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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DLEHI
Before: SHRI ANIL CHATURVEDI & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Assessee/Appellant herein against the order dated 30.08.2019, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)- 37, New Delhi (in short “Ld. Commissioner”), u/s. 250(6) of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2015-16.
Though notice for hearing on 16.03.2023 was issued to the Assessee, however, the Appellant neither appeared nor filed any adjournment application. From the record it also appears that on the previous dates of hearing as well, the Appellant did not appear in spite of sending notices at the address mentioned in Form No. 36 by the Appellant. Even the Registry do not have any alternative address to send the notice through post, hence, we are inclined to decide this appeal as ex parte.
In the instant case, the Appellant declared an income of Rs.14,32,540/-, by e-filing its return of income on dated 25.11.2015 which was taken up for limited scrutiny under CASS and consequently, statutory notices have been issued to the Appellant, in response to which the Appellant attended the proceedings and filed necessary submissions and documents. From the details filed, it was observed by the Assessing Officer that during the year under consideration, the Appellant company was engaged in the business of real estate developers, construction of complex, malls, commercial building etc and has sold shop No. 9 to 13 at plot No. 902, Civil Lines, Shashtri Chowk, Bijnore measuring to the extent of 335.56 sq. Mtr. or 3612 sq ft. to M/s. Reliance Corporate IT Park Ltd. for sale consideration of Rs.1,66,15,200/-. On enquiry by sending the notices u/s. 133(6) of the Act on dated 28.11.2017 to the Registrar office to obtain the details of the property sold, the reply was received by the Assessing Officer on dated 05.12.2017 which reveals that the property was sold at a consideration of Rs.1,66,15,200/-, but the stamp value of the said property was Rs. 3,35,22,444/- and therefore, the Director Shri Sunil Khanna was summoned u/s. 131 of the Act, whose statement was recorded on oath on dated 11.12.2017 wherein though he has admitted the circle rate to the tune of Rs.3,35,22,444/- as per Municipal Corporation, however, claimed that the company has sold the same for Rs.1,66,15,200/-, which is the actual market value of the property. The Assessing Officer also issued show cause notice on dated 22.12.2017 to the Appellant company as well, in response to which the Appellant company filed its reply dated 22.12.2017, but the same was not found tenable in the eyes of law as well as considering the surrounding circumstances, human conduct and preponderance of probability by the Assessing Officer, by perusing the provisions of section 43CA of the Act, which prescribes as under :
“Where the consideration received or accruing as a result of the transfer by an Assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer.”
The Assessing Officer, ultimately, added an amount of Rs.1,69,07,244/- in the income of the Appellant company by holding that in view of the above observations, the Appellant company has sold the property at Rs.1,66,15,200/- instead of stamp value of Rs.3,35,22,444/- and the Director of the Appellant company himself admitted while recording the statement that the circle rate of the property was Rs.3,35,22,444/-, hence, the difference between stamp value and sale consideration of Rs. 1,69,07,244/- (3,35,22,444 - 1,66,15,200) is being added back to the total income of the Appellant company.
The Appellant being aggrieved, challenged the said addition before the ld. Commissioner, who vide impugned order affirmed the addition to the extent of Rs.35,18,400/- only by holding as under:-
5.1 Ground No. 1 to 3 pertains to addition of Rs. 1,69,07,244/- being the difference between stamp value and sale consideration of the property. The brief facts of the case that the Appellant filed return of income declaring income of Rs. 14,32,540/-. The case was selected for scrutiny. The AO noted that the assessee during the year under consideration has sold a property, being shop no. 9 to 13 at Plot No. 902, Civil Lines, Shastri Chowk, Bijnore measuring 335.56 sq. mtr or 3612 sq ft. to M/s Reliance Corporate IT Part Limited for a sale consideration of Rs. 1,66,15,200/- whereas stamp duty on registration has been paid on value of Rs.3,35,22,444/-. The AO made an addition of Rs. 1,69,07,244/-, being the amount of difference between stamp duty value and actual sale consideration. Further, the AO has also referred the matter to DVO for valuation. However, report was not received from the District Valuation
Officer till completion of the assessment. Aggrieved by the addition, the Appellant brought the matter in the present appeal. 5.1.1 Subsequently, the report from DVO has been received by the AO and the DVO has assessed the value of the property at Rs.2,01,33,600/- as against the sale consideration of Rs. 1,66,15,200/-. In appeal, the Ld.AR submitted that he AO has passed a subjective order and the AO did not rely on the submission made by the Appellant in the course of assessment proceedings. It is also submitted that the valuation report of the DVO cannot be relied upon as the factors and methods on which the said value has been arrived at are not available. 5.1.2 I have carefully considered the finding of the AO, Remand Report, report of the DVO and submission of the Ld.AR. I find that the AO himself has referred the property sold to DVO for valuation and now in the remand report dated 27.02.2019 raising question over the method of valuation used by the DVO. The DVO has used rent capitalization method for valuation of the property, which is a prescribed method for valuation. The reason given by the AO in the remand report for rejecting the valuation done by the DVO is also puerile in as much as he had no authority to step into the shoes of the Govt, approved valuer and pronounced his own judgment by sit ting in his armchair. AO failed to point out any lacunae or fallacies in respect of the DVO report to substantiate his claim that the valuation report was not reliable. In the remand report AO did not cite any comparable evidence of sale of similar kind of property at the value adopted by AO in the assessment order. 5.1.3 In view of the aforesaid discussions, the value determined by the DVO should be taken as the fair market value of the property sold and the addition is restricted to the difference of Rs.35,18,400/- (Rs.2,01,33,600/- - Rs. 1,66,15,200/-). The addition to the extent of Rs. 35,18,400/- is confirmed and the balance is deleted. These grounds of appeal are partly allowed.”
5. We have given thoughtful consideration to the peculiar facts and circumstances of the case and the orders passed by the authorities below and observe that the Assessing Officer himself has referred the property under consideration to the DVO for valuation who assessed the value of property at Rs.2,01,33,600/- as against the sale consideration of Rs.1,66,15,200/- and circle rate of Rs.3,35,22,444/-. Though the Assessing Officer himself has referred the property to the DVO for valuation, however, by filling remand report dated 27.02.2019 before the ld. Commissioner raised the question over the method of valuation used by the DVO who has used the rent capitalization method for valuation of the property as a prescribed method for valuation.
The ld. Commissioner by considering the peculiar facts that the Assessing Officer has failed to point out any lacunae or fallacies in respect of the DVO report to substantiate his claim that the valuation report was not reliable and in the remand report, the Assessing Officer did not cite any comparable evidence of sale of property at the value adopted by the Assessing Officer in the assessment order, ultimately accepted the value determined by the DVO, as the fair market value of the property sold and therefore, considering the peculiar facts and circumstances of the case restricted the addition to the difference of Rs.35,18,400/- (Rs.2,01,33,600 - Rs. 1,66,15,200). Considering the decision of the ld. Commissioner in totality, we do not find any reason and/or material to contradict the findings of the ld. Commissioner in coming to the said decision. Hence, in our considered opinion, the order impugned does not call for any interference. Consequently, the appeal filed by the Appellant stands dismissed.
In the result, the appeal filed by the Appellant stands dismissed.
Order pronounced in the open court on 29/03/2023.