ALPESH VINUBHAI DESAI,SURAT vs. INCOME TAX OFFICER WARD 3(2)(1) SURAT, SURAT

The assessee has raised the following grounds of appeal: “1. Learned CIT(A) has erred in law and fact by not allowing the condonation of delay and rejecting the appeal. 2. Learned Assessing Officer has erred in law and fact by making addition of Rs.18,24,000 u/s 56(2)(vii) (b) for land at Ratnagiri, Maharashtra.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal.

The Ld. Authoritised Representative (in short “the Ld. AR”) submitted that during the assessment proceedings there was addition made for Rs.18,24,000/- on account of difference between actual purchase consideration and stamp duty value u/s 56(2)(vii)(b) of the Act for purchase of agricultural land at Ratnagiri, Maharashtra. The said addition was made without referring the valuation to the Departmental Valuation Officer (DVO) though the stamp duty value was deposited by the assessee. The Ld. AR submitted that the assessee filed the appeal before the CIT(A) thereby praying the condonation of delay of 32 days. The delay was condoned and the matter was heard on merit, the matter was referred to the DVO and the valuation order was received. The DVO has valued the said amount at Rs.14,08,000/- being the very amount of the actual purchase consideration. The assessee further received another hearing notice from ADDL/JCIT(A)-7, Delhi as the case was transferred to the National Faceless Appeal Centre. The Ld. ADDL/JCIT(A)-7, Delhi did not condone the delay and dismissed the appeal on technical grounds without adjudicating any grounds on merits and without adverting to the valuation order of the DVO which was already on record. The assessee has given the explanation of the delay of 32 days before the CIT(A) but the CIT(A) has not taken into account the genuine reason of the assessee. The Ld. AR submitted that a reference to the DVO is a power exercising the under the proviso to section 56(2)(vv) r.w.s. 50C(2) of the Act and could have been exercised in an appeal duly admitted and being heard on merits. Thus, suddenly transferring the matter to the NFAC and dismissing the appeal on the ground of delay only appears to be not as per the Income Tax Act. The Ld. AR relied upon the various decisions for condoning the delay but the primary argument of the Ld. AR was that since the valuation order provided by the DVO at Rs.14,08,000/- for the said land being an exact amount equal to the actual purchase consideration the same should be considered and the addition of Rs.18,24,000/- which represents 50% of assessee’s shares of the difference of Rs.36,48,000/- should be considered and delete the addition accordingly.

The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the CIT(A). From the perusal of the DVO’s report the fair market value of the said property as declared by the assessee for land at Gat No.742 Mouje Nakhre tal Ratnagiri, Ratnagiri as on 23.04.2013 = Rs.14,08,000/- and the sale is accepted by the DVO thereby stating that the same was correctly declared in the return made by the assessee. Once the DVO vide order u/s 16-A(3) of the Wealth Tax Act, 1957dated 17.02.2020 has given the report as per the reference of the CIT(A) the same cannot be ignored by the CIT(A) at any cost. The contention of the Revenue that the assessee paid more stamp duty and the stamp valuation was determined at Rs.50,56,000/- on the land value of Rs.1,38,00,000/- appears to be for the Stamp Act as per the registration of the particular region but the said stamp authority has accepted the assessee’s sale deed at Rs.14,08,000/-. The DVO’s report also states the amount mentioned by the assessee in the sale deed and once the CIT(A) has referred the matter to the DVO the said price mentioned by the DVO should have taken into account by the CIT(A). Thus, the AO is directed to take the cognizance of the DVO’s report and accordingly grant the relief to the assessee.

In result appeal of the assessee is partly allowed.