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Facts
The assessee purchased immovable properties at a consideration significantly lower than the stamp valuation, leading the Assessing Officer to reopen the assessment under Section 147. Additions were made for unexplained investment under Section 69 (Rs. 2,25,000) and difference in property consideration under Section 56(2)(vii)(b) (Rs. 15,47,500). The CIT(A) dismissed the assessee's appeal ex-parte.
Held
The Tribunal found that both the CIT(A) and the Assessing Officer ignored the Valuation Officer's report and decided the case on surmises. The matter is remanded back to the Assessing Officer to consider the DVO report, adjudicate the issues on merit as per the Income Tax Act, and provide the assessee an opportunity of hearing.
Key Issues
Whether the additions under Section 69 and Section 56(2)(vii)(b) were justified when the Valuation Officer's report was ignored, and whether the CIT(A) was correct in dismissing the appeal ex-parte without providing an opportunity of hearing.
Sections Cited
147, 148, 142(1), 129, 69, 56(2)(vii)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 10-03- 2025 passed by CIT(A)/ADDL/JCIT(A), Kochi for assessment year 2015-16.
The grounds of appeal
are as under:- “1. Erred in dismissing appeal as an ex-parte.
2. Erred-in-law in confirming addition of 2,25,000/- as unexplained investment U/s 69 of the Act.
3. Erred-in-law in confirming addition of 15,47,500/- U/s 56(2)(vii) (b) of the Act.
4. Erred-in-law in confirming addition made U/s 56(2)(vii)(b) of the Act without referring the matter to the Valuation officer.
5. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
Total tax effect 7,58,070/-”
The assessee filed original return of income for assessment year 2015-16 declaring income at Rs. 2,04,800/- on 31-03-2017 after claiming deduction under Chapter VIA of the Act. The Assessing Officer observed that the assessee along with three persons has purchased immovable properties to Rs. 4,50,000/- being 1/3 share. As per the stamp valuation authority, the jantry value determined at Rs. 27,14,487/-, Rs. 43,69,680/- respectively. The assessee purchased immoveable consideration below jantry value determined as per Stamp Valuation Authority by amount exceeding Rs. 50,000/- which is in contravention to section 56(2)(vii)(b) of the Act. Assessment was reopened u/s. 147 of the Act and notice u/s. 148 was issued on 28-03-2019. Notice u/s. 142(1) r.w.s. 129 was issued on 19-11-2019 and 29- 11-2019. In response to the same, the assessee filed return of income on 6-12-2019 declaring total income at Rs. 2,04,800/-. The statutory notices were issued and the Assessing Officer made addition of Rs. 2,25,000/- on account of unexplained investment u/s. 69 of the Act. The Assessing Officer also made addition of Rs. 15,47,000/- u/s. 56(2)(vii)(b)(ii) of the Income Tax Act, 1961.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that there is a delay of 44 days for which the assessee has filed the affidavit for donation of delay which appears to be genuine reason for delay, hence the delay is condoned.
Munirabai Mohammadi Kalolwala, A.Y. 2015-16 6. The ld. A.R. further submitted that the CIT(A) has not given any hearing to the assessee and passed ex-parte order. The ld. A.R. further submitted that the CIT(A) erred in confirming the addition of Rs. 2,25,000/- as unexplained investment u/s. 69 of the Act as the DVO has already given the report which was totally ignored by both the authorities.
The ld. D.R. relied upon the assessment order and order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has categorically mentioned para 5 of the assessment order that CIT(A) called for DVO report. Without taking cognizance of DVO’s report both CIT(A) and A.O. has decided the case simply on surmises basis which is not justified. Therefore, we are remanding back this matter to the file of A.O. and direct the A.O. to take into account the DVO’s report before adjudicating the issues on merit and decide the same as per Income Tax Act. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.
In the result, the appeal of the assessee is partly allowed for statistical purpose.