ASHABEN MAHESHKUMAR MORI,DAHOD vs. ACIT, PANCHMAHAL CIRCLE, GODHRA

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ITA 1850/AHD/2026Status: DisposedITAT Ahmedabad15 October 2026AY 2017-186 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 held that the AO erred in not referring the disputed stamp duty value of the property to the DVO for determining the fair market value, as required by Section 56(2)(vii) of the Act. The Tribunal noted the assessee's submission that in the case of a co-owner, the DVO had determined the fair market value at Rs. 40,00,000/-. Considering the objection to the stamp duty value was not examined through a DVO reference, the Tribunal restored the issue to the file of the Jurisdictional AO for fresh adjudication. The AO was directed to examine the DVO's report in the co-owner's case, verify its authenticity and applicability, and determine the fair market value. The AO was also permitted to refer the matter to the DVO afresh if required. The issue regarding agricultural income was also to be examined afresh after considering the evidences produced by the assessee. The grounds taken by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Ashaben Maheshkumar Mori, filed an appeal against the order of the CIT(A) for Assessment Year 2017-18. The Assessing Officer (AO) made an addition of Rs. 24,75,000/- on account of the difference between the stamp duty value (Rs. 1,20,00,000/-) and the actual consideration paid (Rs. 21,00,000/-) for a property purchased jointly, invoking Section 56(2)(vii) of the Income Tax Act. The AO also added Rs. 7,75,400/- disclosed as agricultural income, treating it as non-agricultural receipt. The assessee's appeal before the CIT(A) was dismissed. The assessee is now in appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 24,75,000/- under Section 56(2)(vii) of the Income Tax Act, 1961, on account of the difference between the stamp duty value and the purchase consideration for a jointly owned property, is justified, considering the AO did not refer the matter to the Departmental Valuation Officer (DVO)? (Mixed law and fact) 2. Whether the agricultural income of Rs. 7,75,400/- was wrongly treated as non-agricultural income and added to the assessee's total income? (Mixed law and fact) Assessee's Contentions: - The AO erred in not referring the disputed stamp duty value to the DVO. In a similar case of a co-owner, Smt. Jyotiben Mori, the DVO determined the fair market value at Rs. 40,00,000/- against the stamp duty value of Rs. 1,20,00,000/-. The addition made by the AO was mechanical. - The assessee is in a position to produce evidence regarding land-holding and agricultural activity for the claimed agricultural income. - The appeal before the CIT(A) was dismissed due to the default of the counsel, who neither attended proceedings nor informed the assessee. Revenue's Contentions: - The Ld. Sr. DR supported the orders of the lower authorities but had no objection if the matter was set aside to the file of the Jurisdictional AO.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii),Section 143(3),Section 250,Section 271(1)(c),Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

For Appellant: Shri B. T. Thakkar, CA
For Respondent: Shri Tapan Kumar Chattergee, Sr. DR
Hearing: 08.10.2026Pronounced: 15.10.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal has been filed by the Assessee against the order of Commissioner of Income Tax (Appeals) – 4, Surat [hereinafter referred to as “CIT(A)”] dated 01.04.2026 for the Assessment Years (A.Y.) 2017-18.

2.

The brief facts of the case are that the assessee had filed his return of income for A.Y. 2017-18 on 17.03.2018 declaring total income of Rs.4,47,520/-. The assessee is partner in Shree Ranchodrai Petroleum. The case of the assessee was selected for scrutiny under CASS for the reason of survey action conducted during the Financial Year 2016-17. In the course of survey, certain documents were found regarding purchase

ITA No. 1850/Ahd/2026 Ashaben Maheskumar Mori Vs ACIT, AY- 2017-18 2 of property by the assessee jointly with other co-owners for a consideration of Rs. 21,00,000/-. It was found that the stamp duty value of the said property was Rs.1,20,00,000/-. The AO had, therefore, required the assessee to explain as to why the proportionate difference in the stamp duty value and the actual consideration paid being Rs. 24,75,000/- should not be considered as income of the assessee under the provision of section 56(2)(vii) of the Act. Not convinced with the explanation of the assessee, the AO had made addition of Rs. 24,75,000/- on account of difference in the stamp duty value and the purchase consideration. Further, agricultural income of Rs.7,75,400/- disclosed by the assessee, in the absence of any agricultural activity, was treated as non-agricultural receipt and added to income. The assessment was completed u/s. 143(3) of the Act on 30.12.2019 at total income of Rs.36,97,920/-.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.

4.

Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal:

1.

The grounds of appeal mentioned hereunder are without prejudice to each other. 2. The appeal order passed under section 250 of the Income Tax Act, 1961 by Additional/Joint Commissioner of Income Tax, (Appeal), Surat is bad in law and deserves to be quashed.

ITA No. 1850/Ahd/2026 Ashaben Maheskumar Mori Vs ACIT, AY- 2017-18 3

3.

In Facts and in circumstances of the case Additional/Joint Commissioner of Income Tax, (Appeal), Surat has grossly erred while treating my agricultural receipt of Rs.7,75,400/- treated as non agricultural income. The said treating agricultural receipt income as in come from non- agricultural sources is bad in law and deserves to be quashed 4. In Facts and in circumstances of the case Additional/Joint Commissioner of Income Tax, (Appeal), Surat has grossly erred while disallowing claim of Expenses incurred towards agricultural activities of Rs 2,98,200/-. The said dis-allowance of expenses of Rs 2,98,200 is bad in law and deserves to be quashed. 5. In Facts and in circumstances of the case Additional/Joint Commissioner of Income Tax, (Appeal), Surat has grossly erred while making an addition of Rs. 24,75,000/- as unexplained investment The said addition of difference between Stamp Value and Purchase value is bad in law and deserves to be quashed. 6. Additional/Joint Commissioner of Income Tax, (Appeal), Surat has grossly erred while making an addition u/s 56(2)(vii) of the Act, ignoring specific deficiencies of property as submitted while filing return of income and during scrutiny and ignoring Valuation done by D.VO (Departmental Valuation Officer) The said ignorance of D.V.O's report of valuation is bad in law and deserves to be quashed 7. The Additional/Joint Commissioner of Income Tax, (Appeal), Surat grossly erred while relying on statement recorded which is recorded by Income Tax officer who has been litigated. The litigation is proved against Income Tax officer who had recorded statement. The said reliance of CIT Appeal while assessing is bad in law and deserves to be quashed. 8. Treating the difference between purchase price and Jantri Value as investments made through unaccounted sources is bad in law. 9. Lr.A.O. in the assessment order has initiated penalty under section 271AAC(1)). In fact and in circumstances of the case Lr. A.O. has erred in initiating penalty proceedings u/sec 271(1)(c) of the Income Tax Act, 1961. Since the Assessment Order is bad in Law consequently initiation of penal proceedings deserves to be quashed. 10. Looking to the opportunity for representing the defense your appellant preferred an appeal. The appellant creaves, leave to add alter amend or withdraw any one or more grounds of appeal.

ITA No. 1850/Ahd/2026 Ashaben Maheskumar Mori Vs ACIT, AY- 2017-18 4 6. Shri B. T. Thakkar the Ld. AR of the assessee submitted that no compliance could be made before the Ld. CIT(A) and, therefore, he had dismissed the appeal of the assessee without adjudicating the grounds taken by the assessee, on merits. He explained that the default before the Ld. CIT(A) was due to the concerned counsel who neither attended the proceedings nor informed the assessee. The Ld. AR explained that the assessee had made due compliance before the AO and had disputed the stamp duty value of the property. He submitted that in spite of objection of the assessee, the AO did not refer the matter to the DVO and had made the addition in a mechanical manner. The Ld. AR submitted that in the case of joint owner of the property Smt. Jyotiben Mori, the matter was referred to the DVO and the fair market value of the property was determined at Rs.40,00,000/- only as against stamp duty value of Rs.1,20,00,000/-. Considering this fact, the addition made by the AO was not correct. The Ld. AR, therefore, requested that the matter may be set aside to the file of the AO with a direction to consider the DVO report in the case of the co-owner and thereafter, re-adjudicate the matter. On the issue of agricultural income also, the Ld. AR submitted that assessee is in a position to produce evidences regarding land-holding and the agricultural activity carried thereon.

7.

Per contra, Shri Tapan Kumar Chatterjee, the Ld. Sr. DR supported the order of the lower authorities. He, however, had no objection if the matter was set aside to the file of Jurisdictional AO.

8.

We have considered the rival submissions and perused the material available on record. On examination of the assessee's reply reproduced in the assessment order, we find that the assessee had disputed the

ITA No. 1850/Ahd/2026 Ashaben Maheskumar Mori Vs ACIT, AY- 2017-18 5 stamp duty value of the property as adopted. However, the AO did not refer the matter to the DVO for determining the fair market value of the property. As per provision of section 56(2)(vii) of the Act, if the stamp duty value of the property is disputed by the assessee, then the AO is required to refer the matter to the Valuation Officer to find out the fair market value of the property. In the case of the assessee, no such reference to the DVO was made by the AO. The contention of the assessee is that the matter was referred to the DVO in the case of the co-owner Smt. Jyotiben Mori and the DVO had determined the fair market value of the property at Rs. 40,00,000/- only, as against the stamp duty value of Rs. 1,20,00,000/- adopted by the AO. Considering the submissions of the assessee and having regard to the fact that the assessee's objection to the stamp duty value was not examined through a reference to the DVO, we consider it appropriate to restore the issue to the file of the Jurisdictional AO for fresh adjudication. The AO is directed to examine the valuation report of the DVO in the case of the co-owner, verify its authenticity and applicability to the property in question, and determine the fair market value in accordance with the applicable provisions of law. The AO will be free to refer the matter to DVO afresh, if so required. The AO shall afford the assessee a reasonable opportunity of being heard before passing an appropriate order. Accordingly, the issue is restored to the file of the Jurisdictional AO for fresh adjudication. The issue regarding agricultural income of the assessee should also be examined afresh after considering the evidences brought on record by the assessee in this respect. The grounds taken by the assessee are allowed for statistical purpose.

ITA No. 1850/Ahd/2026 Ashaben Maheskumar Mori Vs ACIT, AY- 2017-18 6

9.

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

Order pronounced in the Court on 15/10/2026 at Ahmedabad.

Sd/- Sd/- (SANJAY KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 15th October, 2026 (True Copy) Neelesh, Sr. PS आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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