AYSHABI ABDUL MAJID SHAIKH,MUMBAI vs. ITO 26(1)(4), MUMBAI

Briefly the facts are, the assessee is an individual. For the Assessment Year under dispute, he filed his return of income on 30.10.2015 declaring total income at Rs. 11,03,390/-. On verification of material on record during the assessment proceeding, the Assessing Officer noticed that during the year under consideration, the assessee had purchased an immovable property for a total sale consideration of Rs. 47,00,000/- as per the sale-deed. However, the Stamp Duty Authority has valued the property at Rs. 50,12,500/- for Stamp Duty purpose. Therefore, he called upon the assessee to explain as to why the differential amount should not be treated as his income under section 56(2)(vii)(b) (ii) of the Act. Though, the assessee objected to the proposed addition, however, rejecting the submission of the assessee, the Assessing Officer added back the differential amount of Rs. 3,12,500/- to the income of the assessee. Ld. CIT(A) also sustained the aforesaid addition.

I have considered the submissions of ld. Departmental Representative and perused the materials on record.

It is evident, before the Assessing Officer the assessee has filed a submission on 09.11.2017, wherein, he has specifically raised objection against the adoption of the value determined by the Stamp Duty Authority.

The assessee had submitted that the property purchased is more than 30 Mum 2019-Ayshabi Abdul Majid Shaikh years old. Hence, the consideration paid is as per the market rate. It was submitted by the assessee that the value determined by the Stamp Duty Authority is as per the ready reckoner and without taking into note the condition of the property. The aforesaid submission of the assessee has not at all been given due consideration either by the Assessing Officer or by ld. CIT(A). As per 3rd proviso to section 56(2)(vii)(b)(ii) in a case where the stamp duty value of the property is disputed by the assessee, the Assessing Officer has to refer the valuation of such property to the Departmental Valuation Officer (DVO). In the facts of the present case, undisputedly the aforesaid statutory mandate has not been followed. This, in my view is contrary to the provisions of the Act. More so, when the difference between the sale consideration as per sale-deed and the value determined by the Stamp Valuation Authority is comparatively less i.e. only an amount of Rs. 3,12,500/-. In such circumstances, the Assessing Officer should have referred the valuation to the DVO to ascertain the value of the property. The Assessing Officer having failed to do so, I am inclined to restore the issue to the file of Assessing Officer to refer the valuation of the property to the Valuation Officer in terms with the statutory provision and thereafter decide the issue after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes.

In Ground No.2, the assessee has raised the issue of non-grant of deduction under section 80TTA of the Act. As it appears, the aforesaid issue has been ITA No. 988 Mum 2019-Ayshabi Abdul Majid Shaikh raised by the assessee for the first time before the Tribunal. However, since I have restored the issue relating to the valuation of the property to the Assessing Officer, I deem it appropriate to also restore this issue to the Assessing Officer for adjudication after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes.

Ground No.3 being a general ground is dismissed.

In the result, appeal of assessee is allowed for statistical purposes.