AKBAR MOHAMMADLI KAZI,DADAR EAST V. INCOME TAX OFFICER WARD 28 1 1 MUMBAI , MUMBAI

ITA 4799/MUM/2025

AI Insights

The case involves Akbar Mohammadli Kazi, a proprietor and partner in a development firm, who appealed against the order of the CIT(A) which upheld the addition made by the assessing officer under section 43CA of the Income Tax Act. The addition was based on the difference between the sale consideration of a property and its value determined by the stamp valuation authority. The assessee requested a reference to the DVO for a fair market valuation, which was denied by the CIT(A). The Tribunal found that the CIT(A) has co-terminus powers with the assessing officer and can seek a remand report, thus allowing the appeal and directing a DVO valuation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775610 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAHESH PARWANI
• Assessee Lawyers: MANDAR VAIDYA
• Keywords: Condonation of delay; Reasonable cause; Sale consideration of property below Jantri Value; Fair market value
• Section: 43CA; 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 4799/MUM/2025 (AY: 2014-15) (Physical hearing) Akbar Mohammadli Kazi 214, 2nd Floor, Wadala Udyog Bhavan Naigaon, Cross Road, Dadar East, Mumbai – 400031. [PAN: AFAPK0759D] Vs ITO, Ward – 28(1)(1), Mumbai Vashi Railway Station Complex, Navi Mumbai – 400703. Appellant / Assessee Respondent / Revenue Assessee by Shri Mandar Vaidya, Advocate Revenue by Shri Mahesh Parwani, Sr. DR Date of Institution 29.07.2025 Date of hearing 11.09.2025 Date of pronouncement 11.09.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT(A)-1, Hyderabad dated 25.03.2025 for assessment year (AY) 2014-15. The assessee has raised following grounds of appeal: “1. The Ld. CIT(A) fell in error of law in declining to make a reference to the DVO, as prayed for by the Appellant/assessee. 2. The Ld. CIT(A) misdirected himself in observing that since the assessee has accepted the valuation for the purpose stamp duty, the assessee cannot challenge the valuation for the purpose of Income tax Act. It is submitted that if that contention is to be accepted, then the provisions of sec.50C(2) would be otiose and superfluous. 3. The Ld. CIT (A) fell in error of law in not appreciating that the CIT(A) has power to make reference to the DVO for valuation, u/s. 250 of the Act and hence the Ld. CIT(A) ought to have made a reference to the DVO. 4. The appellant craves leave to add, alter, amend, modify any grounds of appeal.” Printed from counselvise.com ITA No. 4799/Mum/2025 Akbar Mohammadli Kazi 2 2. Rival submissions of both the parties have been heard and record perused.The learned Authorised Representative (ld. AR) of the assessee fairly submits that there is delay of 59 days in filing appeal before the Tribunal. The assessee has filed his affidavit for condonation of delay in filing appeal. The ld. AR of the assessee submits that delay in filing appeal is neither intentional nor deliberate. The assessee has not received SMS alert or copy of impugned order passed by ld. CIT(A). The assessee came to know about passing of the impugned order when his consultant assessed the Income Tax Business Application (ITBA) portal and find that appeal of assessee had already been dismissed. The assessee immediately took step and filed the present appeal. The ld. AR of the assessee prayed for condoning the delay. On merit, the ld. AR of the assessee submits that assessee is a proprietor of Evergreen Enterprises and partner in the firm Evergreen Developer. The assessee being a developer sold certain unit including a shop having area of 1413 square Feet for a consideration of Rs. 25 lakhs. The stamp duty authority estimated the value of said shop at Rs. 49,31,000/-. The assessing officer made addition by invoking the provisions of section 43CA and added the difference vis-à-vis, the sale consideration and the value determined by stamp valuation authority. Before ld. CIT(A), the assessee made specific request to refer the matter to departmental /District Valuation Officer (DVO) for ascertaining/estimating the fair market value of impugned asset. The ld. CIT(A) not accepted the prayer of assessee and upheld the action of assessing officer. The ld. AR of the assessee that he has limited prayer to Printed from counselvise.com ITA No. 4799/Mum/2025 Akbar Mohammadli Kazi 3 restore the matter back to the file of assessing officer for making reference to DVO and on receipt of report of DVO, passed assessment order afresh. 3. On the other hand, learned senior departmental representative (ld. Sr. DR) for the revenue not seriously opposed the plea of condonation of delay in filing appeal by assessee. However, on merit, the ld. Sr. DR submits that assessee has not made any prayer for making reference to DVO during assessment proceeding. The assessee made such prayer before ld. CIT(A). The ld. CIT(A) has no power to make difference to DVO. Such power is only vested with assessing officer. Even otherwise, as per plain reading of language of section 50C(2), wherein the word “may” is used, so it makes clear that it is the discretion of assessing officer either to refer the matter to DVO or not. 4. I have considered the rival submissions of both the parties and perused the orders of lower authorities carefully. I have also deliberated on the affidavit filed by assessee for seeking condonation of delay. I find that there is slight delay of 59 days in filing appeal. The assessee in his affidavit has categorically contended that no SMS alert was received about passing of order by ld. CIT(A) and that delay in filing appeal is not intentional. Considering the contention of assessee, I find that there is reasonable cause for delay in filing appeal. Therefore, the delay in filing appeal is condoned. Now, adverting to merits of the case. 5. I find that the ld. AR of the assessee has made a limited prayer for making reference to DVO for ascertaining the value of asset on the date of sale. The ld. Sr. DR for the revenue objected on two counts (i) that the ld. CIT(A) has Printed from counselvise.com ITA No. 4799/Mum/2025 Akbar Mohammadli Kazi 4 no power for making such reference and that power of assessing officer is discretionary for making such reference. In my view, both the contention of ld. Sr. DR for the revenue is misconceived. The ld. CIT(A) has co-terminus power as of assessing officer. Moreover, such prayer can be exercised by ld CIT(A) either by seeking remand report and during remand proceedings, the assessing officer can exercise his jurisdiction for making reference to DVO. Further, the language of sub-section (2) of 50C clearly mandates for making reference to DVO and such statutory provisions cannot be left at the discretion of assessing officer. Thus, accepting the prayer of ld. AR of the assessee, the matter is restored back to the file of assessing officer with the direction to obtain report of DVO in respect of impugned asset on the date of sale. The assessee is directed to provide complete details of asset along with necessary evidence for making reference to DVO. The assessing officer on receipt of report of DVO shall pass order in accordance with law. In the result, ground of appeal of assessee are allowed for statistical purpose. 6. In the result, the appeal of assessee is allowed for statistical purpose. Order was pronounced in the open Court at the time of hearing on 11/09/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated:11/09/2025 Biswajit Printed from counselvise.com ITA No. 4799/Mum/2025 Akbar Mohammadli Kazi 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "