SUMITRABEN JAIN,MUMBAI vs. ITO 21 (3)(4), MUMBAI

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ITA 7279/MUM/2018Status: DisposedITAT Mumbai04 March 2020AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the AO erred in confirming the addition under section 56(2)(vii)(b) without referring the matter to the Departmental Valuation Officer. The matter was set aside to the AO for fresh adjudication.

What were the facts?

The assessee purchased a residential flat for Rs. 1.15 crores, while its stamp duty value was Rs. 1.40 crores. The Assessing Officer (AO) made an addition of Rs. 25.00 lacs.

What were the issues?

Whether the AO was justified in making an addition under section 56(2)(vii)(b) without referring the property's valuation to the Departmental Valuation Officer.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH

Before: SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM Smt. Sumitraben Jain,

For Respondent: Shri Satish Chandra Rajore (DR)
Hearing: 26/02/2020Pronounced: 04/03/2020

Assessee by Mohd. Hashim (AR) Revenue by Shri Satish Chandra Rajore (DR) Date of Hearing 26/02/2020 Date of Pronouncement 04/03/2020 आदेश / O R D E R PER: R.C. SHARMA, A.M. This is the appeal filed by the assessee against the order of the ld. CIT(A)-48, Mumbai dated 31/10/2018 for the A.Y. 2014-15 in the matter of order passed U/s 143(3) of the Income Tax Act, 1961 (in short, the Act). The assessee has raised following grounds of appeal:

“1. On the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (Appeals)-48 [hereinafter referred to as Ld. CIT(A)] erred in confirming action of Ld. AO of making addition u/s Smt. Sumitraben Jain Vs ITO 56(2)(vii)(b) of the Act without referring the matter to Departmental Valuation Officer.

2. That the order of Ld. CIT(A) is bad in law and on facts.

3. The appellant craves leave to add or amend the foregoing grounds of appeal.”

2.

Rival contentions have been heard and record perused. Facts in brief are that during the year under consideration, the assessee had purchased a residential flat for Rs. 1.15 cores having stamp duty value of Rs. 1.40 crore. In the scrutiny assessment, the A.O. added a sum of Rs. 25.00 lacs (Rs. 1.40 crore being value adopted by the Jt.

Registrar for the purpose of payment of stamp duty less Rs. 1.15 crore being purchase consideration) U/s 56(2)(vii)(b) of the Act. By the impugned order, the ld. CIT(A) had confirmed the action of the A.O., against which the assessee is in further appeal before the ITAT.

3.

We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that before the A.O., the assessee has made a request for referring the matter to the DVO, however, without referring the same, the A.O. directly applied provisions of Section 56(2)(vii)(b) of the Act and added the difference in the sale consideration as mentioned in the sale deed as compared to the sale consideration adopted by the Sub-Registrar for the purpose of registration.

Smt. Sumitraben Jain Vs ITO Therefore, in the substantial interest of justice, we restore the matter back to the file of the A.O. for making a reference to the DVO so as to find out valuation of the assets so purchased as compared to the value determined by the Sub-Registrar. We direct accordingly.

4.

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

Order pronounced in the open court on 04th March, 2020.

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