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Facts
The assessee filed an ITR for AY 2017-18. The AO issued notices under Section 143(2) and 142(1), subsequently making an addition of Rs. 1,32,30,016/- under Section 144 read with Section 56(2)(vii)(b) for the difference between the stamp duty value and the actual purchase consideration of a plot of land. The assessee's appeal to the Ld.CIT(A) was dismissed due to non-submission of documentary evidence.
Held
The ITAT condoned the delay in filing the appeal, finding reasonable cause for the assessee's non-compliance. The tribunal allowed the assessee to place the purchase agreement on record and remanded the matter back to the Assessing Officer for fresh examination, verification, and a report from the DVO, ensuring the assessee is provided a reasonable opportunity.
Key Issues
Whether the addition made under Section 56(2)(vii)(b) for the difference between stamp duty value and purchase consideration was justified, and if the assessee should be granted a further opportunity to present evidence regarding the transaction and explain the lower consideration.
Sections Cited
143(2), 142(1), 56(2)(vii)(b), 144
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: JUSTICE (RETD.) SHRI C.V. BHADANG & SHRI VIKRAM SINGH YADAV
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 24-12-2024, pertaining to Assessment Year (AY) 2017-18.
At the outset, it is noted that there is a delay in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the facts placed on record, we find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication.
Briefly the facts of the case are that the assessee filed his original return of income on 31-03-2018, declaring total income of Rs. 30,20,960/-. Thereafter, notices were issued u/s. 143(2) and 142(1) of the Income Tax Act, 1961 („the Act‟), calling for necessary information/documentation. Further, the AO issued a show cause dt. 06-12-2019 followed by subsequent show cause dt. 14-12-2019, asking the assessee to show cause as to why the difference between stamp duty value amounting to Rs.1,52,30,016/- and the actual purchase consideration of Rs.20 lakhs should not be brought to tax in terms of provisions of section 56(2)(vii)(b) of the Act and the assessee was provided time to file his response/explanation by 16-12-2019. Thereafter, in absence of any submissions filed by the assessee, the difference between stamp duty value and the stated purchase consideration amounting to Rs.1,32,30,016/- was brought to tax in the hands of the assessee vide order dt.16-12-2019 passed u/s.144 of the Act.
The assessee thereafter carried the matter in appeal before the Ld.CIT(A), and as a part of his statement of facts, it was submitted by the assessee that he was unaware of the notices been issued electronically and as no physical notice was served upon him, he was ignorant upon the assessment proceedings and it was only on 14-12- 2019 when he got a call from the IT Department informing him after the ongoing assessment proceedings that he came to know about the proceedings and given that he was at his native place in Rajasthan, he rushed back to Mumbai and met CA and reached Income tax office on 17-12-2019. However, by the time, the assessment order had already been passed on 16-12-2019. It was accordingly submitted before the Ld.CIT(A) that the matter may be remitted back to the file of the AO and an opportunity may be granted to present his case and file necessary submissions/documentation.
During the appellate proceedings before the Ld.CIT(A), notices were issued and on few occasions, the assessee sought adjournment, however, in absence of any documentary evidence filed by the assessee, the request for remand to the AO was not acceded to by the Ld.CIT(A) and he confirmed the addition so made by the AO. Against the said order, the assessee is in appeal before us.
During the course of hearing before us, the Ld.AR submitted that the assessee is facing various medical issues since 2017 and due to his medical condition and the fact that he has re-located to his native place and on account of lack of communication with his CA, his tax matters could not be handled in an effective manner. It was submitted that the assessee has since appointed another Counsel and who has advised him about the complexity of the matter and in light of that, the assessee wishes to place on record a copy of the purchase agreement relating to transaction under consideration and which clearly demonstrate that the assessee has purchased a plot of land in Village Malwani, which is in “no development zone” which has resulted in substantially low purchase consideration as against the stamp duty value determined considered by the stamp duty authorities. It was submitted that the said agreement is germane to the issue under consideration and on perusal thereof, the AO would appreciate the background on account of which the assessee has purchased the said plot of land at a lower consideration. It was accordingly submitted that the assessee be allowed to place on record the said purchase agreement and the matter may be remanded back to the file of the AO to allow one more opportunity to the assessee. It was also submitted by the ld AR that the assessee will duly attend to the proceedings and file any further information/documentation as so sought by the AO and shall not seek any un-necessary adjournments in the matter and will ensure in timely completion of the assessment proceedings. It was accordingly submitted that in the interest of substantial justice, the assessee be allowed to place on record purchase agreement and matter may be remanded back to the file of the AO.
Per contra, the Ld.DR is heard, who has submitted that the assessee has been provided sufficient opportunity by the AO as well as by the Ld.CIT(A) and at the same time, given that no findings have been recorded on merits of the case, didn‟t specifically objected where the purchase agreement is brought on record and the matter may be remanded back to the file of the AO for necessary verification and examination.
We have heard the rival contentions and perused the material available on record. We find that the assessee has explained the reasons for non-compliance to the notices before the AO and Ld.CIT(A) and has come forward with the requisite purchase agreement by virtue of which the impugned transaction was undertaken at a stated value lower than the stamp duty as so computed by the stamp duty authorities. The assessee has also put forth the necessary explanation for the lower stated consideration which needs to be verified and examined. The same demonstrate the seriousness on the part of the assessee to prosecute the present matter and therefore, considering the fact that the subject agreement and the contents thereof are germane to the matter under consideration, we allow the assessee‟s prayer for admittance of the said agreement on record and the matter is remanded to the file of the AO for examination of the same, calling for the report from the DVO and to decide the matter afresh as per law after providing reasonable opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.