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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-4, Mumbai [in short CIT(A)], in Appeal No. CIT-4/e-file-122/ITO-16(1)(4)/2016-17 vide dated 09.10.2019. The Assessment was framed by the Income Tax officer, ward 16(1)(4), Mumbai (in short ITO / AO) for the A.Y. 2014-15 vide order dated 29.12.2016 under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
“1. On the facts and in the circumstances of the case and in law the Commissioner of Income Tax (Appeals), Mumbai-4 erred in making addition of Rs.1,09,82,000/- on account of Long Term Capital gains without considering submission made by the appellant.
The Ld. Commissioner of Income Tax (Appeals), Mumbai- 4 seriously erred in law and on the facts and in the circumstances of the case, has failed to value the property from Dept Valuer officer (DVO) The appellant had requested to do the value however CIT ignore the same.
3. The appellant has purchased the Shop 702 situated at Rohan Orion, 16th floor, Bandra west. The said shop was sold by builder to your appellant as well as to other party hence the Shop was sold twice and ownership was under dispute. Our client has filed a Civil suit against the builder. Therefore as of now we had not received the possession.
4. The Appellant prays that the addition of Rs.1,09,82,000/- made in respect of Long term capital gains be deleted.“
We have heard the rival contentions and gone through the facts and circumstances of the case. It is noticed from the very grounds that the grounds raised by assessee is as regards to the addition of
4. Brief facts are that the Assessing Officer during the course of assessment proceedings and going through the agreement for purchase of immovable property i.e. shop No. 702 situated at Rohan Orion, 16th floor, Bandra west, Mumbai, that the assessee has purchased this shop for a consideration of Rs.85 lakhs, whereas the market value of the shop was at Rs.1,94,82,000/-. According to Assessing Officer, this attracts the provision of section 56(2)(vii) of the Act. Accordingly, the Assessing Officer issued show cause notice to the assessee and assessee filed its response stating that to ascertain true market value the matter may refer to District Valuation Officer (DVO). The Assessing Officer then made the reference to DVO for determining the fair market value of the above mentioned shop. But the Assessing Officer did not receive any report from the DVO and hence, the Assessing Officer made addition being differential amount of Rs.1,09,82,000/- under section 56(2)(vii) of the Act to the total income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) who after taking remand report from the Assessing Officer dismissed this ground by stating that the DVO was not allowed to enter the premises and hence, DVO could not value the property and for this assessee is responsible for failure to get the property valued by DVO. Hence, he dismissed the appeal of the assessee by observing in Para 6.1.1. as under:-
“6.1.1 During the course of appellant proceedings, the only argument taken by the appellant was not considering the
3. The contention of the assessee raised before the Ld. CIT(A) is that the assessment order was passed without considering the Valuation Officer’s findings. In his report, the Assessing Officer has stated that though the Valuation officer has sought for physical inspection of the property, the assessee cold not arrange the same for the reason that he has not got physical possession of the property. Therefore the assessee’s plea raised before the Ld. CIT(A) that the Valuation Officer’s findings were not considered in the assessment order, prima facie, is contradictory.
3. In this regard on going through the assessment records of the assessee, it is found that reference to Valuation Officer-II was made on 07.10.2016. It has been informed by the Valuation Officer that the assessee has been requested to provide relevant document and co- ordinate with the office of the Valuation Officer-II for inspection of under mentioned property:- Office premises No.702 on 16th floor in the building known as “Roha Orion” (formerly known as Romana tower) at plt NO. 343 of T.P.S. –III bandra CTS No.F/492 of Bandra, 16th Road, Bandra (West), Mumbai-400 050.”
Considering the facts mentioned above, the chase may be decided on merit please.
As part of natural justice, the same was handed over to the appellant. The appellant did not co-operate with DVO. The DVO wasn’t allowed to enter into the premises and hence no valuation could be made. Even during appellate proceedings, the Ld. AR admitted that they are not in a position to provide physical inspection of the premise even today. Therefore, the appellant is responsible for failure to get the property valued by DVO. In such situation, revenue has no option but to take the value as determined by registration authority. Hence, the ground of appeal is dismissed. ”
Aggrieved, now assessee is in appeal before Tribunal.
Before us, the learned Counsel for the assessee first of all requested for setting aside of the matter to Assessing Officer for making actual reference to DVO and he stated that as per the Provisions of Section 131 of the Income–tax Act, 1961 read with section 133B of the Act, the Assessing Officer has power to issue commission to the DVO for entering into the building and for this, he (i) The Assessing Officer will facilitate the DVO to inspect the building in term of the provisions of Section 131 of the Act.
(ii) The Assessing Officer will adjudicate whether the provisions of section 56(2)(vii) of the Act applies or not.