M/S AVANT HERITAGE IV REALTY LLP (NOW KNOWN AS AVANT HERITAGE IV REALTY PVT LTD ) ,MUMBAI vs. DCIT-CIRCLE-1(1)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 5872/MUM/2025 Assessment Year: 2018-19

M/s. Avant Heritage IV Realty DCIT-CIRCLE-1(1)(1) LLP (now known as Avant Room No. 533, 5th Floor, Heritage IV Realty Pvt Ltd ) Vs. Aayakar Bhavan, M.K.Road, B-301, 3rd Floor, Business Mumbai-400020, Maharashtra. Square Solitaire Park, Andheri Kurla Road, Andheri East., Mumbai-400093, Maharashtra. PAN NO. ABIFA 4305 R Appellant Respondent

: NONE Assessee by : Shri. Surendra Mohan, (SR. DR) Revenue by

: 21/04/2026 Date of Hearing : 05/05/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal, preferred by the assessee, is directed against the order dated 02.09.2024 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the CIT(A)”] for Assessment Year 2018– 19, raising multiple grounds assailing, inter alia, the addition

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sustained under Section 56(2)(x) of the Income sustained under Section 56(2)(x) of the Income-tax Act, 1961, as tax Act, 1961, as follows:

“1. The National Faceless Appeal Centre erred in law, facts and The National Faceless Appeal Centre erred in law, facts and The National Faceless Appeal Centre erred in law, facts and circumstances of the case by confirming the a circumstances of the case by confirming the addition of Rs. 4,59,45,000/ ddition of Rs. 4,59,45,000/- u/s 56(2)(x) of the Income Tax Act, 1961. 56(2)(x) of the Income Tax Act, 1961. 2. The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/- u/s 56(2)(x) of the Income Tax Act, 1961 on th Income Tax Act, 1961 on the ground that the purchase consideration is less e ground that the purchase consideration is less than the stamp duty value of the property and the difference of amount has than the stamp duty value of the property and the difference of amount has than the stamp duty value of the property and the difference of amount has exceeded fifty thousand rupees and also five percent of the sale consideration exceeded fifty thousand rupees and also five percent of the sale consideration exceeded fifty thousand rupees and also five percent of the sale consideration paid by the Assessee. paid by the Assessee. 3. The National Faceless The National Faceless Appeal Centre erred in law, facts and circumstances Appeal Centre erred in law, facts and circumstances of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/- u/s 56(2)(x) of the Income Tax Act, 1961 and ignoring the fact that the property purchased by Income Tax Act, 1961 and ignoring the fact that the property purchased by Income Tax Act, 1961 and ignoring the fact that the property purchased by the Appellant is considered under stock in trade a the Appellant is considered under stock in trade and the provisions of section nd the provisions of section 56(2)(x) is applicable to the property in the nature of capital asset and does 56(2)(x) is applicable to the property in the nature of capital asset and does 56(2)(x) is applicable to the property in the nature of capital asset and does not apply to stock not apply to stock-in trade, raw material and consumable stores of any in trade, raw material and consumable stores of any business of such recipient. business of such recipient. 4. The National Faceless Appeal Centre erred in The National Faceless Appeal Centre erred in law, facts and circumstances law, facts and circumstances of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/ of the case by confirming the addition of Rs. 4,59,45,000/- u/s 56(2)(x) of the Income Tax Act, 1961 and ignoring the fact that the Assessee was not given Income Tax Act, 1961 and ignoring the fact that the Assessee was not given Income Tax Act, 1961 and ignoring the fact that the Assessee was not given the opportunity to file an objection against the District Valuation repo the opportunity to file an objection against the District Valuation repo the opportunity to file an objection against the District Valuation report by serving the Draft District Valuation Officer order. serving the Draft District Valuation Officer order. 5. The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances of the case by confirming the addition of Rs. 4, 59 ,45,000/ of the case by confirming the addition of Rs. 4, 59 ,45,000/ of the case by confirming the addition of Rs. 4, 59 ,45,000/- under section 56(2)(x) of the Income 56(2)(x) of the Income-tax Act, 1961, without duly appreciating that the t duly appreciating that the Learned Departmental Valuation Officer failed to consider a material fact, Learned Departmental Valuation Officer failed to consider a material fact, Learned Departmental Valuation Officer failed to consider a material fact, namely, the presence of a flowing drain adjacent to the property, which namely, the presence of a flowing drain adjacent to the property, which namely, the presence of a flowing drain adjacent to the property, which significantly affects and diminishes its fair market value. significantly affects and diminishes its fair market value. 6. The National Fac The National Faceless Appeal Centre erred in law, facts and circumstances eless Appeal Centre erred in law, facts and circumstances of the case by confirming the addition of Rs. 4, 59, (45000 / ( of the case by confirming the addition of Rs. 4, 59, (45000 / ( of the case by confirming the addition of Rs. 4, 59, (45000 / (- u)) / s 56(2)(x) of the Income Tax Act, 1961 and ignoring the fact tha of the Income Tax Act, 1961 and ignoring the fact tha of the Income Tax Act, 1961 and ignoring the fact that the amount of Rs.45,51,000/- has been recorded as value of land in the books of Accounts has been recorded as value of land in the books of Accounts has been recorded as value of land in the books of Accounts and the balance amount of Rs. 2,90 the balance amount of Rs. 2,90,92,851/- has been considered in the has been considered in the sales. 7. The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances The National Faceless Appeal Centre erred in law, facts and circumstances of the case by confirming the addition of the case by confirming the addition of Rs. 4,59,45,000/ of Rs. 4,59,45,000/- under Section 56(2)(x) of the Income 56(2)(x) of the Income-tax Act, 1961 without appreciating the fact that the tax Act, 1961 without appreciating the fact that the

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Appellant had transferred 6 flats free of cost and had paid only a monetary Appellant had transferred 6 flats free of cost and had paid only a monetary Appellant had transferred 6 flats free of cost and had paid only a monetary consideration of Rs.45,00,000/ consideration of Rs.45,00,000/- to the vendors, as per the mutually a to the vendors, as per the mutually agreed terms of the transaction. Accordingly, the Appellant has rightly accounted for terms of the transaction. Accordingly, the Appellant has rightly accounted for terms of the transaction. Accordingly, the Appellant has rightly accounted for Rs. 45,51,000/-, inclusive of charges, in its books of accounts. The Appellant , inclusive of charges, in its books of accounts. The Appellant , inclusive of charges, in its books of accounts. The Appellant is entitled to deduct Rs. 3,41,80,000/ is entitled to deduct Rs. 3,41,80,000/- (comprising of Rs. 45,51,000/ (comprising of Rs. 45,51,000/- plus value of 6 flat amounting Rs. 2,90,92,851/ amounting Rs. 2,90,92,851/- totaling to Rs. 3,41,80,000/ totaling to Rs. 3,41,80,000/-) as the purchase price, therefore the National Faceless Appeal Centre erred in the purchase price, therefore the National Faceless Appeal Centre erred in the purchase price, therefore the National Faceless Appeal Centre erred in treating the Asset at Rs. 45,51,000/ treating the Asset at Rs. 45,51,000/- instead of Rs. 3,41,80,000/ instead of Rs. 3,41,80,000/- leading the addition made devoid of merit, both fact addition made devoid of merit, both factually and legally, and is liable to be ually and legally, and is liable to be deleted. 8. The Appellant states that the order passed u/s 250 of the Income Tax Act, The Appellant states that the order passed u/s 250 of the Income Tax Act, The Appellant states that the order passed u/s 250 of the Income Tax Act, 1961 by the National Faceless Appeal Centre (NFAC) in the month of 1961 by the National Faceless Appeal Centre (NFAC) in the month of 1961 by the National Faceless Appeal Centre (NFAC) in the month of September 2024 was inadvertently missed due to the change in th September 2024 was inadvertently missed due to the change in th September 2024 was inadvertently missed due to the change in the staff and new employees were employed who were not aware about the case and new employees were employed who were not aware about the case and new employees were employed who were not aware about the case and order passed u/s 250 of the Act, 1961. This leads to delay in filing an appeal order passed u/s 250 of the Act, 1961. This leads to delay in filing an appeal order passed u/s 250 of the Act, 1961. This leads to delay in filing an appeal of 327 days. The non of 327 days. The non-compliance of notice was unintentional and bonafide. compliance of notice was unintentional and bonafide. 9. Your Appellant craves Your Appellant craves leave to add to, alter, amend, delete and/or modify leave to add to, alter, amend, delete and/or modify the above grounds of appeal on or before the final date of hearing. the above grounds of appeal on or before the final date of hearing. the above grounds of appeal on or before the final date of hearing.” 2. Briefly stated, the material facts are that the assessee had Briefly stated, the material facts are that the assessee had Briefly stated, the material facts are that the assessee had acquired an immovable property for a total consideration of acquired an immovable property for a total consideration of acquired an immovable property for a total consideration of ₹3,41,80,000/-, whereas the stamp duty value of the said property, , whereas the stamp duty value of the said property, , whereas the stamp duty value of the said property, as determined by the Sub-Registrar, stood at ₹11,24,58,000/ as determined by the Sub 11,24,58,000/-. The Assessing Officer noticed that the purchase consideration was Assessing Officer noticed that the purchase consideration was Assessing Officer noticed that the purchase consideration was substantially lower than the stamp duty value and that the substantially lower than the stamp duty value and that the substantially lower than the stamp duty value and that the al exceeded both ₹50,000/- and the prescribed percentage differential exceeded both and the prescribed percentage threshold, he invoked the provisions of Section 56(2)(x) of the Act threshold, he invoked the provisions of Section 56(2)(x) of the Act threshold, he invoked the provisions of Section 56(2)(x) of the Act and made an addition of ₹7,82,78,000/-It is pertinent to note that, and made an addition of It is pertinent to note that, at the time of completion of the assessment, the valuation report of at the time of completion of the assessment, the valuation repo at the time of completion of the assessment, the valuation repo the Departmental Valuation Officer (DVO) was not available and, the Departmental Valuation Officer (DVO) was not available and, the Departmental Valuation Officer (DVO) was not available and, therefore, the Assessing Officer could not factor the same into the therefore, the Assessing Officer could not factor the same into the therefore, the Assessing Officer could not factor the same into the assessment order, but with a caveat that appropriate rectification assessment order, but with a caveat that appropriate rectification assessment order, but with a caveat that appropriate rectification would follow upon receipt of the said report. would follow upon receipt of the said report.

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3.1 The ld CIT(A), while taking cognizance of the DVO’s valuation, The ld CIT(A), while taking cognizance of the DVO’s valuation, The ld CIT(A), while taking cognizance of the DVO’s valuation, restricted the fair market value of property Rs.5,04,96,000/-. The restricted the fair market value of property Rs.5,04,96,000/ restricted the fair market value of property Rs.5,04,96,000/ Ld. CIT(A) observed that the assessee recorded in the books of Ld. CIT(A) observed that the assessee recorded in the books of Ld. CIT(A) observed that the assessee recorded in the books of accounts value of stock in trade to the extent Rs.45,51,000/-. accounts value of stock in trade to the extent Rs.45,51,000/ accounts value of stock in trade to the extent Rs.45,51,000/ Therefore, the Ld. CIT(A) issued notice u/sec. 251 to explain the Therefore, the Ld. CIT(A) issued notice u/sec. 251 to explain the Therefore, the Ld. CIT(A) issued notice u/sec. 251 to explain the source of the funds utilized for purchase of the land and justify the source of the funds utilized for purchase of the land and source of the funds utilized for purchase of the land and adjustment on account of unexplained investment. But no reply adjustment on account of unexplained investment. But no reply adjustment on account of unexplained investment. But no reply was filed on behalf of the assessee. The Ld. CIT(A) after considering was filed on behalf of the assessee. The Ld. CIT(A) after considering was filed on behalf of the assessee. The Ld. CIT(A) after considering the market value as per DVO’s valuation at Rs.5,04,96,000/- and the market value as per DVO’s valuation at Rs.5,04,96,000/ the market value as per DVO’s valuation at Rs.5,04,96,000/ thereafter subtracting the value of the land re thereafter subtracting the value of the land recorded in the books corded in the books of accounts of the assessee amounting to Rs.45,51,000/-, sustained of accounts of the assessee amounting to Rs.45,51,000/ of accounts of the assessee amounting to Rs.45,51,000/ no addition to the extent of Rs.4,59,45,000/ no addition to the extent of Rs.4,59,45,000/-.

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any adjournment sought. In these circumstances, we proceeded to any adjournment sought. In these circumstances, we proceeded to any adjournment sought. In these circumstances, we proceeded to hear the learned Departmental Representative and to adjudicate the hear the learned Departmental Representative and to adjudicate the hear the learned Departmental Representative and to adjudicate the matter ex parte qua the assessee on the basis of material available matter ex parte qua the assessee on the basis of material available matter ex parte qua the assessee on the basis of material available on record.

“2. to I respectfully submit that I was not aware of the hearing notice issued “2. to I respectfully submit that I was not aware of the hearing notice issued “2. to I respectfully submit that I was not aware of the hearing notice issued u/s 250 of the Income Tax Act, 1961 dated 05.08.2024 and 23.08.2024 by u/s 250 of the Income Tax Act, 1961 dated 05.08.2024 and 23.08.2024 by u/s 250 of the Income Tax Act, 1961 dated 05.08.2024 and 23.08.2024 by the National Faceless Appeal C the National Faceless Appeal Center (NFAC), The said hearing notice were enter (NFAC), The said hearing notice were sent through e-mail accounts@avantinfra.com. This e mail accounts@avantinfra.com. This e-mail ID is commonly mail ID is commonly used by several employees and the e used by several employees and the e-mails relevant to their respective work mails relevant to their respective work are usually accessed and attended by the concerned employees. The are usually accessed and attended by the concerned employees. The are usually accessed and attended by the concerned employees. The employee who was handling the matter resigned from the job without any employee who was handling the matter resigned from the job without any employee who was handling the matter resigned from the job without any prior notice on 29.06.2024. Due to the sudden resignation of the said prior notice on 29.06.2024. Due to the sudden resignation of the said prior notice on 29.06.2024. Due to the sudden resignation of the said employee and the appointment of new employee in his place who was not employee and the appointment of new employee in his place who was not employee and the appointment of new employee in his place who was not aware of the about the pending Income Tax ma aware of the about the pending Income Tax matter, the regular work flow tter, the regular work flow related to Income tax matter was disturbed. Therefore, the e related to Income tax matter was disturbed. Therefore, the e related to Income tax matter was disturbed. Therefore, the e-mail received from the Income Tax department remain unattended. As the notice dated from the Income Tax department remain unattended. As the notice dated from the Income Tax department remain unattended. As the notice dated 05.08.2024 and 23.08.2024 were not responded, which ultimately lead to 05.08.2024 and 23.08.2024 were not responded, which ultimately lead to 05.08.2024 and 23.08.2024 were not responded, which ultimately lead to passing of the order u/s 250 of the Income Tax Act, 1961 dated 02.09.2024. he order u/s 250 of the Income Tax Act, 1961 dated 02.09.2024. he order u/s 250 of the Income Tax Act, 1961 dated 02.09.2024. Further, the said order came to my attention only when my Chartered Further, the said order came to my attention only when my Chartered Further, the said order came to my attention only when my Chartered Accountant informed about the order passed by the Commissioner of Income Accountant informed about the order passed by the Commissioner of Income Accountant informed about the order passed by the Commissioner of Income Tax (Appeals) u/s 250 of the Act. This leads to dela Tax (Appeals) u/s 250 of the Act. This leads to delay in filing an appeal y in filing an appeal

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before the Hon'ble Income Tax Appellate Tribunal. However immediately upon before the Hon'ble Income Tax Appellate Tribunal. However immediately upon before the Hon'ble Income Tax Appellate Tribunal. However immediately upon becoming aware of the said order, we filed an appeal before the Hon'ble becoming aware of the said order, we filed an appeal before the Hon'ble becoming aware of the said order, we filed an appeal before the Hon'ble Income Tax Appellate Tribunal. Income Tax Appellate Tribunal. 3. I further submit that the delay in filing the appeal 3. I further submit that the delay in filing the appeal was unintentional. was unintentional. 4. In the circumstances, I most respectfully pray that the delay of 327 days in 4. In the circumstances, I most respectfully pray that the delay of 327 days in 4. In the circumstances, I most respectfully pray that the delay of 327 days in filing the appeal may kindly be condoned and ignored.” filing the appeal may kindly be condoned and ignored.” 6. We have carefully considered the contents of the affidavit and We have carefully considered the contents of the affidavit and We have carefully considered the contents of the affidavit and the explanation tendered therein. It the explanation tendered therein. It is trite law that while the is trite law that while the expression expression expression “sufficient “sufficient “sufficient cause” cause” cause” employed employed employed in in in the the the context context context of of of condonation of delay is to be construed liberally so as to advance condonation of delay is to be construed liberally so as to advance condonation of delay is to be construed liberally so as to advance substantial justice, such liberality cannot be extended to condone substantial justice, such liberality cannot be extended to condone substantial justice, such liberality cannot be extended to condone inordinate delays in a routine or me inordinate delays in a routine or mechanical manner, particularly chanical manner, particularly where the explanation lacks credibility or is unsupported by cogent where the explanation lacks credibility or is unsupported by cogent where the explanation lacks credibility or is unsupported by cogent evidence.

6.1 In the present case, the explanation offered by the assessee is In the present case, the explanation offered by the assessee is In the present case, the explanation offered by the assessee is conspicuously bereft of material particulars. No documentary conspicuously bereft of material particulars. No documentary conspicuously bereft of material particulars. No documentary evidence has been p evidence has been placed on record to substantiate the alleged laced on record to substantiate the alleged resignation of the concerned employee, such as resignation letter, resignation of the concerned employee, such as resignation letter, resignation of the concerned employee, such as resignation letter, relieving documents, or internal records. Likewise, no details have relieving documents, or internal records. Likewise, no details have relieving documents, or internal records. Likewise, no details have been furnished regarding the identity of the employee who was been furnished regarding the identity of the employee who was been furnished regarding the identity of the employee who was handling the tax matters, the date of appointment of the successor x matters, the date of appointment of the successor x matters, the date of appointment of the successor employee, or the steps taken by the assessee to ensure continuity in employee, or the steps taken by the assessee to ensure continuity in employee, or the steps taken by the assessee to ensure continuity in compliance. The explanation, therefore, remains in the realm of a compliance. The explanation, therefore, remains in the realm of a compliance. The explanation, therefore, remains in the realm of a bald assertion, unsupported by verifiable evidence. In our bald assertion, unsupported by verifiable evidence. In our bald assertion, unsupported by verifiable evidence. In our considered view, the assessee, being a corporate entity, is expected view, the assessee, being a corporate entity, is expected view, the assessee, being a corporate entity, is expected

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to maintain a minimum standard of institutional diligence in to maintain a minimum standard of institutional diligence in to maintain a minimum standard of institutional diligence in attending to statutory communications and proceedings. The plea of attending to statutory communications and proceedings. The plea of attending to statutory communications and proceedings. The plea of administrative lapse, in the absence of supporting evidence, cannot administrative lapse, in the absence of supporting evidence, cannot administrative lapse, in the absence of supporting evidence, cannot be accepted as constituting “sufficient cause” for condoning a e accepted as constituting “sufficient cause” for condoning a e accepted as constituting “sufficient cause” for condoning a substantial delay of 327 days. Acceptance of such an explanation substantial delay of 327 days. Acceptance of such an explanation substantial delay of 327 days. Acceptance of such an explanation would amount to diluting the discipline of limitation provisions, would amount to diluting the discipline of limitation provisions, would amount to diluting the discipline of limitation provisions, which are founded upon sound principles of finality and certainty in which are founded upon sound principles of finality and certain which are founded upon sound principles of finality and certain legal proceedings.

6.2 In the totality of the circumstances, we are unable to persuade In the totality of the circumstances, we are unable to persuade In the totality of the circumstances, we are unable to persuade ourselves to accept the explanation furnished by the assessee as ourselves to accept the explanation furnished by the assessee as ourselves to accept the explanation furnished by the assessee as constituting constituting constituting sufficient sufficient sufficient cause cause cause within within within the the the meaning meaning meaning of of of law. law. law. Consequently, the delay in filing the ap Consequently, the delay in filing the appeal is not condoned. Once peal is not condoned. Once the delay is not condoned, the appeal itself does not survive for the delay is not condoned, the appeal itself does not survive for the delay is not condoned, the appeal itself does not survive for adjudication on merits and is liable to be dismissed at the threshold adjudication on merits and is liable to be dismissed at the threshold adjudication on merits and is liable to be dismissed at the threshold as not maintainable. as not maintainable.

Order pronounced in the open Court on ounced in the open Court on 05/05/2026. /05/2026.

Sd/- Sd/ Sd/- (ANIKESH BANERJEE) (ANIKESH BANERJEE (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 05/05/2026 Saumya, Sr. P.S.

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Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai