MAHESH VASANT GHARE,MUMBAI vs. INCOME TAX OFFICER WARD 24(2)(1), MUMBAI, PIRAMAL CHAMBER, LAL BAUG. MUMBAI

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ITA 811/MUM/2024Status: DisposedITAT Mumbai01 July 2024AY 2017-2018Bench: SHRI NARENDRA KUMAR BILLAIYA (Accountant Member), SHRI RAHUL CHAUDHARY (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that even if the DVO reference was made in the case of the wife, it should be considered for the common property. The AO should have adopted the DVO report after confronting it to the assessee. Thus, the issue was restored to the file of the AO.

What were the facts?

The assessee purchased a property for Rs. 81,00,000, while the stamp duty paid was Rs. 1,29,69,000. The AO treated the difference of Rs. 24,34,500 (50% of the difference) as income under section 56(2)(vii)(b) as the property was jointly purchased with his wife. The assessee's contention that the matter should have been referred to the DVO was not accepted by the CIT(A).

What were the issues?

Whether the AO was justified in confirming the addition of the difference between Stamp Duty Valuation and purchase consideration without referring the matter to the DVO, especially when a similar reference was made in the case of the assessee's wife for the same property?

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA & SHRI RAHUL CHAUDHARY

For Appellant: Shri Reepal Tralshwala
For Respondent: Shri Himanshu Sharma, CIT- DR

This appeal by the assessee is preferred against the order dated 19/01/2024 by National Faceless Appeal Centre, Delhi pertaining to A.Y.2017-18.

2.

The solitatry grievance of the assessee is that the learned CIT(A) erred in confirming the addition of Rs.24,34,500/- being the difference between Stamp Duty Valuation (SDV) and purchase consideration.

Mahesh Vasant Ghare. ITA no.811/Mum/2024

3.

Briefly stated the facts of the case are that the return of income of the assessee was selected for scrutiny assessment through CASS on the information that during the year under consideration the assessee has purchased immovable property of Rs.81,00,000/- whereas the stamp duty paid was of Rs.1,29,69,000/-. The notice u/s 142(1) of the Act was issued to the assessee who was asked to explain the difference amount of Rs.48.69 lakhs in the stamp duty valuation and the purchase consideration and why the same should not be taken as income from other soures u/s 56(2)(vii)(b) of the Act. On receiving no plausible reply, and on finding that the said property was purchased by the assessee jointly with his wife and the share of the assessee being 50%, the AO made the addition of Rs.24,34,500/- being 50% of the impugned difference.

4.

The assessee agitated before the learned CIT(A) but without any success. The contention of the assessee was that the matter should have been referred to the DVO. The learned CIT(A) did not accept this contention of the assessee as the request for the reference to the DVO was never made before the AO. Though, the request was made before the learned CIT(A) but the CIT(A) did not refer the matter to the DVO but confirmed the assessment. Before us, the counsel for the assessee pointed out that the matter was referred to the DVO in the case of wife of the assessee but since the assessment was getting barred by limitation, the AO did not wait for the report and made the impugned addition.

5.

After giving thoughfull consideration to the orders of the authorities below, we are of the considered view that once the matter has been refered to Page | 2

Mahesh Vasant Ghare. ITA no.811/Mum/2024 the DVO even if it is in the case of the wife of the assessee and the impugned property is common, therefore, the AO should adopt the DVO report after confronting the same to the assessee. Therefore, we deem it fit to restore the entire issue to the file of the AO. The AO is directed to consider the report of the DVO and decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee. And after confronting the report of the DVO.

6.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 01/07/2024

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