RAGHVENDRA SINGH,HOWRAH vs. INCOME TAX OFFICER, BAMBOO VILLA, CALCUTTA

Ld. CIT(Appeals) dismissed the appeal of the assessee by observing as under:- “On perusal of facts on record as brought out by AO in the assessment order, it is clearly noticeable that appellant is indeed involved in jointly purchase of immovable property for a consideration of Rs.50 lacs which is significantly lower than the value of such property as per SVA as at Rs.1.73 crore as per the provisions of IT Act. In the light of these apparent facts, AO has sought for appellant explanation on the applicability of provision u/s 56(2)(x)(b) of IT Act as applicable to difference in purchase value of property as reasoned in the assessment order. In response to the same, appellant has claimed that such property has many draw backs/deficiencies to fetch the SRO market price such as accessibility of the property from the road, dilapidated condition of building etc., and accordingly appellant claims not to agree with stamp value of property as per SRO/SVA and thereby requested AO, for the valuation of the property by the DVO of Income Tax Department. Accordingly, the valuation of the property purchased by the appellant has been referred by AO to the DVO of the department; however, as the said valuation is pending with the DVO of the department and considering the time barring nature of assessment proceedings, AO computed the purchase price of such property by adopting the FMV determined by the SRO/SVA as applicable as on the date as per the provisions of IT Act in absence of receipt of such valuation report as on the date of assessment. Accordingly, AO has assessed the difference in value of property to tax as applicable other income of the appellant by considering total purchase value of property as at Rs.1.73 crore as per the provisions of IT Act as reasoned in the assessment order. In the light of these apparent facts, on perusal of appellant various GOA/contentions as advanced and on consideration of appellant submissions, it is noticeable that appellant is apparently contending the provisional addition as at Rs.39.49 lacs made by AO as not maintainable and thereby pleaded to consider the same as not attracted by the provisions u/s 56(2)(x)(b) of IT Act. Apparently, appellant is reiterating the same/similar submissions as advanced before AO during assessment proceedings to hold the adoption of SRO value as not maintainable as the property purchased is claimed as having various deficiencies to fetch such price. Further, 4 (A.Y. 2018-2019) Raghvendra Singh appellant is contending that AO ought not to have considered SRO rate for arriving at applicable other income without obtaining DVO report and thereby contended such provisional addition as made by AO as not maintainable. However, on perusal of apparent facts of case, as brought on record by AO, it is noticeable that appellant is merely advancing various contentions to hold the property as involved with various deficiencies to fetch the FMV of SRO and could not substantiate the same with any such supporting authentic verifiable evidences for its verification by AO as per law. However, in spite of that as pleaded by the appellant, AO has referred the property to valuation and such report of DVO is yet to be received by AO as on the date of passing of this time barring assessment. In the light of these fact, in its right earnest, AO has adopted FMV of the property as per the SVA/SRO rate as available for computation of applicable purchase price to arrive at difference value as per the provisions u/s 56(2)(x)(b) of IT Act as reasoned and explained in assessment order. While doing so, AO has indeed mentioned to consider DVO report on such receipt after passing this order for its adoption as per law and in this context, AO referred the addition as involving provisional addition subject to DVO report as applicable other income u/s 56(2)(x)(b) of IT Act. In the light of these facts apparently, there exists no infirmity in the reasoning adopted by AO in computing the purchase price of property as per the SRO rate and thereby the addition made by AO, is apparently reconcilable as involving other income u/s 56(2)(x)(b) of IT Act. Further, the same is to be treated as substantive addition as per these provisions and appellant contentions to treat the same as mere provisional addition neither has a basis nor has any relevance as AO merely referred to it as provisional computation keeping in view the context of awaited DVO report for its further modification if any, as per law. Hence, appellant claims to hold the same as involving provisional addition warranting for disallowance, is neither reasonable nor acceptable as advanced in appellant contentions without appreciating the correctness of SRO rate as on the date of assessment as per the facts on record. Further, appellant contention to treat the purchase price as at Rs.5 lacs as attributable to appellant as against of Rs.16 lacs as adopted by AO for computation of appellant share in the total price, apparently, appellant did not reconcile his share of price as paid as reflected in the sale deed for its consideration with such supporting proofs as per law. In the absence of the same, appellant mere contentions as advanced on this analogy on the computation of AO on the applicable share of appellant, is to be treated as not maintainable. In the light of all these finer facts, as reasoned and discussed supra and as analyzed by 5 (A.Y. 2018-2019) Raghvendra Singh AO in assessment order, apparently, there exists no infirmity in the order of AO in adopting SRO rate, resulting in computation of appellant share of income from other sources as at Rs.39.49 lacs u/s 56(2)(x)(b) of IT Act and thereby, appellant various claims/contentions as advanced is to be treated as not maintainable. Accordingly, appellant all GOA/contentions as advanced to hold the order of AO as bad in law and not maintainable is to be treated as not maintainable as analyzed and reasoned supra as per the facts available on record on merits. In the result, appellant all GOA as advanced to hold the order of AO as not maintainable are neither reasonable nor acceptable and same are dismissed as not maintainable as per law, thereby appellant appeal is to be treated as dismissed as per the facts available on record on merits as discussed supra.

On being aggrieved, the assessee preferred an appeal before the Tribunal. It was the submission of the ld. Counsel for the assessee that the ld. Assessing Officer referred the matter to the DVO to ascertain the fair market value of the property but before ascertaining the fair market value, the ld. Assessing Officer completed the assessment. Therefore, he pleaded to set aside the order passed by the ld. Assessing Officer and also he further pleaded to remit the matter back to the file of ld. Assessing Officer to consider the DVO’s valuation and pass appropriate order.

On the other hand, ld. Departmental Representative did not raise any objection.

I have heard both the sides and perused the material available on record. By considering the totality of the facts and circumstances of the case, I am of the view that it is a fit case to remit the matter back to the file of ld. Assessing Officer to examine 6 (A.Y. 2018-2019) Raghvendra Singh this issue afresh on merits and pass an appropriate order and with a direction to obtain the DVO’s report after providing opportunity of being heard to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/12/2025.