RATAN BHAGIRATH KANJI,MUMBAI vs. NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI

From the orders passed by the authorities below, it appears that the Assessee during the assessment year under consideration had purchased an immovable property for a consideration of Rs.21,00,000/- as against the market value as per stamp duty value to the tune of Rs.31,86,832/-. Consequently, the Assessee was show caused; in response to which replied that the said property was registered on dated 15.02.2018 as per the copy of the sale agreement as produced. The Assessee also provided the valuation report of the property derived at by an independent Registered Valuer in order to substantiate his claim and further requested the Assessing Officer (in short ‘the AO’) to refer the case to the valuation officer as per section 55A of the Act. Consequently, the AO on dated 18.03.2021 & 23.03.2021 referred the matter to the concerned technical unit for valuation of the property as per the provisions of the Act, however, till the date of passing the assessment order on dated 19.04.2021, no such report has been received and therefore the AO treated the amount of Rs.10,86,832/- {being difference between Rs.31,86,832/- the stamp duty valuation – Rs.21,00,000/- consideration amount Shri Ratan Bhagirath Kanji shown by the Assessee} as undisclosed income of the Assessee u/s 56(2)(x) of the Act and added the same in the income of the Assessee as undisclosed income.

The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, however of no avail, as the Ld. Commissioner affirmed the aforesaid addition with a liberty to the Assessee to approach the AO for taking necessary action to expedite the matter of the valuation and give effect to the valuation accordingly. The Assessee being aggrieved is in appeal before this Court.

Heard the Ld. D.R. and perused the material available on record. Admittedly, the AO, due to time constraints and without waiting further for the valuation report by the valuation officer, treated the amount of Rs.10,86,832/- being difference between the stamp duty valuation and consideration paid/shown by the Assessee. As the valuation of the property as per provisions of section 55A of the Act, is relevant for proper adjudication of the issue, hence for the just and proper decision of the case and substantial justice, the orders passed by the authorities below are set aside and the case is remanded to the file of the AO for determination afresh, while taking into consideration the valuation report as determined or to be determined by the valuation officer.

In the result, the appeal filed by the Assessee is allowed for statistical purposes.