Loading judgment…
Facts
The assessee's appeal before the CIT(A) was dismissed ex-parte. The CIT(A) upheld additions made by the AO under sections 56(2)(x)(b) and 69 of the Income Tax Act, 1961. The assessee contended that the valuation report of the DVO was not considered and that the difference in agreement value and stamp duty value was within the permissible tolerance limit.
Held
The Tribunal observed that the CIT(A)'s order was passed ex-parte and that crucial aspects, such as the DVO's valuation report, may not have been properly considered. In the interest of natural justice, the matter was restored to the CIT(A) for fresh consideration.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without considering the DVO's valuation report and whether the additions made under sections 56(2)(x)(b) and 69 were warranted.
Sections Cited
250, 143(3), 144B, 56(2)(x)(b), 69, 50C, 55A, 139(1), 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Mr. Shridhar Gangaram vs ITO Ward 22(3)(6), Mumbai Anumandala B/1, Gandhi Nagar, D.C. Road, Worli, Mumbai-400018 PAN: AAAPA7977L APPELLANT RESPONDENT Assessee by : None Respondent by : Shri S. Anbuselvan (Sr. DR) Date of hearing : 10/03/2026 Date of pronouncement : 13/03/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee was preferred against the order of the NFAC, Delhi [for brevity the ‘Ld. CIT(A)’], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2020-21, date of order 08.10.2025. The impugned order emanated from the order of the Assessment Unit Income-Tax Department (for brevity the ‘Ld. AO’) order passed under section 143(3) r.w.s. 144B of the Act date of order 21.09.2022.
Mr. Shridhar Gangaram Anumandala 2. When the appeal was call for hearing none was present on behalf of the assessee to represent this case. There is no application for seeking adjournment either. Considering the nature of the dispute, we proceed to dispose of appeal ex parte qua for assessee after hearing the Ld. DR and on the basis of material available on record. 3. The assessee has taken the following grounds:-
Ground of appeal “1. The Ld. CIT (A), NFAC, Delhi erred in passing order u/s.250 of LT. Act, 1961 by dismissing the appeal submitted before him against the order u/s 143 (3) of the I.T. Act, 1961 as Exparte without considering the request of adjournment and without considering part submission/s made during the hearing by the applicant.
2. The Ld. CIT (A), NFAC, Delhi dismissed the appeal which was submitted against the Order of Ld. A.O. which was passed by not issuing show cause before passing this assessment order u/s 143(3) of the I. T. Act, 1961 presence enhancing the returned income of Rs.5,96,440/- to Rs.2,42,38,510/- (i.e. additions of Rs.2,36,42,067/-) and raised heavy tax demands/inflation of demands. So your goodselves is requested to set aside the said assessment order passed by the Ld. I.T.O.
3. The Ld. CIT (A), NFAC, Delhi did not consider the DVO Valuation Report dt.27.9.2024 which was submitted during the hearing wherein Valuation is Rs.2,73,51,000/- against the agreement Value of Rs.2,48,71,000/- (i.e. within the Torrance limit of 10% diff. u/s.50 C of 1.T.Act, 1961). The Id. A.O. erred in making addition u/s.56(2)(x)(b) of L.T. Act, 1961 Rs. 1,18,80,887/- being difference between Agreement Value Rs.2,48,71,000/- and Market Value adopted by Registering authority for stamp duty Rs.3,67,51,887/- without considering the facts before him as well as ignoring the reference made u/s.55A of the I.T. Act, 1961 on 5.4.2022 by him and FMV is not yet received. In view of the same the Ld. CIT (A), (NFAC could have consider the report and delete the addition instead of passing exparte order and dismissing the appeal.
4. The Ld. CIT (A), (NFAC could have consider the submission made with the appeal papers Bank Loan statement for purchase of flat as the Id. A.O. erred in making addition on account of unexplained investment u/s.69 of 1.T.Act, 1961 Rs.1,17,61,180/- being difference out of total payment made to purchase the residential flat vide Agreement for sale i.e. Sale-Deed dt.
Mr. Shridhar Gangaram Anumandala 30.11.2019 for Rs.2,48,71,000/- + Stampduty Rs.22,05,180/- & Registration Fees Rs.30,000/- Rs.2,71,06,180/- considering only a sum of Rs. 1,53,45,000/-(Sale of old House property for Rs. 1,55,00,000/- Less TDS Rs.1,55,000/-) being the money lying with the assesse and the balance is undisclosed / unexplained investment which is fully unjustified. The appellant appealed before the CIT (A), (NFAC that the Id. A.O. further erred in not giving / granting a chance to your appellant to prove the genuineness / furnish the details so the said addition is bad in law and requires to be deleted but the said appeal is dismissed.
5. The Ld. CIT (A), (NFAC did not considered the submissions before him and dismissed the appeal wherein the appellant appealed that the Ld. A.O. erred in levy of Int. u/s.234A Rs. 11,03,688/- and u/s.234B Rs.41,38,830/-of the I.T. Act, 1961 as the same is immature at as both the additions are without considering the facts before him viz; TDS / CPC as well as Sale-Deed which are not verified and considered though lying before the Ld. A.O. Such levy is fully wrong and be deleted but the said appeal is dismissed which is bad in law.
Your Appellant reserves his right to add, alter, amend and/or delete any ground/s before or during the course of appeal that may be necessary and/or advised.”
The assessee filed the return of income under section 139(1) of the Act, declaring income under the head “Profits and Gains of Business or Profession.” The assessment was completed by the Ld. AO under section 143(3) of the Act. During the course of assessment proceedings, the Ld. AO made an addition of Rs. 1,18,80,887/- under section 56(2)(x)(b) of the Act and a further addition of Rs. 1,17,61,180/- on account of unexplained investment under section 69 of the Act, aggregating to a total addition of Rs. 2,36,42,067/-. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) issued notices under section 250 of the Act and granted several opportunities of hearing on different dates. However, the assessee sought adjournment on three occasions and did not respond to the last two notices issued by the Ld. CIT(A). Consequently, the Ld. CIT(A) passed an ex parte order and upheld the additions made by the Ld. AO. On perusal of the grounds raised in the present appeal, we Mr. Shridhar Gangaram Anumandala find that the assessee has specifically contended that the Ld. CIT(A) passed the order without considering the valuation report of the Departmental Valuation Officer (DVO) dated 27.09.2024. The assessee has further contended that the difference between the stamp duty value and the agreement value falls within the tolerance limit of 10% as provided under section 56 of the Act, and therefore the addition of Rs. 1,18,80,887/- under section 56(2)(x) of the Act, representing the difference between the agreement value and the value adopted by the registration authority, was not warranted. It is the grievance of the assessee that this crucial aspect was not considered by either the Ld. AO or the Ld. CIT(A) while passing their respective orders.
The Learned Departmental Representative (Ld. DR) supported the orders passed by the revenue authorities.
6. We have heard the rival submissions and perused the material available on record. It is observed that the assessment was completed by making total additions of Rs. 2,36,42,067/- under sections 56(2)(x)(b) and 69 of the Act. The assessee has contended that the valuation report of the DVO was not considered by the Ld. CIT(A) and that the orders of the revenue authorities were passed without proper consideration of the said report. However, the assessee has not placed any documentary evidence on record before the Bench in support of this contention. It is also noted that the appellate order of the Ld. CIT(A) was passed ex parte. Considering the facts and circumstances of the case, and in the interest of natural justice, we are of the view that the assessee deserves to be granted one more opportunity of being heard. Accordingly, the matter is restored to the Mr. Shridhar Gangaram Anumandala file of the Ld. CIT(A) with a direction to consider the plea of the assessee and pass a speaking and reasoned order in accordance with law. Needless to say, the assessee shall be afforded a reasonable opportunity of hearing in the set-aside appellate proceedings. At the same time, the assessee is also directed to remain diligent and extend full cooperation for the expeditious disposal of the appeal.