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Facts
The assessee sold an immovable property for cash, disclosing a lower sale consideration than the market value for stamp duty purposes. The Assessing Officer treated the difference as income under Section 50C and later Section 43CA of the Act. The assessee claimed the sale receipt as business income, not capital gains, and offered income under Section 44AD. The CIT(A) dismissed the appeal.
Held
The Tribunal condoned the delay in filing the appeal. The assessee's representative requested a remand to the CIT(A) for a further opportunity to present their case due to unavoidable circumstances. The Department opposed this.
Key Issues
Whether the difference between the sale consideration and the stamp duty value should be treated as income, and whether the matter should be remanded for further opportunity to the assessee.
Sections Cited
50C, 43CA, 44AD
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Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 31.07.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2019-20.
We find that this appeal is filed with a delay of 59 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, in the interest of justice, we condone the delay and admit the appeal for adjudication.
At the outset, the Assessing Officer noted that the assessee sold immovable property for an amount of ₹.26,50,000/- by cash, but, however, in the return of income the assessee disclosed the sale consideration at ₹.3,02,155/-, whereas, as per the information with the Assessing Officer, the market value of the property for stamp duty purposes is at ₹.29,70,000/-. Therefore, the Assessing Officer treated difference between valuation of property for stamp duty purpose and actual consideration i.e., at ₹.26,67,845/- as assessee’s income under section 50C of the Act, which was disclosed by the assessee, called for explanation from the assessee through SCN. The assessee explained that he is qualified civil engineer in Real Estate business of buying, selling and construction and obtained LPA Registration [Registration No. 0026/2011] & Tirunelveli Corporation License [License No. 0088/2011/TN1 dated 14.11.2010], therefore, the sale receipt is his business receipt instead of capital gains. As per section 43CA of the Act, the assessee offered 8% of full consideration of ₹.29,70,000/- as income under section 44AD of the Act. However, the Assessing Officer, considering the Pune Bench decision in the case of Sai Bhargavanth Infra v. ACIT [2022] (Pune – Trib), treated the difference between the sale value as per stamp duty valuation and actual sale consideration at ₹.26,50,000/- as assessee’s income under section 43CA of the Act and added to the total income of the assessee. On appeal, since the assessee could not file any explanation in support of his case, the ld. CIT(A) dismissed the appeal and confirmed the addition made by the Assessing Officer.
The ld. AR Shri S. Girish Kumar, Advocate drew our attention to para 4.3 of the assessment order and submits that the assessee furnished explanation in response to the SCN issued by the Assessing Officer. However, due to circumstances beyond his control, the assessee did not file the explanation against the hearing notices issued by the ld. CIT(A) and prayed to remand the matter to the file of the ld. CIT(A) to afford one more opportunity to the assessee to substantiate his case before the ld. CIT(A). The ld. DR Shri Y. Sudarshan, JCIT vehemently opposed the submissions of the ld. AR. Considering the submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to afford one more opportunity to the assessee to substantiate his case and adjudicate the issue on merits in accordance with law. It is open to the assessee to raise any ground before the ld. CIT(A) for adjudication. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 02nd February, 2026 at Chennai.