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Facts
The assessee purchased land at a value lower than the stamp duty valuation. The Assessing Officer reopened the case, treating the difference as unexplained investment under Section 69. The CIT(A) sustained the addition but reclassified it under Section 56(2)(x).
Held
The ITAT held that the lower authorities erred in invoking incorrect provisions and not providing proper opportunity to the assessee. The tribunal observed that the issue primarily relates to Section 50C and remitted the case back to the AO for a fresh assessment after giving the assessee a proper hearing.
Key Issues
The key legal issues are the validity of reopening the assessment, the correct section for making the addition (unexplained investment vs. income from other sources vs. capital gains), and the denial of proper opportunity to the assessee.
Sections Cited
Section 148, Section 147, Section 69, Section 115BBE, Section 56(2)(x), Section 50C
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Income Tax Appellate Tribunal, AGRA (SMC
Before: SHRI S. RIFAUR RAHMAN
Assessment Year: 2017-18 Vijay Pratap Singh Chauhan Vs. ITO, Nanakpur Chanderi Ashoknagar Ashok Nagar, Madhya Pradesh PAN : FPNPS4033A (Appellant) (Respondent) Assessee by Shri Amit Sogani, Adv. Department by Shri Anil Kumar, Sr. DR Date of hearing 17.02.2026 Date of pronouncement 17.02.2026 ORDER
The assessee has filed this appeal against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 09.07.2024 for the Assessment Year 2017-18.
Aggrieved, the assessee is in appeal before ITAT, raising following grounds:
1. That in the fact and circumstances of the case the learned AO erred in reopening the case u/s 148/147 of IT act and the learned CIT(A) also wrongly confirmed the same.
2. That the learned AO grossly mistaken in providing the unsigned copy of reasons recorded in writing and also failed to supply the copy of sanction by PCIT and the learned CIT(A) also do not accepted the mistake of learned AO.
3. That the learned AO failed to consider the reply submitted and wrongly added Rs 1766000/- in the total income of assessee u/s 69 of IT act which was deleted by learned CIT(A) but learned CIT(A) further mistaken in making the same addition u/s 50(2)(x) of IT act.
4. That the learned AO further failed and do not allowed the appeal effect of order of learned CIT(A).
5. That the other grounds shall be raised at the time of hearing.
Brief facts are, the assessee filed its return of income declaring Rs. 392140/- on 26.03.2018. It was noticed that the assessee purchased land at survey no 613 and 617 at Tehsil Chaderi for Rs 12 lakhs on 11.04.2016 and the relevant market value was Rs. 19.13 lakhs as per stamp duty valuation and further purchased another land with survey no 148 and 149 on 21.04.2016 for Rs. 4.90 lakhs, whereas the market value as per stamp duty was Rs. 15.43 lakhs. With the above reasons, the case of the assessee was reopened with the appropriate approval. Accordingly, the notice u/s 148 of the Income Tax Act, 1961 (in short ‘Act) was issued and served on the assessee. Further notices were issued and served on the assessee calling for the further information.
After considering the detailed submissions on the issue of objections to the reopening of the case and on the merit, the AO rejected the same and proceeded to make the addition by invoking the provisions of section 2 | P a g e 69 r.w.s 115BBE of the Act by treating the difference in the value declared in the registered documents and consideration paid by the assessee as unexplained investment.
Aggrieved with the above order, assessee preferred an appeal before Ld. NFAC, Delhi. After considering the submissions of the assessee, Ld CIT(A) sustained the addition made by the AO however, he observed that the case of the assessee falls u/s 56(2)(X) of the Act, since the assessee acquired the benefit as per the above section. He also observed that the assessee should have submitted the valuation report before the AO and should have contested the stamp duty valuation. The Assessee should have also requested for referring to the DVO for the proper valuation, since the assessee failed to carry out above, the assesssee also has not brought any material to contest before hi, therefore, he proceeded to sustain the addition u/s 56(2)(X) of the Act.
Aggrieved with the above order, the assessee is in appeal before us raising grounds in substance, objecting to the reopening of the case and additions made by the lower authorities.
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Considering the submissions of the both the parties, we are of the view, that the issue under consideration relating to the section 50C of the Act, the assessee has submitted the relevant documents of registration before the lower authorities and the lower authorities are basically quasi- judicial officers, they should have appreciated the proper facts on record and also brought to tax the relevant actual income instead of confirming the additions invoking wrong provisions of the Act. It is fact on record that the issue involved is relating to section 50C, the AO should have asked the assessee to submit the relevant documents substantiating the difference in value of consideration paid and the stamp duty valuation. He presumed that the issue falls under undisclosed investment; he proceeded to complete the assessment. In our view, the assessment is bad in law without giving proper opportunity to the assessee and also invoking wrong provisions of the act without appreciating the facts on record.
With the above, observations, we are inclined to remit this issue back to the file of AO to redo the assessment afresh after giving proper opportunity of being heard to the assessee and complete the assessment as per law.
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In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 17.02.2026 Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 18.02.2026 *Ganesh Kumar, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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