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Facts
The Assessing Officer (AO) made an addition of Rs. 31,70,500/- under Section 56(2)(vii)(b)(ii) of the Income Tax Act, treating it as income from other sources. The assessee appealed to the CIT(A), submitting additional evidence, but the CIT(A) dismissed the appeal for failure to file corroborative documents and invoke exceptions under Rule 46A.
Held
The Tribunal observed that the appellant was not given an opportunity to produce additional documents. Therefore, the Tribunal decided to provide an opportunity to the appellant to produce relevant documents before the CIT(A).
Key Issues
Whether the CIT(A) erred in dismissing the appeal without considering additional evidence and giving the appellant an opportunity to present their case. Whether an opportunity should be granted to the assessee to produce additional evidence before the lower authority.
Sections Cited
56(2)(vii)(b)(ii), 143(3), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
1. The Ld. Assessing Officer has erred in assessing the income of the appellant at Rs. 37,50,470/- instead of Rs.5,79,970/- returned. As such Aggregate additions of Rs.31,70,500/- may please be deleted
2. The Ld. CIT (A) has erred in law and on facts in not considering the additional evidence without observing the principles of natural justice.
3. The Ld. CIT (A) has erred on facts in not considering the existence of agency relationship in the oral partnership.
4. The aforesaid grounds of appeal are without prejudice to each other.
5. The Appellant craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of Appeal
The Ld. AO made an addition of Rs. 31,70,500/- under section 56(2)(vii)(b)(ii) of the I.T. Act by stating as follows while completing the assessment under section 143(3) of the Act :-
2 Prasad Jaykar Shetty “Therefore by virtue of provision of section 56(2)(vii)(b)(ii) of the I.T.Act,1961, the amount of Rs. 31,70,500/- is liable to be treated as income of the assessee. The provision of section 56(2)(vii)(b)(ii) of the I.T.Act,1961 says that, "Where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1 day of October 2009 any immovable property, for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration shall be chargeable to Income Tax under the head Income from other sources."
Aggrieved by the addition, the appellant filed an appeal before Ld. CIT(A), and certain additional evidences were filed for the first time, like copy of Development agreement with Shri Developers dated 18.11.2015 and agreement of transfer of flats to legal heirs and requested the Ld. CIT(A) to consider the total actual consideration paid Rs. 86,92,000/-. The Ld. CIT(A) at page 16, paragraph 7.5 and 7.6 held that the corroborative documents to these additional evidences were not filed before him and hence the appeal of the appellant was dismissed, as the appellant failed to invoke any exception provided under sub-Rule(1) of Rule 46A of I.T. Rules.
The appellant escalated the appeal to ITAT and filed an appeal by taking Grounds of Appeal as mentioned in page No. 1 of this order.
During the appellate proceedings before the Bench, it was argued by Ld. AR of the appellant that he was never asked to produce any additional documents and without giving any opportunity to appellant, the appeal was dismissed.
The Ld. DR relied on the orders of Ld. AO and Ld. CIT(A).
Heard both sides. After perusing the orders of lower authorities, it is decided to give an opportunity to the appellant to produce relevant documents before Ld. CIT(A). The Ld. CIT(A) is directed to take all relevant documents and pass an appeal order on merits. The appeal is remitted to the file of Ld. CIT(A) with the above direction.
3 Prasad Jaykar Shetty 8. The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 24/02/2025.