MIJARUL MOLLAH,KOLKATA vs. ITO, WARD-44(2), KOLKATA

Brief facts of the case of the assessee are that the assessee has filed return of income for the AY 2020-21 declaring total income at Rs. 45,73,930/-. The return of income was processed. The case of the assessee was selected for scrutiny for the reason that there is an investment in immovable property. Accordingly, notice u/s 143(2) of the Act was issued. In response to the notice the assessee submitted the part details of purchase of immovable property but did not submit the details/information of source of investment of fund were once again requested to submit the details and the assessee submitted the details of transaction for purchase of property along with copies of bank statement. On verification the AO noticed that the loan confirmation is submitted of those persons who have not filed their return of income and having no PANs. The AO as per the information available on the record that the assessee had purchased immovable property on 10.01.2020, the Sub-Registrar has determined the stamp duty valuation of the same at Rs. 1,27,71,000/-. Accordingly, the stamp duty valuation of the property, the purchased value of the property determined to Rs. 1,27,71,000/-. Accordingly, as per the provision of Section 56(2)(x)(b) of the Act difference of Rs. 95,71,000/- i.e. actual sale consideration of Rs. 32,00,000/- and stamp duty valuation of Rs. 1,27,71,000/- treated as income of the assessee and added to the total income of the assessee. The assessee has further added Rs. 39,00,000/- u/s 115BBE of the Act as the assessee has submitted confirmation letter from whom he obtained loan of Rs. 39,00,000/- but did not submit copies of ITR and copies of bank statement of accounts of the persons from whom the assessee has claimed to have been obtained loan.

Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed not on merit rather due to non-prosecution.

The Ld. Counsel for the assessee challenges the impugned order thereby submitting that the assessee filed his submission dated 01.09.2022 before the AO has made a request to refer his case for valuation of immovable property. The Ld. Counsel for the assessee further submits that in response to the notice the assessee has submitted copies of bank statement along with confirmation letter of persons from whom the assessee has claimed that he has obtained loan from them. The Ld. Counsel further submits that all the transaction made through account payee cheque and bank draft. The Ld. Counsel submits that there is a valuation report of DVO dated 16.11.2022 and the assessee has been given an opportunity to place the same before the AO for coming to the right conclusion as the order was passed in absence of valuation report, though the assessee made request for the same. The ld. Counsel of the assessee filed paper book before us.

Contrary to that, the Ld. D.R supports the impugned order.

Upon hearing the rival submission of the ld. Counsels of both the parties, we have perused assessment order as well as order of Ld. CIT(A). The case of the assessee is that he purchased a plot for Rs. 32,00,000/- and for registration purpose of the property, the sub-registrar has determined the stamp duty valuation of Rs. 1,27,71,000/- . The assessment order was passed, keeping in view, the stamp duty valuation determined by the Sub-Registrar and the purchase made by the assessee. There was no valuation report though the assessee made request to refer his case for valuation of immovable property. Before us the valuation report by the DVO has been filed. Further we find that there is an addition of Rs. 32,00,000/- i.e. purchase value of the land as the assessee failed to substantiate the amount received by the assessee by way of loan. The ld. Counsel for the assessee has filed loan confirmation certification and bank transaction before us. Keeping in view the above facts, we are inclined to restore the case of the assessee before the AO with this direction to pass an order after going over the valuation report and documents filed by the assessee. Accordingly, the order passed Assessment Year: 2020-21 Mijarul Mollah by the AO confirmed by the Ld. CIT(A) is hereby set aside and the appeal of the assessee is restored to the file of AO for fresh adjudication.