ACIT, CIRCLE - 23(1), HOOGHLY vs. GOPAL CHANDRA GHOSH, HOOGHLY

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ITA 789/KOL/2019Status: DisposedITAT Kolkata12 April 2021AY 2015-164 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no infirmity in the CIT(A)'s decision to accept the valuation estimated by the Departmental Valuation Officer (DVO). The order of the CIT(A) was upheld.

What were the facts?

The Assessing Officer added a difference between the purchase value and stamp duty value of an immovable property under Section 56(2)(vii)(b). The assessee disputed the valuation, and the CIT(A) directed the AO to consider the DVO's valuation.

What were the issues?

Whether the CIT(A) erred in adopting the DVO's valuation as the purchase consideration instead of the stamp duty value, and whether additional evidence was produced as per rules.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA

Before: Shri J. Sudhakar Reddy & Shri A.T. Varkey

Per Shri J. Sudhakar Reddy, Accountant Member:- This appeal preferred by the Revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-6, Kolkata dated 10.01.2019 for the assessment year 2015-16 on the following grounds:- (1) That the ld. CIT(A)-6, Kolkata erred on facts and law in giving relief by adopting the value made by DVO as purchase consideration instead of stamp duty.

1.

Assessment Year: 2015-2016 Gopal Chandra Ghosh (2) That the ld. CIT(A)-6, Kolkata erred on facts and in law for non-production of additional evidence before the AO as per Income Tax Rule 46A of 1962.

2.

None appeared on behalf of the assessee when the case was called for hearing. There is no petition for adjournment on the part of the assessee. Therefore, we have decided to dispose of the appeal of the Revenue after hearing the ld. D.R. and the material available on record.

3.

We have heard the ld. Departmental Representative. The Assessing Officer in this case has made an addition under section 56(2)(vii) of the Act amounting to Rs.3,60,85,814/- by observing at page no. 4 of first para in his assessment order dated 29.12.2017, which reads as under:- “In this case there is a difference of Rs.3,60,85,814/- between the purchase value and stamp duty value. Hence provisions of Sec 56(2)(vii)(b) gets attracted in this case as the immovable property has been received after 1st October 2009 for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees. In this case the stamp duty value of such property as exceeds such purchase consideration is to be charged to income tax under the head Income from Other Sources. However as per the 1st Proviso to sub clause (b), if the date of agreement and date of registration are not the same then the stamp duty value on the date of agreement may be taken for calculation. The 2nd Proviso restricts application of 1st proviso to situations only if payment has been made before date of agreement by any other mode than cash. The stamp duty available is as on date of registration of the properties. The assessee has also disputed the market value as adopted by the Stamp valuation authority during hearing on 27.11.2017 because of wrong classification of land by the Stamp Duty Authority. As the assessee has disputed the valuation, a reference was made to the District Valuation Officer on 28.12.2017 for determining the fair market valuation of the said properties on date of agreement. In absence of any reply from the valuation authority, the market value as determined by the Stamp Valuation Authority on date of registration has been taken for calculation. The difference of Rs.3,60,85,814/- is being added as income chargeable to tax under the Assessment Year: 2015-2016 Gopal Chandra Ghosh

head Income from Other Sources as per provisions of Sec 56(2)(vii)(b) of the Act. (emphasis only)

Income from Other Sources added u/s 56(2)(vii) of amount Rs.3,60,85,814/-“.

4. As the assessee disagreed with the valuation made by the DVO and endorsed by the Assessing Officer, he filed an appeal before the ld. CIT(Appeals), who vide his order dated 10.01.2019 in para 4.1 observed as under:- “4.1. During the appellate proceedings, the A/R of the appellant has produced copy of report of the DVO dt. 06.12.2018, a copy of which has also been endorsed to ACIT, Circle-23(1), Hooghly wherein the value on accumulated basis has been estimated by the DVO at Rs.2,56,68,178/- against the value of Rs.4,25,45,814/- as estimated by the Stamp Valuation Officer. Lin view of the report of the DVO, the AO is directed to modify his order and take into consideration the valuation done by the DVO while giving appeal effect. Accordingly, Grounds No. 1 to 4 of the appeal are partly allowed”.

5.

The above fact demonstrated that the ld. CIT(Appeals) has applied the valuation figure estimated by the Departmental Valuation Officer in his report dated 06.12.2018 and directed the Assessing Officer to modify his order. We find no infirmity in such acceptance by the ld. CIT(A) of the valuation estimated of the Departmental Valuation Officer (DVO). Under these circumstances, we find no infirmity in the order of the ld. CIT(Appeals) and uphold the same.

4.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on April 12, 2021.

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