KHALIL JAFFAR SHAIKH,MUMBAI vs. ITO WARD-41(4)(2), MUMBAI

The Assessee challenged the said addition before the Ld. Commissioner. However, the Ld. Commissioner, considering the absence of relevant documentary evidence and the fact that the Assessee had not specifically requested the AO to refer the valuation of the property to the DVO, affirmed the addition made by the AO.

Thus, the Assessee being aggrieved has preferred the instant appeal.

We have heard the parties, perused the material available on record and considered the rival submissions. No doubt, the Assessee failed to file the relevant documents before the authorities below, as were required for the proper and just adjudication of the case. However, the Assessee has filed a paper book before us containing, inter alia, a copy of the registered agreement for sale dated 13.04.2016, stamp duty valuation, photographs of the building and surrounding areas, the seller’s affidavit and the Assessee’s bank passbook.

The Assessee has certified that the documents mentioned at Sr. Nos. 2 to 4 of the paper book, namely, the registered agreement for sale, stamp duty valuation and photographs of the building and surrounding areas, were filed before the AO. However, a perusal of the assessment order does not reflect the filing or consideration of the said documents. Thus, though we are inclined not to approve the conduct of the Assessee in failing to properly place the relevant material before the authorities below, however, at this stage, it would not be appropriate to

Coming to the merits of the case, we observe that the payment of stamp duty on the value determined by the stamp valuation authority is not in controversy. The limited controversy relates to the difference between the stamp duty value and the actual consideration paid and disclosed by the Assessee. The photographs placed on record support the claim of the Assessee regarding the dilapidated condition of the building and the surrounding areas. The material further reflects that the property subsequently formed part of an SRO project.

The Assessee has also placed on record an affidavit of the seller explaining that the property was sold below the stamp duty value having regard to the prevailing market conditions, the deteriorated condition of the building and the financial constraints faced by the seller. Further, no material is available on record to establish that the Assessee has paid any amount over and above the consideration recorded in the registered agreement for sale.

We further observe that the authorities below did not dispute that the entire consideration was paid through banking channels. Thus, the peculiar facts and circumstances available on record reasonably explain the sale of the property at a consideration lower than the stamp duty value. Even otherwise, despite the difference between the stated consideration and the stamp duty value, the AO has not referred the valuation of the property to the DVO.

Thus, on the aforesaid analyzations and even otherwise, we do not find any justification for sustaining the addition of Rs.6,53,500/- u/s 56(2)(vii)(b) of the Act. Accordingly, the same is deleted.