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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: DR. MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE
O R D E R
PER SONJOY SARMA, JM:
This appeal of the assessee for the assessment year 2016-17 is directed against the order dated 18.06.2024 passed by the ld. Commissioner of Income-tax (Appeals), NFAC, Delhi, [hereinafter referred to as ‘the ld. CIT(A)’].
Brief facts of the case are that assessee is an individual filed a return of income for the AY 2016-17 on 27.03.2017 by declaring a total income of Rs.3,90,210/-. The case of the assessee was selected for scrutiny under CASS and an assessment order u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) was passed on 06.12.2018 where the assessed income was determined at i) Addition u/s. 56(2)(vii)(2) of the Act - during the scrutiny assessment, the AO noted that assessee had purchased an immovable property for Rs. 33,00,000/- while stamp duty value for the property was Rs.83,21,918/-. In accordance with section 56(2)(vii)(b) of the Act, the difference between the stamp duty and purchase consideration (Rs.50,21,918/-) was added to the assessee’s total income under the head “income from other sources”.
ii) Sale of property – the assessee also sold property for Rs.39,16,200/-. However, the Ld. AO alleged that assessee acknowledged having received Rs.74,50,000/- against the transaction. The AO noted in the assessment order the discrepancy between the value mentioned in the sale deed (Rs.39,16,200/-) and the assessee’s admission of receiving Rs.74,50,000/-. Due to the absence of evidence supporting the assesee’s claim the AO made an addition of Rs.35,33,800/- as undisclosed income from the property sale transaction. The assessee’s appeal before the Commissioner of Income Tax, where the appeal of the assessee partially allowed. The Ld. CIT(A) called a remand report while passing the impugned order from the District Valuation Officer (DVO), which determined the property’s marked value to be Rs.79,80,000/-. Based on this valuation report, the Ld. CIT(A) restricted the addition to Rs.46,80,000/- in place of Rs.50,21,918/-, but upheld the AO’s action regarding the sale of property. The assessee dissatisfied
At the time of hearing, Ld. AR argued that they were not given any opportunity to present documents showing the property’s value was lower than DVO’s report. The Ld. AR requested before the bench that matter may be remanded back to the AO, allowing the assessee to furnish documents that prove the properties actual value was much lower than the stamp duty valuation and DVO’s report. The Ld. AR on the issue of sale of property by the assessee stated that assessee had never submitted any evidence furnishing receipt of Rs.74,50,000/- and the actual sale consideration was Rs.39,16,200/-. He, therefore, requested that this issue be reexamined as no documentary evidence was presented earlier to substantiate the assessee’s claim.
On the other hand, the Ld. DR supported the order of the Ld. CIT(A) and opposed the Ld. AR’s contention.
We have heard the rival submissions and perused material placed before us. We find that DVO’s report was submitted before the Ld. CIT(A) but assessee had not given opportunity to challenge for counter the valuation. The assessee did not have the chance to submit documents proving that property valuation was lower than the DVO’s assessment or stamp duty valuation. In the interest of natural justice, we believe that the issue of the property valuation should be remanded to the AO for reexamination allowing assessee a reasonable opportunity to submit the necessary document by calling DVO’s report on this issue.
Issa Mohammad A.Y. 2016-17 6. With respect to the another issue to the sale of the property, the contention of assessee consistently maintained that the sale consideration was Rs.39,16,200/- and there was no evidence supporting that the receipt of Rs.74,50,000/- as alleged by the AO. This issue also requires re-examination by the AO based on the documentary evidence which are submitted by the assessee before him. In view of the above, both the grounds of appeal of the assessee are set aside to the file of Ld. AO with a direction to re-examine the issue of property valuation after providing the assessee reasonable opportunity to submit supporting documents and re-examine the sale transaction of property based on the documents submitted by the assessee. The ground nos. 2 and 3 are general in nature need not require to be adjudicated. In terms of the above, appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee allowed for statistical purposes.
Order pronounced in the open court on 03.10.2024 Sd/- Sd/- (Dr. MANISH BORAD) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 03.10.2024 Jd. Sr. P.S.