ARVINDKUMAR JAGJIVANDAS THAKKAR,AHMEDABAD vs. THE ITO, WARD-3(2)(1), AHMEDABAD

The contention of the Ld. Counsel for the assessee before us was that Ld. CIT(A) had confirmed the addition completely ignoring assessee’s contention that identical addition made in the hands of the third co-owner i.e. Shri Dilip Manibhai Prajapati was deleted by the ITAT. He drew our attention to the submissions made by the assessee in this regard contained at page 3 of his order as under:

The copy of the order of the ITAT in the case of Shri Dilip Manibhai Prajapati in dated 28.06.2024 was also placed before us. Ld. Counsel for the assessee stated that the issue was squarely covered by the decision of the ITAT in the case of other co-owner.

The Ld. DR was unable to controvert the contention of the Ld. Counsel for the assessee that the Ld. CIT(A) had ignored the categorical submission of the assessee before it that the issue was covered in his favour by the decision of the ITAT in the case of 3rd co-owner of the land nor was the Ld. DR able to point out any distinction on law or on facts in the decision of the ITAT in the case of the 3rd co-owner i.e. Shri Dilip Manibhai Prajapati (Supra) with that in the present case.

Having heard the contention of both the parties and gone through the order of the Ld. CIT(A) in the case of Shri Dilip Manibhai Prajapati (supra), we have no hesitation at all in deleting the addition made in the hands of the assessee of Rs.11,61,850/- u/s.56(2)(x)(b) of the Act. As rightly pointed out by the Ld. Counsel for the assessee, the Ld. CIT(A) has upheld the addition ignoring the plea of the assessee that the addition was not sustainable since the ITAT had deleted identical addition made in the hands of the 3rd co-owner of the impugned land itself. We have gone through the order of the ITAT in the case of Shri Dilip Manibhai Prajapati (supra) and we have noted that the ITAT had deleted the addition noting that the difference between fair market value and the purchase consideration is approximately 10% of the purchase consideration of the property which is not a material difference. The relevant finding of ITAT are at para nos. 20 to 21 of its order as under:

Further in the light of the fact that the DVO has found the FMV of the land to be far less than its stamp duty value being Rs.2.23 Crs as opposed to its stamp duty value of Rs.3.32 crs, there is no case with the Revenue for considering the stamp duty value of the land for computing the addition to be made to the income of the assessee in terms of section 56(2)(x) of the Act. At the most, the FMV could be taken for the purpose of determining the excess between the FMV and the purchase consideration, but since the difference is only to the tune of Rs.20 lakhs, which is approximately 10% of the purchase consideration of the property of Rs.2 .01 Crs, it is not a material difference. Therefore, there is no occasion for making any addition in the hands of the assessee for receiving immovable property for consideration which is less than its stamp duty value/FMV for the above reasons. We direct the AO to delete the addition made in the hands of the assessee under section 56(2)(x) of the Act amounting to Rs.62,52,900/-.”

Since, the Ld. DR was unable to distinguish the case of the assessee with that of the other co-owner already adjudicated by the ITAT, we agree with Ld. Counsel for the assessee that the issue is clearly covered in favour of the assessee by the decision of the ITAT in the case of 3rd co-owner Shri Dilip Manibhai Prajapati (supra). And following the same, we hold that the addition made in the hands of the assessee of Rs.11,61,850/- u/s.56(2)(x) of the Act is not sustainable and direct deletion of the same.

In the result, appeal filed by the assessee is allowed.