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Income Tax Appellate Tribunal, KOLKATA ‘B(SMC
Before: Shri P.M. Jagtap, Vice-(KZ)
This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-19, Kolkata dated 04.04.2018 and the solitary issue involved therein relates to the addition of Rs.16,88,338/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) under section 56(2)(b)(ii).
At the outset, it is noted that there is a delay of 319 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, the assessee has filed an affidavit seeking condonation of the said delay on the following grounds:- “9. That for the last 4/5 years, I have been suffering from Diabetes, Hypertension and renal malfunctioning and are undergoing heavy medical treatment. So is the case with my
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wife Ila Rani Kayal, who is suffering from gynae problem and undergoing medical treatment. 10. That the expenditure involved in this undergoing such costly medical treatment has added lot of mental anxiety and made unable to attend to my normal duties and/or attend to Tax matters. 11. That I have been advised to prefer an Appeal against the said CIT(A)-19's Order to the Income Tax Appellate Tribunal, Kolkata. I have been further advised that the prescribed Appeal filing fee of Rs.10,000/- is to be paid. 12. That I have tried my level best to collect sufficient amount to enable to pay the said fees. I have deposited the same fees on 12.03.2019. 13. That for the above reasons, due to my severe ill-health as well as insufficiency of fund, I could not seek proper legal assistance which would enable me to submit my Appeal to the Income Tax Appellate Tribunal against the said order”.
Keeping in view the reasons given by the assessee as above, I am satisfied that there was a sufficient cause for the delay of 319 days on the part of the assessee in filing this appeal before the Tribunal. Even the ld. D.R. has not raised any material objection in this regard. I, therefore, condone the said delay and proceed to dispose of this appeal of the assessee on merit.
The assessee in the present case is an individual, who is employed with Calcutta State Transport Corporation. The return of income for the year under consideration was filed by him on 01.07.2014 declaring total income of Rs.3,68,960/-. As noticed by the Assessing Officer during the course of assessment proceedings, the assessee had purchased an immovable property jointly with his wife on 07.01.2014 for a consideration of Rs.24,00,000/-. Since the market value of the said property was determined by the Stamp Valuation Authority at Rs.40,88,338/-, the Assessing Officer invoked the provisions of section 56(2)(b)(ii) and added the difference of Rs.16,88,338/- to the total income of the assessee as the assessee failed to offer any satisfactory explanation in respect of the said difference.
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The addition of Rs.16,88,338/- made by the Assessing Officer was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and since the submission made by the assessee in support of his case was not found acceptable by him, the ld. CIT(Appeals) confirmed the said addition made by the Assessing Officer for the following reason given in paragraph no. 5 of his impugned order:- “5. Ground No. 2 is in respect of invocation of sec. 56(2)(6)(ii) by the AO and thereby making an addition of Rs. 16,88,338/-. The appellant has argued that if the AO had any doubt about the valuation, he should have referred to the D.V.O. I am not in agreement with the views of the AR. During the assessment proceedings, the appellant had made no such request and no such supporting documents were produced before me. Also, no evidence was produced before me that the issue of valuation was contested by the appellant before the stamp duty authorities. Certain case law of the jurisdictional High Court has been cited (214 Taxmann 305 Cal). I have examined this case law. It pertains to sec. 50C which falls under the head Capital Gains and carries special deeming provision. The instant case pertains to addition vi] s 56 which falls under the head Income from other sources. Accordingly, a blind import of adjudication pertaining to one section will not be applicable to another section. Moreover, I am also of view that while sec. sac makes a provision for reference to the DVO, no such provision exist for reference to DVO under sec. 56 of the Act. Hence, ground no. 2 of the appeal is dismissed”.
Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
I have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the impugned addition was made by the Assessing Officer by adopting the value of relevant assets as made by the Stamp Valuation Authority without making a reference to the Valuation officer and the said addition made by the Assessing Officer was confirmed by the ld. CIT(Appeals) on the ground that in the absence of any objection raised by the assessee to the valuation determined by the Stamp Valuation Authority, the Assessing
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Officer was not required to make any reference to the Valuation Officer. In the case of Sudhir Kumar Agarwal –vs.- CIT [372 ITR 83] cited by the ld. Counsel for the assessee, Hon’ble Calcutta High Court has held that the Assessing Officer is duty bound to make a reference to the Valuation Officer before adopting the value of assets determined by the Stamp Valuation Authority for the purpose of computing capital gain without there being any objection raised by the assessee. Although the said decision was rendered by the Hon’ble Jurisdictional High Court in the context of section 50C of the Income Tax Act, 1961, I am of the view that the ratio laid down therein is equally applicable even in the context of section 56(2)(b)(ii), which also involves addition to the total income of the assessee by adopting the value of asset determined by the Stamp Valuation Authority. I, therefore, set aside the impugned order passed by the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after making a reference to the D.V.O.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on September 09, 2019.
Sd/- (P.M. Jagtap) Vice-President (KZ) Kolkata, the 9th day of September, 2019 Copies to : (1) Shri Tapan Kayal, C-25/18/12, Anand Nagar, Dakshin Behala Road, Kolkata-700 061 (2) Income Tax Officer, Ward-63(3), Kolkata, Bamboo Villa, 9th Floor, 169, A.J.C. Bose Road, Kolkata-700 014 (3) Commissioner of Income Tax (Appeals)-19, Kolkata, (4) Commissioner of Income Tax, Kolkata- , Kolkata; (5) The Departmental Representative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.