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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: DR. MANISH BORAD & SRI ANIKESH BANERJEE
order
: January 30th, 2024 ORDER
Per Anikesh Banerjee, Judicial Member:
The instant appeal of the assessee was filed against the order of Ld. Commissioner of Income-tax (appeals)-NFAC, Delhi [in brevity ld. ‘CIT(A)’] dated 11.10.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the ‘Act’) for assessment year 2016-17. The impugned order was emanated from the order of the ld. Income-tax Officer, Ward-2(4), Durgapur (in brevity the ‘AO’) passed u/s 143(3) of the Act dated 28.06.2019.
The assessee has taken the following grounds of appeal:
I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
1. For that, on the facts and in the circumstances of the case and in law, the impugned additions/ disallowances are perverse, rather against evidence and material on record and without an iota of material or evidence to support and sustain the same. 2. (a) For that, on the facts and in the circumstances of the case and in law, the impugned addition amounting to Rs. 5,44,730/- on account of the difference between the Registered Value as per Departmental Valuation Officer and set fourth value sustained by the Commissioner of Income-tax (Appeal) - NFAC u/s 56(2)(viib) is purely on the basis of suspicion, surmises and conjectures as Independent Valuation Report valuing the property at Rs. 7,75,000/- has not been considered and the impugned addition is without any logical basis and ought to be deleted in entirety; (b) For that, on the facts and in the circumstances of the case and in law, the impugned addition amounting to Rs. 5,44,730/- on account of the difference between the Registered Value as per Departmental Valuation Officer and set fourth value sustained by the Commissioner of Income-tax (Appeal) - NFAC u/s 56(2)(viib) is purely on the basis of suspicion, surmises and conjectures as Independent Valuation Report has not been considered as the plot is land locked plot with no direct road to plot from outside. It is difficult to sell this property as entrance is through some else's plot in all sides" and the impugned addition is without any logical basis and ought to be deleted in entirety; (c) For that, on the facts and in the circumstances of the case and in law, the impugned addition amounting to Rs. 5,44,730/- on account of the difference between the Registered Value as per Departmental Valuation Officer and set fourth value sustained by the Commissioner of Income-tax (Appeal) - NFAC u/s 56(2)(viib) is purely on the basis of suspicion, surmises and conjectures because as per Independent Valuation Report has not been considered as the "plot is land locked plot with no direct road to plot from outside. It is difficult to sell this property as entrance is through some else's plot in all sides" since it is a land locked plot, Realisable market value of Property as on date will be 50 percent of Market Value of Rs. 15,50,000/- i.e. Rs. 7,75,000/- as per Independent Valuation Report and the impugned addition is without any logical basis and ought to be deleted in entirety.
3. For that, the appellant craves leave to add, alter, amend or withdraw any Ground at any time before or at the time of hearing.”
The brief fact of the case is that the assessee had filed return of income u/s 139(1) of the Act. During the impugned assessment year, the assessee I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
sold two fixed assets in nature of lands with a total consideration amounted to Rs. 11,72,160/-. The market value of the said properties was ascertained for stamp duty purpose by the registration authority amounted to Rs. 35,86,929/-. The difference amounted to Rs. 24,14,769/- related to difference of set fourth value and the stamp duty valuation was added back to the total income of the assessee and the assessment was framed u/s 143(3) of the Act.
Aggrieved, the assessee filed an appeal before ld. CIT(A). The ld. CIT(A) considered the report of DVO dated 08.04.2021 has accepted market value of both the lands amounted to Rs. 17,16,896/-. On the other hand, the assessee has ascertained separate valuation from the independent valuer and the valuation on dated 29.10.2018 was ascertained amounted to Rs.15,50,000/- . But, the ld. CIT(A) had not considered the valuation of independent valuer and had not rejected the same. Only the difference amounted to Rs. 5,44,730/- related to difference of the set fourth value amounted to Rs. 11,72,160/- and the valuation of registered valuer (DVO) amounted to Rs. 17,16,896/- are upheld by the ld. CIT(A). The order of the assessment was partly allowed.
Aggrieved, the assessee filed an appeal before this Tribunal against the appeal order.
Ld. A/R filed written submissions which are kept in the record. Ld. A/R further, argued and invited our attention to page no. 5 of the appeal order. The relevant paragraphs are reproduced as below: “5.1 During the period under consideration, the appellant had purchased two immovable properties for a total consideration of Rs. 11,72,160/-, the market value of which was assessed by registration authority for stamp duty purpose was Rs.35,86,929/-. The AO had added the difference between market value and purchase value of Rs. 24,14,769/- as income from other source u/s 56(2)(vii)(b) of IT Act 1961 to the returned income. The AO had also referred the case to DVO for getting the valuation report considering the facts of the case. The report from DVO was not received till finalisation of case. Finally the AO had added the said difference amount.
I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
5.2 During the course of appellate proceedings, the appellant has stated that he is having four different valuations of a single property, which is tabulated as under:- S. Description Area (in Transactio Govt, Valuation Valuation No. decimal) n value value/ by DVO on (Rs.) stamp on 29.10.2018 duty 08.04.2021 by value (Rs.) Independe (Rs.) nt valuer (Rs.) 1. Plot No. 22, Pratapur 112 1000160 2516239 1156176 1120000 Gram, Panchayat, Deed No. 1 020608304/2015 2. Plot No. 22, Pratapur 43 172000 1071690 560720 430000 Gram, Panchayat, Deed No. 1 020607961/2015 1172160 3587929 1716896 1550000 5.3 In view of the above report of District Valuation Officer, the difference between the Registered Value and set fourth value comes to Rs. 5,44,730/- (i.e.17,16,896 - 11,72,160). Therefore, the amount of Rs. 5,44,730/- is deemed to be income as per u/s 56(2)(vii)(b) of the IT Act. Hence, the addition of Rs. 5,44,730/- is confirmed as against Rs. 24,14,769/-. Thus, the appellant gets relief of Rs. 18,70,039/-.
6. In the result, the appeal is partly allowed.”
Ld. A/R in argument, placed that independent valuer made the valuation of the property amounted to Rs. 15,50,000/- and as the property is land locked property, so the 50% of the valuation should be considered. The ld. A/R prayed to accept the market value of the impugned lands amounted to Rs. 7,75,000/- (50% of Rs. 15,50,000/-). Accordingly, there is no difference between the property valued by the independent valuer and the property valued during the sale. Ld. A/R invited our attention to page no. 23 of the paper book; the details of the said plan of the plot no. 22 which clearly indicates that the property is entirely a land locked property in consideration of the other properties. The photograph is duly inserted as below:
I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
The ld. A/R respectfully relied on the order of the different Hon’ble High Courts and Hon'ble Apex Court which are reproduced as below:
“In the case of CIT vs. Naveen Gera [2010] 328ITR 516, Delhi High Court held as under: - "We are also in agreement with the submission made by Mr. Piyush Kaushik that it is settled law that in the absence of any incriminating evidence that anything has been paid over and above than the stated amount, the primary burden of proof is on the Revenue to show that there has been an understatement or concealment of income. It is only when such burden has been discharged, would it be permissible to rely upon the valuation given by the DVO. Further, the opinion of the DVO, perse, is not an information and cannot be relied upon in the absence of other corroborative evidence (See K. P. Varghese v. ITO [1981] 131 ITR 597 (SC), Civil Appeal No. 9468 of 2003 (Asst. CIT v. Dhariya Construction Co. [2010] 328 ITR 515 (SC)) decided by the apex court on February 16, 2010, CIT v. Shakuntala Devi [2009] 316 ITR 46 (Delhi), CIT v. Ashok Khetrapal [2007] 294 ITR 143 (Delhi) and CIT v. Manoj Jain [2006] 287 ITR 285 (Delhi)." In the case of Asst. CIT vs. Dhariya Construction Co. [2010] 328 ITR 515, (SC) held as under: "Having examined the record, we find that in this case, the Department sought reopening of the assessment based on the opinion given by the District Valuation Officer (DVO). The opinion of the DVO perse is not an information for the purposes of reopening assessment under section 147 of the Income-tax Act, 1961. The Assessing Officer has to apply his mind to the information, if any, collected and must form a belief thereon. In the circumstances, there is no merit in the civil appeal. The Department was not entitled to reopen the assessment." In the case of CIT vs. Shakuntala Devi [2009] 316 ITR 46, (DEL) held as under: - "It may be relevant to note that a Division Bench of this court, comprising Dr. Arijit Pasayat and D. K. Jain JJ., as their Lordships then were, reiterated that there must be a finding of the Revenue that the assessee had received amounts over and above the consideration stated in the sale deeds, following Varghese [1981 ] 131 ITR 597 (SC). Varghese [1981] 131 ITR 597 (SC) had also been followed and applied by the Supreme Court in CIT v. Godavari Corporation Ltd. [1993] 200 ITR 567. The Division Bench of this court in CIT v. Ashok Khetrapal [2007] 294 ITR 143 referred to the report of I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar. a Valuation Officer in the absence of any incriminating documents found in the course of a search. The decision in CIT v. Manoj Jain [2006] 287 ITR 285 (Delhi) is also to the same effect. In CIT v. Shivakami Co. P. Ltd. [1986] 159 ITR 71 (SC) their Lordships have once again reiterated that the onus whether the assessee had received more consideration than what was stated in the documents of transfer rested on the Revenue and in the absence of that burden being discharged it would be legally impermissible to make any inferences against the assessee." In the case of ITO vs. Sadhna Gupta 352 ITR 595 (Delhi) section 69B of the Income-tax Act, 1961 -Undisclosed investments in property] - Assessment year 2007-08 _ Whether, where there was no other material to indicate that any extra consideration had passed from assessee, over and above declared value in respect of purchase of property, addition under section 69B could be made based merely on report of District Valuation Officer - Held, no [Para 4] [In favour of assessee]”
Ld. D/R vehemently argued and fully relied on the orders of the Revenue authorities.
We heard the rival submissions and considered the documents available on the record. From assessment to appeal, the property was valued in different stages. During the assessment period the ld. AO considered only the valuation of Registration Authority related to stamp duty payment amounted to Rs. 35,87,929/-. But, during the appeal the ld. CIT(A) considered and accepted the valuation of the DVO which is amounted to Rs. 17,16,896/- and the difference in between the set fourth value and valuation of the DVO amounted to Rs. 5,44,730/- was upheld for addition. The entire amount of Rs. 5,44,730/- was deemed to be the income as per Section 56(2)(vii)(b) of the Act. In valuation report of DVO the nature of land locked is mentioned in report dated 08-04-2021, the report of DVO APB page 12. The relevant paragraph is culled as below: - “The property containing one No. land plot vide p R.S. & L.R. plot No. 22 is situated within Bagan area within Mouza-Pratap PUR J.L. 48 P.S. Faridpur Dist. Burdwan. There is no direct connecting road except a kancha village road nearby next plot. The property is situated at I.T.A. No.: 1251/KOL/2023 Assessment Year: 2016-17 Jayanta Kumar Sardar.
very distant place from Durgapur city. The amenities search s market, hospital, school, college etc. are available within 10-15 Km distance”
The ld. A/R respectfully relied on the order of Hon'ble Apex Court in the case of Dhariya Construction Co. (supra) and the order of Hon'ble Delhi High Court in the case of Naveen Gera (supra) and Shakuntala Devi (supra). We also respectfully relied on the following orders of the Hon'ble Apex Court and the Hon'ble Delhi High Court. Whether an addition can be made solely and simply on the basis of valuation report submitted by the DVO is no longer res integra. The land locked issue is duly considered by both DVO & independent valuer during the valuation of property. The impugned lands are in nature of land locked property and the independent valuer considered the market value amounted to Rs. 15,50,000/-. The ld. DR has not submitted any contrary judgment against the submission of assessee and has not made any strong argument against the fact cited by the ld. AR. After considering the different valuation report of land, the valuation of independent valuer is accepted and valuation of land is confirmed amount to Rs. 15,50,000/-. Accordingly, we quash the addition made by ld. CIT(A) amounted to Rs. 5,44,730/-. The market value of the land is confirmed amount to Rs. 15,50,000/- and the appeal of the assessee is partly allowed.
In the result, the appeal filed by the assessee in is partly allowed. Kolkata, the 30th January, 2024.