SANJAY NAVALSHANKER MEHTA ,MUMBAI vs. INCOME TAX OFFICER 29(3)(3), MUMBAI

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ITA 53/MUM/2026Status: DisposedITAT Mumbai09 June 2026AY 2015-164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the DVO's report estimated the property value only slightly higher than the assessee's declared value. Therefore, the matter was restored to the AO for verification and to allow appropriate relief to the assessee.

What were the facts?

The assessee declared a property value lower than the stamp duty valuation. The Assessing Officer referred the matter to the Valuation Officer (DVO) but passed the assessment order before receiving the report due to time bar. The CIT(A) dismissed the appeal ex-parte.

What were the issues?

Whether the CIT(A) was justified in passing an ex-parte order without considering the DVO's report and whether the addition under Section 56(2)(x) was warranted given the DVO's valuation.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 250

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by assessee is directed against the order of Ld.

CIT(A)/ADDL/JCIT(A)-2, Ahmedabad dated 11.12.2025 for A.Y. 2015-16. The

assessee has raised following grounds of appeal:

“1. Whether the Addl. /JCIT (A) is justified in passing an ex parte appeal order in spite of the appellant having filed a request for adjournment on the appointed date i.e. 10.12.2025 vide Transaction No. IDF05008325576558 dated 10.12.2025.

2.

Whether the Addl. /JCIT (A) is justified in mentioning non-compliance to the notice issued under section 250 dated 04.12.2025.

3.

Whether the Addl. /JCIT (A) is justified in confirming the addition under section 56(2) (vii) (b) when the date of booking and the date of registration are different and the booking amount has been paid by cheque.

4.

Whether the Addl./JCIT (A) is justified in passing the order in violation of the principle of natural justice by not affording a proper opportunity of being heard, when the appellant had applied for adjournment on the appointed date i.e. 10.12.2025 and the order has been passed on 11.12.2025.

5.

The appellant, by letter dated 29.07.2017, has brought to the notice of the AO that the date of booking and the date of registration are different and that the stamp duty valuation on the date of booking is to be taken and not the valuation on the date of registration which is being taken.

6.

On the merits of the case also, the appellant is in possession of all documents to justify that section 56(2) (vii) (b) is not applicable.

7.

Without prejudice to the above grounds of appeal, on the facts and in the circumstances of the case and in law, the CIT (A) has erred in dismissing the appellant's appeal in a summary manner without considering the subject issue on merits; therefore, the appeal may kindly be restored to the CIT (A) for fresh adjudication.

8.

The CIT (A) has erred in not inquiring about the valuation report from AO when it was referred to the Valuation Cell at the instance of the Assessee to the Income Tax department. the AO has specifically mentioned in the assessment order that till the date of passing of the order no such report has been received considering the limitation of time assessment is completed based on the value as determined by the state Government authority.

9.

The appellant craves leave to add, alter or modify these grounds of appeal.”

2.

Rival submissions of both the parties have been heard and record perused.

The Ld. Authorised Representative (ld. AR) of the assessee submits that during

assessment the Assessing Officer (AO) issued show cause notice for proposing

addition under section 56(2)(x) of Rs. 23,02,700/- on account of difference vis-

à-vis, the market value declared by the assessee on registered sale deed and

the value determined by stamp valuation authority (SVA) in respect of

transaction of a flat bearing no. 205, 2nd Floor, F Wing, Whispering Towers,

Bombay Oxygen Compound, L.B.S. Marg, Mulund (W), Mumbai – 400080. The

assessee declared the value at Rs. 1.04 Crore. The SVA valued the property /

asset at Rs. 1.27 Crore. On the request of assessee, the AO made reference to

DVO for determination of market value of the asset (flat). The DVO has not

given his report, the matter was getting time barred, hence the AO passed the

assessment order on 26.12.2017. The assessee filed appeal before ld. CIT(A).

The ld. CIT(A) dismissed the appeal in ex-parte has not considered the report

of DVO. The assessee sought adjournment on certain occasion. The report

of DVO was received subsequently wherein, he has estimated value of asset

at Rs. 1.07 Crore only. The ld. AR of the assessee submits that matter may be

restored back to the file of AO or to ld. CIT(A) to consider the report of DVO

and the objections of assessee against such report and to pass the order in

accordance with law.

3.

On the other hand, the learned Senior Departmental Representative (ld. Sr.

DR) for the revenue submits that he has no objection if the matter is restored

to the file of ld. CIT(A). However, the assessee may be directed to be more

vigilant in making timely compliance to provide all details necessary or

adjudication of appeal.

4.

We have considered the rival submission of both the parties and find that AO

proposed the addition under section 56(2)(x) on account of difference vis-à-

vis, the sale value declared by assessee and the value determined by stamp

valuation authority for the purpose of registration of transaction of flat. We

also find that request of assessee, the AO made reference to DVO for

estimation of fair market value as on the date of transaction of flat. Admittedly

report of DVO was not received till passing of assessment order. The assessee

has filed copy of report of valuation officer wherein he has estimated the value

of flat no. 205, 2nd Floor, F Wing, Whispering Towers, Bombay Oxygen

Compound, L.B.S. Marg, Mulund (W), Mumbai – 400080 in his report dated

29.01.2018. The relevant part of report of DVO is extracted below:

Property: “Flat No. 205, 2nd Floor, E-Wing, Whispering Towers, situated at Bombay Oxygen Compound, LBS Marg, Mulund(W), Mumbai – 80”

Fair Market Value (as on 24.06.2014) 1. Build up area of the flat 121.31 sqm 2. Derived BUA rate as on 24.06.2014 Rs. 88771/- per sqm 3. Fair Market Value of flat as on 24.06.2014 (121.31X88771/-) Rs. 1,07,68,810/- Say Rs. Rs. 1,07,69,000/- (Rupees One Crore Seven Lakh Sixty Nine Thousand only)

Sd/- (ineligible)

(K.R. Ravindran) Valuation Officer-II I.T. Dept. Mumbai-12

5.

In view of the aforesaid position, we find that the difference vis-à-vis value

declared by assessee and value estimated by DVO is only of 2.00%, therefore,

the matter is restored back to the file of AO to verify the fact and allow

appropriate relied to the assessee in accordance with law. The assessee is also

given liberty to file his objection if any against report of DVO. In the result, the

grounds of appeal raised by the assessee are allowed for statistical purpose.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order was pronounced on 09/06/2026.

Sd/- Sd/-

MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 09/06/2026 Biswajit

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); By order (4) The DR, ITAT, Mumbai; and (5) Guard file.

Assistant Registrar ITAT, Mumbai

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