VASANT RAMCHANDRAJI AMBADE,NAGPUR vs. ITO WARD 5(3) NAGPUR, NAGPUR

Ld. Counsel for the assessee at the outset made reference to the written submissions placed on paper book at page 1 to 50 along with the documents farming part of the paper book running into 125 pages and the prayer made to delete the impugned additions.

On the other hand, ld. DR vehemently argued and supporting the order of ld. CIT(A).

I have heard rival contentions and the perused the records placed before me. I observe that the assessee is an individual and did not file return of income for the A.Y 2015-16 as has been claimed that the total income for the A.Y 2015-16 is below the taxable limit. Based on the information about investment in immovable property by the assessee of Rs. 7,31,250/- located at Tahsil Hingna, Mouza Wanadongari, Nagpur and the market value as per stamp valuation authority is Rs. 9,06,500/-. Reassessment proceedings were carried after validly serving the statutory notices. The assessee ,was confronted for the source of investment of Rs. 7,31,250/- as well as proposed addition u/s 56(2)(vii)(b) of the Act of Rs. 1,75,250/- on which assessee failed to satisfy the ld. AO resulting into the addition of Rs. 9,06,500/- to the returned income of Rs. 22,650/- declared in the ITR filed on 15.04.2021. Aassessee challenged the addition before ld. CIT(A) but failed to succeed.

I will first take up the issue for alleged unexplained investment of Rs. 7,32,250/- I observed that immovable property has been purchased in the name of the assessee but the funds of both assessee and his wife have been utilized which have been generated by them from their salary income for last many years as well as savings. The alleged sum of Rs. 7,31,250/- has been paid through banking channel and their mode, source of investment with copy of bank passbook has been furnished in the paper book. The chart depicting the details of the payments made through banking channel are reproduced below:

Above details are further supported by evidence placed in the paper book but Ld. DR failed to controvert submissions of ld. Counsel for the assessee therefore I find that the source of investment is majorly from salary of both the assessee and his wife and also loan taken from medical society. I am therefore satisfied with the source of investment made for investment in immovable property at Rs. 7,31,250/- and accordingly set aside the finding of ld. CIT(A) and delete the addition of Rs. 7,31,250/- made by the A.O.

Next issue for my consideration is the addition u/s 56(2)(vii)(b) of the Act at Rs. 1,75,250/-. It is claimed by the assessee that the area in which the immovable property has been purchased is encroached by antisocial elements for last 14 years and therefore the price of property in that locality is less than the market price and the stamp duty valuation. He also contended that other registrations in the very same vicinity have been executed for the similar rates as that of the assessee. Prayer has been made either to delete the impugned addition of Rs. 1,75,250/- made u/s 56(2)(vii)(b) or in the alternative refer the matter to the DVO for determining the correct valuation of the alleged immovable property in given background of poor location. I note that the stamp duty is around 20% higher to that of the purchase consideration. There is a tolerance limit of 10% accepted by various judicial forums. Coupled with the same and observing that the matter is almost 10 years old and referring matter back to DVO will entail another few more years and further considering that both the assessee and his wife are passing retired life and that the husband was working in Maharashtra State Electricity Company as Class – III cadre and retired from service on 30.03.2012 and that the wife working as the staff nurse in Govt. Medical college has been retired in 2022. I therefore deem it appropriate and without setting it as a precedence hold that under given facts and circumstances, locational disadvantage and sale transaction in very same locality are at par with that of assessee, I hold that no addition is called for u/s 56(2)(vii)(b) of the Act and accordingly delete the addition of Rs. 1,75,250/-. Accordingly ground Nos. 1, 2 & 3 raised by the assessee are allowed and other grounds being general and consequential in nature needs no adjudication. Accordingly finding of ld. CIT(A) is reversed and the grounds raised by the assessee are allowed.

In the result, the appeal filed by the assessee is allowed as per terms indicated herein above.

""थ" / The Respondent.

The Pr. CIT concerned. 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब"च, DR, ITAT, “SMC” Bench,. 5. गाड" फ़ाइल / Guard File. आदेशानुसार / BY ORDER,