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Facts
The Assessing Officer made an addition of Rs. 5,26,400/- based on the difference between the purchase price and circle rate of a property under Section 56(2)(vii)(b) of the Income Tax Act, 1961. This addition was subsequently confirmed by the Ld. CIT(A), NFAC. The assessee argued that the actual consideration paid was higher than noticed by the AO and that all payments were made through account payee cheques.
Held
The Tribunal remanded the issue back to the file of the Assessing Officer (AO). The AO is directed to examine the chart of payments submitted by the assessee and verify its factual accuracy. The assessee must be given a reasonable opportunity of being heard during this process.
Key Issues
Whether the assessment was reopened without proper application of mind and independent inquiry; Whether the addition made under Section 56(2)(vii)(b) for the difference between property purchase price and circle rate is justified, considering the assessee's claim of higher actual payment.
Sections Cited
56(2)(vii)(b), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
Before: SHRI SHAMIM YAHYA
ORDER This appeal by the assessee is directed against the order of National Faceless Appeal Centre (NFAC), New Delhi, dated 20.11.2023 pertaining to Assessment Year 2016-17.
The grounds of appeal reads as under:-
1 1. That Ld. CIT(A), NFAC has grossly erred in law as well as on facts in not holding that assessment made is bad in law as the assessing officer has reopened the assessment without making any independent enquiry or application of mind and merely on the basis of information received. 2 2. That Ld. CIT(A), NFAC has erred in law as well as on facts in confirming the addition made by Ld. A0 of Rs. 5,26,400/- on account of difference of purchase price and circle rate of the property u/s 56(2)(vii)(b) of the Income-tax Act, 1961 without noticing that assessee has already invested for the amenities and so cost of the property is much higher. 3 3. That on facts and circumstances of the case, Ld. CIT(A), NFAC erred in upholding the order of assessment without appreciating: a. That the actual consideration paid by assessee was Rs. 35,42,352/-. b. That all payment have been made through account payee cheques. 4 4. That the Ld. AO has erred in law as well as on facts in initiating the penalty proceeding u/s 271(1)(c) of the Act. 5 The above grounds of appeal s are independent of, and without prejudice to each other. That the appellant craves leave to add, alter, amend or withdraw all or any grounds herein or add any further grounds as may be considered necessary either before or during the hearing of these grounds.”
3. Brief facts of the case are that in this case, the Assessing Officer made addition of Rs.5,26,400/- on account of difference of purchase price and circle rate of the property u/s 56(2)(vii)(b) of the Income Tax Act, 1961.
4. Upon assessee’s appeal, the Ld. CIT(A) confirmed the addition.
Before me, the ld. Counsel for the assessee gave a chart and submitted that actually the assessee has paid more than that noticed by the Assessing Officer. In this regard, the chart submitted by the assessee is as under:-
Referring to the chart above, the ld. Counsel for the assessee contended that there is no case of shortage of amount paid to the circle rate, therefore, he prayed that an opportunity may be granted to the assessee.
Per contra, the Ld. DR did not have any objection if the matter is remanded back to the file of the Assessing Officer to examine the factual veracity in the submission of the assessee.
Upon careful consideration, I find that in this case, the interest of the justice will be served, if the issue is remanded to the file of the Assessing Officer. The Assessing Officer shall examine the chart reproduced hereinabove and veracity of the submission of the assessee. Needless to add, the assessee be given reasonable opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 09th February, 2024.