KAMINI ANIL LAKHANI ,MUMBAI vs. ITO, 23(2)(1), MUMBAI
Income Tax Appellate Tribunal, Mumbai “H(SMC
Before: Shri Pawan Singh (JM) & Shri Omkareshwar Chidara (AM) Kamini Anil Lakhani 6th Floor, Arjuna Towers Behind Rang Mahal Building Bandra West, Mumbai 400 050. Vs. ITO 23(2)(1) Mumbai & NFAC, Delhi PAN : ABLPL7198J
Per Omkareshwar Chidara (AM) :-
In this case, the Ld. AO made two additions, the first being by invoking section 50C and the other being disallowance of certain expenses being personal in nature.
2. From the order of Ld. AO, it is noticed that the appellant is utilising two PANs simultaneously i.e., certain incomes are admitted in one PAN and some other incomes/investments are reflected by using another PAN for several years. This impugned year is A.Y. 2010-11, whereas upto 2020, the appellant had been using two PANs simultaneously which is impermissible.
The appellant is supposed to use only one PAN and transactions should be tagged to that particular PAN only. In this year, a notice under section 148 of the Act was issued by Revenue to the appellant with the PAN of ABHLP409P where investment in a property was done. The appellant in a letter dated
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31.3.2012 has stated before Ld. AO that the Return of Income filed with PAN of ABLPL7198J may be treated as Return of Income filed in reply to the notice under section 148 of the Act. So, in this year, the Ld. AO clubbed all the incomes and investments in this PAN of ABHPL4890P while completing the assessment.
The Ld. AO, in this assessment, made two additions as mentioned earlier. By invoking section 50C, an amount of Rs. 5,98,750/- was added being the 50% of difference (appellant’s share) of value between the SRO value and value at which the property was registered.
Aggrieved by the orders of the Ld. AO/Ld. CIT(A), the appellant challenged the reopening of assessment as well as addition under section 50C of the Act. As far as the reopening of case under section 148 of the Act is concerned, it was argued that the return of income was filed on 31.3.2012 much prior to the notice under section 148 of the Act dated 30.3.2017. This ground of appeal does not hold much water because the appellant was using two PANs simultaneously and the same was admitted by the appellant himself. The notice under section 148 of the Act was issued to a PAN where sale of immovable properties was tagged and for this PAN, the appellant has not filed Return of Income even though taxable capital gain is visible prima facie. Hence, the Revenue is well within its power of issuance of notice under section 148 of the Act and hence valid. 5. The next ground relates to addition of Rs. 5,98,750/- under section 50C of the Act being the difference between the registration value of Kamini Anil Lakhani
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Government and the value mentioned in the sale document. During the hearing proceedings before the ITAT, the Ld. AR of the appellant filed written submissions in which it was stated that the primary condition before invoking section 50C of the Act is that the property should be referred the Government valuer (DVO) and opportunity should be given to appellant to explain their position before the valuer. Then only, it was submitted that the addition under section 50C of the Act can be made. The Ld. AR in her written submissions fairly admitted that the matter may be remitted to Ld.
AO with a direction that the valuation be conducted by DVO and assessment be made denovo.
The Ld. DR relied on the orders of the Ld. AO and Ld. CIT(A).
Heard both sides. Now, it is a settled that before making an addition under section 50C of the Act, the property should be referred to valuation cell of DVO and the objections of appellant should be considered. Then only, addition under section 50C of the Act can be made. In view of the same, the issue is remitted to the file of Ld. CIT(A) who would be giving a direction to Ld. AO to get the valuation of property through DVO and sent his remand report to Ld. CIT(A). since, the assessment is very old, to avoid further delay, the matter is remitted to the file of Ld. CIT(A) who is a senior officer. The Ld. CIT(A) is directed to get the report of Ld. DVO through Ld. AO, and complete the appeal proceedings at the earliest. 8. The second ground of appeal is the disallowance of expenses to the extent of Rs. 2,06,000/- claimed by appellant as charity. The Ld. AO/Ld.
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CIT(A) disallowed these expenses being there is no connection between the appellant’s business and charity expenses. Before the ITAT also, the appellant could not establish the nexus between the charity expenses and earning business income and hence it is held that the charity expenses are correctly disallowed by Ld. AO. This ground of appeal is dismissed.
9. The appeal, thus is partly allowed for statistical purposes.
Order pronounced in the open Court on 22/05/2025. (PAWAN SING)
ACCOUNTANT MEMBER
Mumbai; Dated: 22/05/2025
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
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