MR. JAMIL AKHTAR,KOLKATA vs. ACIT(IT), CIRCLE - 1(2), KOLKATA , KOLKATA

order

: November 30, 2018 ORDER

Per P.M. Jagtap, Vice President

therein read as under: “1. For that on the facts and circumstances of the case, the Ld. CIT(A) – 22, Kolkata has erred in facts and in law in restricting the addition to Rs. 11,49,086/- u/s 56(2)(vii)(b)(ii) of the Income Tax Act being the difference between the fair market value determined by the DVO (District Valuation Officer) and Deed Value of property at 4, Parvez Shardi Range, Kolkata, in spite of the fact that the property in question was agreed to have been purchased by the appellant vide Agreement of Purchase dated 28.01.2011 relevant to Assessment Year 2011-12 being prior to 01.04.2014 (Assessment Year 2014-15) when the amended provision of Section 56(2)(vii)(b)(ii) came into effect by way of Finance Act, 2013.

2. For that on the facts and circumstances of the case, the addition of Rs. 11,49,086/- u/s 56(2)(vii)(b)(ii).”

Assessment Year: 2014-15 Mr. Jamil Akhtar

Assessment Year: 2014-15 Mr. Jamil Akhtar relevant to the A.Y. 2011-12 which is prior to 01.04.2014, i.e. Assessment Year 2014-15 when the amendment came into force taxing the difference between the Deed Value and Stamp Duty Value u/s 56(2)(vii)(b)(ii) of the Income Tax Act for the first time. The same stands rejected and I hold that the Ld. A.O. was correct in referring the matter to the Valuation Officer, who in any case, all things considered has taken the date of valuation of the property as 28.01.2011, which is the date of initial payment if the 1st instalment for the purchase of the property at ‘A’ as has been claimed by the assessee. I agree with the observations of the Ld. A.O. made in the Remand Report, that as the date of valuation of the property was done on the initial date of agreement, the assessee-individual should not have any grievance on this score. Therefore, I hold that it would be fair and equitable to hold that the valuation done by the DVO amounting to 87,49,086/- in respect of the property at ‘A’ above should be considered for determining the addition u/s 56(2)(vii)(b)(ii) of the Income Tax Act. The Ld. A.O. is directed to act accordingly. As such the addition on account of the valuation is to be restricted to Rs. 11,49,086/-, the figure arrived on consequence to the reference to the DVO.” Still aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.

Assessment Year: 2014-15 Mr. Jamil Akhtar hand has submitted that the copy of MOU made by the assessee on 28th January, 2011 was not produced by the assessee before the A.O. as mentioned in paragraph no 7 of assessment order. It is however observed that the said MOU was duly taken into consideration by the A.O. in the remand report and even the market value of the property purchased by the assessee was got determined by him from the DVO as on 28th January, 2011. The valuation so made of the property purchased by the assessee as on 28th January, 2011 was also accepted by the A.O. in the remand report and by relying on the same, the addition of Rs. 2,55,06,250/- was restricted by the Ld. CIT(A) to Rs. 11,49,086/-. The fact that the property in question was agreed to be purchased by the assessee on 28.01.2011 thus was accepted by the authorities below and this being so, we find merit in the contention of the learned counsel for the assessee that the impugned addition made by the A.O. and sustained by the Ld. CIT(A) by relying on section 56(2)(vii)(b)(ii) cannot be sustained as the said provision was inserted with effect from 01.04.2014. We, therefore, delete the said addition and allow this appeal of the assessee.