UMESH PRASAD SHAW ,HOWRAH vs. ITO, WARD - 48(3), KOLKATA , KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA [Before Shri P.M. Jagtap, Hon’ble Accountant Member] I.T.A. No. 1943/Kol/2017 Assessment Year: 2014-15 Umesh Prasad Shaw…………………………..…..………………………………………….…….……...Appellant C/o. D.J. Shaw & Co Kalyan Bhawan 2, Elgin Road Kolkata – 700 020 [PAN : ADYPS 6806 M] I.T.O. Ward-48(3), Kolkata………………………………………...……..……………………..…. Respondent Kolkata Appearances by: Shri Miraj D. Shah, AR, appeared on behalf of the assessee. Shri S.M. Tauheed, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : February 12th, 2017 Date of pronouncing the order : February 23rd, 2018 O R D E R Per P.M. Jagtap :-

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-14, Kolkata dt. 30/06/2017 (hereinafter the ‘ld. CIT (A)’) passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’) and the solitary issue involved therein relates to the addition of Rs. 17,96,260/-made by the AO and confirmed by the Ld. CIT(A) u/s 56(2)(vii)(b)(ii) of the Act.

2 I.T.A. No. 1943/Kol/2017 Assessment Year: 2014-15 Umesh Prasad Shaw matter. The explanation offered by the assessee in this regard was not found acceptable by the AO and he proceeded to make an addition of Rs. 17,96,260/- to the total income of the assessee under the head “income from house property” in the assessment completed under Section 143(3) vide an order dated 20/09/2016. On appeal, the ld. CIT(A), confirmed the said addition. Aggrieved by the order of the ld. CIT(A), the assessee has preferred the appeal before the Tribunal. 3. I have heard the arguments of both the sides and also preferred the relevant material available on record. The ld. Counsel for the assessee contended that the assessing officer before making the impugned addition u/s 56(2)(vii)(b)(ii) of the Act, on the basis of stamp duty valuation, should have made a reference to the valuation officer for determining the Fair Market Value of the property as per the 1st proviso to section 56(2)(vii)(b)(ii) of the Act. The ld. D/R, on the other hand, has contended that the said proviso can be invoked only when the stamp duty value is disputed by the assessee on the specific grounds and since no such dispute was specifically raised by the assessee during the course of assessment proceedings, the AO was not required to make a reference to the DVO. It is, however, observed that this issue is squarely covered in favour of the assessee by the decision of the Hon’ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT, 372 ITR 83, cited by the ld. Counsel for the assessee, wherein a similar issue has been decided by the Honourable jurisdictional High Court in the context of Section 50C of the Act, by observing as under: – “For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law.”

3 I.T.A. No. 1943/Kol/2017 Assessment Year: 2014-15 Umesh Prasad Shaw 4. In my opinion, the ratio of the decision of the Hon’ble Calcutta High Court in the case of Sunil Kumar Agarwal (supra), is squarely applicable even in the context of the provisions of Section 56(2)(vii)(b)(ii) of the Act, the relevant provisions of which are analogous to the provisions of Section 50C. I, therefore, respectfully follow the said the decision and restore the matter to the file of the AO for deciding the same afresh after referring the issue of determination of the Fair Market Value of the assessee’s property as on 12/02/2014 to the Departmental Valuation Officer. 5. In the result, appeal of the assessee is treated as allowed for statistical purposes.

Kolkata, the 23rd day of February, 2018. Sd/- [P.M. Jagtap] Accountant Member Dated :23.02.2018 {SC SPS} Copy of the order forwarded to: 1. Umesh Prasad Shaw C/o. D.J. Shaw & Co Kalyan Bhawan 2, Elgin Road Kolkata – 700 020 2. I.T.O. Ward-48(3), Kolkata Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.