DATTATRAYA TRIMBAKRAO DESHMUKH,MUMBAI vs. INCOME TAX OFFICE WARD 19(1)(1), PIRAMAL CHAMBERS

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.2942/Mum/2026 (Assessment Year: 2017-18) Income Tax Officer 23(3)(6) Dattatraya Trimbakrao Deshmukh Piramal Chamber, Mumbai – 400012. 16 Baug, E Sara BLDG, Vs. Nepeansea Road, A K Marg, A K Marg, Mumbai- 400036. PAN: ABVPD4251E

Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Anish Shah Revenue by : Smt. B. Brahma Vidya (Sr. DR.) Date of Hearing : 13.05.2026 Date of Pronouncement : 06.07.2026 O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, to challenge the order of

Commissioner of Income Tax Appeals/ National Faceless Appeal Centre (NFAC),

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh Delhi [“the Ld. CIT(A)], dated 20.01.2026 for the assessment year 2017-18 which

in turn arises from the order u/s. 147 dated 19th May, 2023 for the assessment

year 2017-18 passed by The Assessment Unit Income Tax Department. The

ground of appeal raised by the assessee are as under:

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in

confirming the assessment framed u/s 147 r.w.s. 148, despite the same being procedurally and

jurisdictionally flawed. The Ld. AO acted in contravention of the Act by issuing 2 notices u/s

148 i.e. dated 30/6/2021 & 29/7/2022 failing to obtain proper approvals, neglecting to conduct

an independent inquiry, such procedural lapses render the assessment order null and void, and

it is humbly prayed that the same be quashed.

2 a) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred

in confirming the impugned orders without affording adequate opportunity of being heard,

including denial of personal hearing through video conferencing despite specific requests made

by the appellant, thereby violating the principles of natural justice.

b) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred

in not considering the detailed replies and explanations submitted by the appellant, including

reply dated 18th November 2024, along with detailed paper books consisting of factual and

legal index and thus the impugned additions are based on incorrect facts and assumptions.

3a) On the facts and in the circumstances of the case and in law, the learned CIT(A)

erred in ignoring/overlooking the valuation of another co-owner of the same property which

was submitted vide letter dated 18th November 2024.

b) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred

in confirming an addition of Rs. 2,51,000/-u/s 56(2)(vii)(b) being the appellant's alleged 1/3rd

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh share of difference between stamp duty value and agreement value, and the learned CIT(A)

further erred in confirming the same without appreciating that the addition was made

mechanically, that the appellant had specifically requested reference to the Valuation Officer,

and that failure to invoke valuation cell renders the addition unsustainable in law.

c) On the facts and in the circumstances of the case and in law, the CIT(A) erred in not

referring the matter to the Valuation Cell despite multiple written requests, and the learned

CIT(A) erred in confirming the addition without addressing this mandatory requirement,

rendering the addition bad in law.

4a) On the facts and in the circumstances of the case and in law the learned CIT(A)

erred in not appreciating the fact that the Agricultural Income earned by your appellant for the

year ended under consideration amounted to Rs. 10,03,050/- and not Rs. 16,18,987/-

(typographical error of punching an agriculture income of assessment 2015-16) and

categorically pointed out in the show cause letter dated 12 May 2023 during assessment

proceedings.

4b On the facts and in the circumstances of the case and in law, the learned CIT(A)

failed to appreciate that the agriculture income of Rs. 10,03,050/-was in fact used in making

payment (reflected at Page No. 17 of ITR Schedule Et Details of exempt income) and not Rs.

16.18.987/- as erroneously taken by assesseee vide reply dated 22nd April 2023

4c) On the facts and in the circumstances of the case and in law, the learned CIT(A)

erred in failing to consider the comprehensive written submissions and documentary evidence

running into 434 pages filed by the Appellant on 18th November 2024 vide Acknowledgement

No. 716428931191124. The learned CIT(A) further erred by selectively reproducing only a

fraction of these submissions in Para 4, Page No 3-4 of the impugned order, thereby passing

the same in violation of the principles of natural justice

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming an arbitrary addition of 16,15,937/-. The Ld. CIT(A) failed to appreciate that the appellant had duly disclosed an agricultural income of ₹10,03,050/ in the return of income for the impugned AY 2017-18, whereas the figure of ₹16,18,067/- pertained to the AY 2015-16 and was supported by relevant records. The addition, made merely due to a typographical error of the agricultural incomes of two distinct assessment years, is entirely baseless, without legal merit, and ought to be deleted.

from interest and dividends. The original ITR for the relevant year was filed on

12.07.2017 declaring total income at Rs. 1,44,860/-, claiming exemption of

agricultural income amounting to Rs. 9,07,050/-. The information was received

by the Ld. AO that the assessee had purchased a part property in “Baug-e-sare”

building at Nepean-Sea-Road, Mumbai having an agreement value of Rs.

37,00,000/-. The value of said property was taken at Rs. 44,53,000/- by the

Stamp Duty Valuation Authority. Therefore, it is considered by the Ld. AO that

the assessee had failed to offer the difference between the value of property as

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh per Stamp Duty Valuation and actual purchase considered for Rs. 7,53,000/-. The

Ld. AO, therefore, invoked the provision of section 147/148 and initiated

reopening assessment proceeding against the assessee. Statutory notices were

issued and a query was raised to the assessee as to why one-third of Rs.

7,53,000/- that is Rs. 2,51,000/- be not treated as the income of assessee under

the provisions of section 56(2)(7)(b) of the Act. Also, the assessee was queried

to explain about the nature and source of Rs. 12,33,333/- being one-third of

purchase price of the property when the assessee is the owner for one-third

share. In response, the assessee submitted that the property was purchased

from him. Agricultural income earned during the year for Rs. 16,18,987/- which

is duly reflected in assessee’s return. The Ld. AO after verification of assessee’s

return is informed that for the year under consideration, the assessee has shown

an income of Rs. 10,03,050/- from his agricultural head whereas the explanation

was given for Rs. 16,18,982/-. Accordingly, the difference amount of Rs.

6,15,937/- is treated as unexplained income of the assessee and added back to

the income of assessee. The assessment accordingly was completed with two

additions u/s. 56(2)(vii)(b) and on account of income from one more source.

Being aggrieved, the assessee preferred an appeal before the Ld. CIT(A). Raising

therein, the issue of referring the matter to valuation cell u/s. 50C of the Act also

has raised the issue that the assessee was not provided with sufficient

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh opportunities of being heard. The Ld. CIT(A) deliberated on the issues, however,

was not agreed with the contentions raised by the assessee and, therefore, had

concluded that the Ld. AO has rightly made the additions, the appeal of assessee

has been rejected accordingly. Against the aforesaid findings of Ld. CIT(A), the

assessee is in appeal before us.

adopted by the Stamp Duty Valuation Authority was not correct as the assessee

has objected to such valuation. As per correct Government published rate, the

valuation of property was to be Rs. 36,91,841/-, which is below the actual

amount paid by the assessee along with co-byers. It is also submitted that there

was a typographic error in mentioning the assessment year by the assessee,

while substantiating the nature and source of funds invested by the assessee.

The agricultural income of Rs. 16,18,987/- pertains to AY 2015-16, which was

wrongly mentioned by the assessee as AY 2017-18. The same, therefore, has to

be looked into under such facts on record. In support of assessee’s contentions,

the Ld AR has furnished a written submission stating therein the violation of

principal of natural justice, as the assessee was not provided with sufficient

opportunities before the Ld. AO as well as there was a violation of procedural

mechanism set out under Rule 46A by the Ld. CIT(A), who accepted the

additional evidence furnished by the assessee but no remand report was issued

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh by the Ld. AO. Under such circumstances, it was the prayer by assessee to quash

the assessment proceedings treating the same as null and void.

the orders of revenue authorities. We have considered the rival submissions and

perused the materials available on record and the jurisprudence relied upon.

Admittedly, in present case the amount of agricultural income of assessee are

mis-represented at the assessment stage, wherein an inadvertent error was

committed, as the assessee has wrongly mentioned the agricultural income of

Rs. 16,18,987/- to be A.Y. 2017-18 instead of AY 2015-16. It is also submitted

before us that the assessee has earned the agricultural income in last three years

and, therefore, has sufficient funds to invest the amount of his share in the

alleged property. Regarding valuation, the assessee’s contention to refer the

matter to valuation of officer or valuation cell cannot be denied by the Ld. AO.

Further, if the assessee has furnished additional evidence before the Ld. CIT(A),

the same needs to be verified and a holistic approach has to be adopted by him

so as to arrive at a judicious conclusion. We, under the aforesaid facts and

circumstances of case are inclined to set aside this matter back to the file of Ld.

AO to reconsider the facts of the case in light of contentions raised by the

assessee, wherein reasonable opportunity of being heard shall be provided to

the assessee to furnish necessary evidences in support of his contentions. The

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh assessee is directed to furnish all necessary information and evidence, so as to

assist the Ld. AO in finding out the legitimate taxable income of the assessee in

accordance with the provisions of the Act. In case the assessee desires for a

reference to DVO in terms of provisions of Section 50C, the same may be

allowed.

30th June, 2021 under erstwhile provisions and the second dated 29.07.2022.

The same cannot be accepted as the second notice was issued following the

binding directions of Hon’ble Supreme Court in the case of PCIT v. Abhisar

Buildwell P. Ltd. (2023)454 ITR 212/ 293 Taxman 141/ 332 CTR 385/ 225 DTR

105 (SC).

Order pronounced in the open court on 06-07-2026.

Sd/- Sd/- (BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 06-07-2026. Soumili Das, PS

ITA No. 2942/Mum/2026; Dattatraya Trimbakrao Deshmukh Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai