/PUN/2024 are allowed for statistical purposes. 9. To sum up, the appeal of the assessee in ITA No. 264/PUN/2024 and appeal of the Revenue in ITA No. 23/PUN/2024 are allowed for statistical purposes.” 7. Accordingly, we considering the facts, circumstances, and disputed issue in the present appeal is similar to the issue dealt by the Honble Tribunal in the assessee appeal in above paragraphs and fallow the judicial precedenc. Accordingly, set-aside the order of the CIT(A) on the disputed issue and to meet the ends of justice, we restore the disputed issues to the file of the Assessing Officer to verify and adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. And, we allow the grounds of appeal of the assessee for statistical purposes.

ITA.No.836/PUN/2024 for the A.Y. 2015-16

ITA No. 2950/PUN/2025, A.Y. 2014-15 & ITA No. 2931/PUN/2025, A.Y. 2015-16

Order pronounced in the open Court on 31.07.2026. (PAVAN KUMAR GADALE) JUDICIAL MEMBER पुणे/Pune, Dated: 31st July, 2026 Abhishek Mohan Abhishek Digitally signed by Abhishek Mohan Mohan Date: 2026.07.31 16:33:57 +05'30' आदेश की प्रतितितप अग्रेतिि / Copy of the Order forwarded to : अपीिार्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. 4. तिभागीय प्रतितिति, आयकर अपीिीय अतिकरण, “(A)” बेंच, पुणे/ DR, ITAT, “(A)” Bench, Pune. गार्डफ़ाइि / Guard File. 5. ITA.No.1268/PUN/2023

आदेशािुसार / BY ORDER,