INCOME TAX OFFCIER, KALYAN vs. VINOD KISHAN NENWANI, ULHASNAGAR

When this appeal was called for hearing, neither anyone appeared on behalf of the assessee, nor any application seeking adjournment was filed.

In this appeal, the Revenue has raised the following grounds: - “

During the hearing, the learned DR submitted that the learned CIT(A) allowed the appeal filed by the assessee by adjudicating the contention which was never a part of the assessment order nor was any opportunity granted to the Revenue by calling for a remand report.

We have considered the submissions of the learned DR and perused the material available on record. The brief facts of the case are that the assessee is an individual and for the year under consideration filed his return of income on 27.07.2018, declaring a total income of Rs.7,44,150/-. The return filed by the assessee was selected for limited scrutiny under CASS on the basis that the value of the property purchased by the assessee is less than the value as per the stamp authority. Accordingly, statutory notices under section 143(2) and section 142(1) were issued and served on the assessee. As per the information submitted by the Sub-Registrar Office, the assessee purchased property for a total consideration of Rs.9 lakh, however, the value as per the stamp duty authority of the said property was Rs.2,76,58,000/-. Accordingly, the assessee was asked to show cause as to why the difference between the sale consideration paid and the value as per the stamp duty authority should not be brought to tax as per the provisions of section 56(2)(x) of the Act. After considering the submissions of the assessee, the Assessing Officer (“AO”) vide impugned order dated 23.02.2021 passed under section 143(3) r.w. section 143(3A) and section 143(3B) of the Act disagreed with the submissions of the assessee and considered the difference between the sale consideration paid and the value as per the stamp duty authority amounting to Rs.2,67,58,000/- as income of the assessee under the head “income from other sources” under section 56(2)(x) of the Act.

We find that the learned CIT(A) vide impugned order allowed the appeal filed by the assessee on the basis that the property under consideration is an agricultural land, and therefore, is not a capital asset. Therefore, the learned CIT(A) held that the provisions of section 56(2)(x) of the Act are not applicable to the present case. Accordingly, the learned CIT(A) directed the AO to delete the addition of Rs.2,67,58,000/- made under section 56(2)(x) of the Act.

From the perusal of the impugned order, we find that the basis on which the learned CIT(A) granted relief to the assessee was neither pleaded by the assessee nor the same was under consideration during the assessment proceedings. It is evident from the record that during the assessment proceedings, the entire deliberation was on computing the income of the assessee as per the provisions of section 56(2)(x) of the Act. We further find that the learned CIT(A) did not seek any remand report from the AO on its finding regarding treating the land as agricultural land, and therefore, not a capital asset. Accordingly, we deem it appropriate to restore this issue to the file of the Jurisdictional AO for de novo consideration, as per law, after granting adequate and reasonable opportunity of hearing to the assessee. Accordingly, with the above direction, the impugned order is set aside and the grounds raised by the Revenue are allowed for statistical purposes.

In the result, the appeal by the Revenue is allowed for statistical purposes. Order pronounced in the open Court on /06/2025