VELJI PARSOTAMBHAI GOHEL,RAJKOT vs. THE INCOME TAX OFFICER, WARD-1(2)(1), RAJKOT

The Grounds of appeal raised by the assessee are as under:

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the action of the assessing officer. The ld.CIT, noticed, on a careful consideration of the record that the assessing officer had adequate material (manifest discrepancy between agreement value disclosed and stamp/registration value) to form a reason to believe and to reopen assessment under Section 147 of the Act. The reopening is therefore valid in law. The assessing officer's invocation of Section 50C for treating the stamp/registration value as market value cannot be characterized as unsustainable on the present record. The assessee has not produced contemporaneous and cogent documentary evidence relating specifically to the terrace/sky-rights sold in 2018 which would conclusively establish that the asset was stock-in-trade and that the agreement value was the genuine market consideration accounted for. While the assessee did produce earlier P&L/trading accounts showing land dealings, those documents do not by themselves establish that the specific transaction in 2018 was part of regular trading and recorded contemporaneously with supporting bank proofs. The Valuer's report produced by the assessee is dated 15.03.2023 and therefore post-dates the assessing officer order dated 16.02.2023, therefore the document's persuasive value to displace the stamp/registration valuation is limited absent a satisfactory explanation for the lateness and absent contemporaneous corroboration. For the reasons recorded above and after considering the submissions and documents on record, the appeal filed by the assessee was dismissed by the Ld.CIT(A)

Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal.

Learned Counsel for the assessee submitted that the entire details, documents and evidences were produced before the assessing officer to prove the claim and the assessee does not have any further documents and evidences, which can be submitted before the lower authorities, therefore, considering the smallness of the amount, an ad- hoc estimated addition @10% may be made in the hands of the assessee.

On the other hand, Ld. DR for the Revenue submitted that the matter may be restored back to the file of the assessing officer for fresh examination of facts. However, if the Bench wants to make an ad- hoc estimated addition, then it should be @ 20% of the total addition made by the assessing officer.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. I note that assessee has not produced contemporaneous and cogent documentary evidence which would conclusively establish that the asset was stock-in-trade and that the agreement value was the genuine market consideration accounted for. While the assessee did produce earlier Profit &Loss /trading accounts showing land dealings, however, those documents do not by themselves establish that the specific transaction in 2018 was part of regular trading and recorded contemporaneously with supporting bank proofs. I note that the assessee has submitted all the possible documents and evidences before the assessing officer to prove his claim and now, the assessee does not have any further documents and evidences to be submitted before the lower authorities, therefore, matter should not be restored back to the file of the lower authorities. However, I note that by way of alternative arguments, learned DR for the revenue as well as learned Counsel for the assessee, both have agreed that to meet the end of justice, an estimated addition may be made in the hands of the assessee, considering the smallness of the amount.The Ld. Counsel for the assessee urged the Bench that adjudication may be done for making estimated addition @ 10% on the impugned disallowance made by the assessing officer, however, the Ld. DR for the Revenue submitted that if the Bench wants to make ad hoc estimated addition, then in order to plug the leakage of the Revenue, ad hoc estimated addition should be 20% on the disputed amount/ addition made by the assessing officer. I have considered the arguments of both the parties and considering the facts of the assessee’s case and to meet the end of the justice, I am of the view that an ad hoc estimated addition @ 12% should be made in the hands of the assessee on the amount of Rs.9,82,248/-, which comes to Rs.1,17,870/-. Therefore, I direct the assessing officer to make the addition in the hands of the assessee to the tune of Rs. 1,17,870/-, by following the normal rate of income tax.

I make it clear that this decision is rendered on the peculiar facts of this case and having regard to the smallness of the amounts involved, and, therefore, it cannot be construed as laying down propositions of law of general applications. Besides, this adjudication should not be treated as a precedent in the preceding year or any subsequent year in assessee’s own case and in other cases.

In the result, the appeal of the assessee is partly allowed in above terms.