Loading judgment…
Facts
The assessee's appeal was filed with a delay of 34 days, which was condoned. The addition was made on account of the difference between the guideline value and the sale consideration of a property purchased jointly by four individuals.
Held
The Tribunal held that the addition of the entire difference in the property value in the hands of one assessee was not justified as all four parties contributed equally to the sale consideration. The addition was sustained only to the extent of the assessee's share (1/4th).
Key Issues
Whether the entire difference between the guideline value and sale consideration of a jointly purchased property can be added in the hands of one assessee.
Sections Cited
147, 144B
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 23.10.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2019-20.
We find that this appeal is filed with a delay of 34 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 5 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made on account of entire difference between guideline value and sale consideration of the property.
4. We note that the assessee derives income out of milk vending activity. The Assessing Officer completed assessment under section 147 r.w.s. 144B of the Income Tax Act, 1961 [“Act” in short] determining total income of the assessee at ₹.10,28,990/- as against the returned income of ₹.3,23,740/-. The said difference between reassessed income and returned income represents the entire difference in the value of the property of guideline value and sale deed value. We note that as pointed out by the ld. AR that the property was purchased by the assessee and three others for a registered value of ₹.8,25,000/- for which stamp valuation authority fixed the value at ₹.15,30,250/-. The said difference of ₹.7,05,250/- [15,30,250 – 8,25,000] was added in the hands of the assessee is not justified. We note that the Assessing Officer himself recorded the same in the assessment order that the said property was purchased in the name of 4 persons namely, Sukkaran Kalaiselvi (assessee), P. Sukaran (assessee’s husband), S. Thanigairajan (assessee’s son) and R. Sadayan (3rd party). The vehement contention of the ld. AR is that the Assessing Officer is not justified in assessing the entire difference in the hands of the assessee without stating plausible reason. We note that, all four persons have joined as parties in the sale deed clearly shows each of them is holding ¼ share in the property, which clearly establishes that they have contributed the sale consideration equally. The Assessing Officer did not bring on record any material evidence to demonstrate that the entire sale consideration was contributed solely by the assessee and no amount has come from other three parties. Further, it is the duty of the Assessing Officer, on finding the difference between the registered value and guideline of the property should have referred to the Valuation Cell of the IT Department and we find no such observations in the assessment order or in the impugned order. We note that the ld. AR placed on record copy of the sale deed in Tamil vernacular language and true translation as enclosures. On examination of the true translation, the fact remains admitted that the sale consideration of ₹.8,25,000/- was transferred to the vendor through RTGS transaction, which is acknowledged by the vendor in page 4 of the English true translation. The contention of the ld. AR is that there is no admission in the sale deed that the contribution was made by the 4 I.T.A. No.358/Chny/25 assessee solely towards sale consideration is correct, as all parties contributed to the sale consideration. Admittedly, the said statement showing the sale consideration was contributed equally and reflecting in the sale deed. Therefore, we can safely conclude that all four parties are equal share holders in the said property. If that is so, we find force in the arguments of the ld. AR that the addition made by the Assessing Officer cannot be made in the hands of one of the share holders, but, except to an extent of ¼ share of addition. Therefore, the addition made by the Assessing Officer, which was confirmed by the ld. CIT(A) is not justified and accordingly, we delete the addition to an extent of ₹.5,28,937/- [3/4 of addition] and sustain the addition of ₹.1,76,313/- being one fourth of the addition made by the Assessing Officer. Thus, the grounds raised by the assessee are partly allowed.