BHAKTHAVALSALAM RAMDAS,PALAKKAD V. THE INCOME TAX OFFICER, PALAKKAD

ITA 95/COCH/2024

AI Insights

The case involves Bhakthavalsalam Ramdas, the appellant, contesting an addition of Rs.1,06,45,000 to his income for the Assessment Year 2015-16, which was the difference between the actual purchase price of a capital asset and its stamp valuation adopted by the registration authorities. The appellant argued that the provisions of section 56(2)(vii)(b) of the Income Tax Act, 1961, were incorrectly applied, as the lower authorities did not consider the distracting factors in the asset's valuation nor referred the matter to the DVO as required by the third proviso of the section. The respondent supported the addition based on the observed discrepancy between the purchase price and the stamp valuation. The Tribunal, referencing the case of Sunil Kumar Agarwal v. CIT, held that the reference to the DVO is mandatory and not dependent on the taxpayer's objections during the assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23508 (ITAT-COCHIN)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 13-02-2024
• Other Referred Cases: Sunil Kumar Agarwal v. CIT [2014] 373 ITR 83 (Cal)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: V.SWARNALATHA
• Assessee Lawyers: SURESH KUMAR
• Keywords: Sale consideration of property below Jantri Value
• Section: 250; 56(2)(vii)(b)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Satbeer Singh Godara, Judicial Member and Shri Amarjit Singh, Judicial Member ITA No. 95/Coch/2024 (Assessment Year: 2015-16) Bhakthavalsalam Ramdas 01 M.R. Raman Chettair Son T.B. Road, Palakkad 678014 [PAN: ACMPR3451L] vs. Income Tax Officer Ward - 2, Palakkad (Appellant) (Respondent) Appellant by: Shri Suresh Kumar, CA Respondent by: Smt. V. Swarnalatha, Sr. D.R. Date of Hearing: 19.08.2024 Date of Pronouncement: 23.10.2024 O R D E R Per Bench This assessee’s appeal for A.Y. 2015-16 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/ NFAC/S/250/2023- 24/1058716340(1) dated 13.12.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act). Heard both the parties. Case file perused. 2. It emerges at the outset that the assessee’s sole substantive ground raised herein challenges the correctness of both the learned lower authorities’ invoking section 56(2)(vii)(b) addition of Rs.1,06,45,000/- which admittedly represents the difference between his actual purchase price and the stamp valuation adopted by the registration authorities concerned. Learned counsel seeks to distinguish the 2 ITA No. 95/Coch/2024 Bhakthavalsalam Ramdas application of the impugned provision that both the lower authorities have neither examined the distracting factors in the valuation of the assets purchased nor have they made any reference to the DVO under the 3rd proviso therein. Learned counsel claims that this latter argument is indeed over and above the assessee’s stand in principle that the above statutory provision itself does not apply in the given facts and circumstances of the case. 3. Learned Sr. D.R. has drawn strong support from both lower authorities’ action making the impugned addition once they have noticed the difference between the assessee’s actual purchase price vis-à-vis the stamp valuation of the relevant capital asset adopted in the registration process. She further claims that before an assessee pleads the above reference to the DVO before the tribunal for the first time, it was his mandatory onus to object to the stamp valuation during the course of assessment itself. We don’t find any merit in the Revenue’s instant last argument going by Sunil Kumar Agarwal v. CIT [2014] 373 ITR 83 (Cal) holding that section 50C(2) reference to the DVO; adopted in the 3rd proviso to sec.56(2)(vii)(b) is indeed mandatory in nature and is not dependent on the concerned taxpayer raising such objections before the Assessing Officer. 4. Faced with this situation, we deem it appropriate to direct the Assessing Officer to reexamine the entire issue afresh after making the reference to DVO subject to a rider that any consequential addition shall be indeed subject to assessee raising all factual and legal arguments in relevant proceedings which shall be adjudicated as per law. Ordered accordingly. 5. This assessee’s appeal is allowed for statistical purposes in above terms. 3 ITA No. 95/Coch/2024 Bhakthavalsalam Ramdas Order pronounced in the open court on 23rd October, 2024. Sd/- Sd/- (Amarjit Singh) Accountant Member (Satbeer Singh Godara) Judicial Member Cochin, Dated: 23rd October, 2024 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "