BHAWANI APARTMENT PVT. LTD.,HOWRAH V. DCIT, CEN. CIR. 3(2), KOLKATA

ITA 387/KOL/2024

AI Insights

The case involves Bhawani Apartment Pvt. Ltd., the appellant, contesting an addition of \\u20b975,57,120 to their income under section 56(2)(x) of the Income Tax Act, as confirmed by the Commissioner of Income-tax (Appeals), Kolkata. The addition was based on the difference between the purchase consideration and the actual cheques honored for a property transaction, without referring the matter to a valuation officer as mandated by the Calcutta High Court in the case of Sunil Kumar Agarwal Vs. CIT. The property in question had several tenants and was under legal dispute, affecting the transfer of ownership and possession. The Tribunal agreed with the appellant's request to remand the matter back to the AO for a detailed examination of the property's status and potential referral to the DVO for valuation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473946 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Other Referred Cases: Sunil Kumar Agarwal Vs. CIT [2014] 47 taxmann.com 158 (Calcutta)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BONNINE DEBBARAMA
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Sale consideration of property below Jantri Value

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 387/KOL/2024 (Assessment Year:2018-19) Bhawani Apartment Pvt. Ltd. 4/2, Agrasain Street, Liluah, Howrah-711204, West Bengal Vs. DCIT, Cen. Cir. 3(2) Shanti Pally, Eastern Metropolitan, Opposite Ruby, Kasba, Kolkata-711204 West Bengal (Appellant) (Respondent) PAN No. AAECB4525A Assessee by : Shri Miraj D. Shah, AR Revenue by : Shri Bonnine Debbarama, DR Date of hearing: 06.03.2025 Date of pronouncement : 12.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-21 (hereinafter referred to as the “Ld. CIT(A)”] dated 27.12.2023 for the AY 2018-19. 02. At the outset, the ld. Counsel for the assessee submitted that the dispute before this Tribunal is only in respect of addition confirmed by the ld. CIT (A) amounting to ₹75,57,120/- as made by the ld. AO u/s 56(2)(x) of the Act without referring the matter to the valuation officer as mandated by the Hon'ble Calcutta High Court in case of Sunil Kumar Agarwal Vs. CIT reported in [2014] 47 taxmann.com 158 (Calcutta). The ld. AR submitted that the assessee, during the year, has purchased a property for a consideration of ₹1,42,88,000/- which had the same stamp valuation. The ld. AR submitted that the assessee handed all the account payee cheques in discharge of the purchase consideration and the seller of the property realized the cheques to Page | 2 ITA No.387/KOL/2024 Bhawani Apartment Pvt. Ltd; A.Y. 2018-19 the extent of ₹39,30,880/-. However, due to dispute arising out of the said property, the remaining payments of cheques were stopped by the assessee. The ld. AR submitted the legal proceedings were initiated and even now, dispute is not settled. It was further submitted that this property has several tenants in it. The ld. AR argued that the difference between the purchase consideration and the actual cheques honoured was added u/s 56(2)(x) of the Act to the income of the assessee without even referring the issue to the District Valuation Officer (DVO) u/s 55 of the Act. The ld. AR prayed that the issue may be kindly be restored to the file of the ld. AO so that the current status and ownership of the property could be ascertained and also ascertain the status of legal dispute and impact on the ownership and if at all, after taking into consideration all these factors, there is a difference between the amount paid by the assessee and the stamp valuation then the same may be referred to the DVO u/s 50C(2) of the Act in accordance with the decision of Calcutta High Court in case of Sunil Kumar Agarwal (supra). 03. The ld. DR on the other hand fairly agreed to the said proposition, however left the final decision to the wisdom of the Bench. 04. After hearing the rival contentions and perusing the materials available on record, we find that the impugned property was not free from certain encumbrances and accordingly, the possession was not handed over. We note that the ownership of the property went into litigation with other tenants living in the property. Now, in our opinion, it would be fair and reasonable if the status of the property is ascertained by the ld. AO after examining the status of the ownership, legal dispute going on, tenants in the property and if there is a deviation in the valuation as per stamp valuation and the price Page | 3 ITA No.387/KOL/2024 Bhawani Apartment Pvt. Ltd; A.Y. 2018-19 paid by the assessee then the matter may be referred to the DVO for valuation and decide the issue afresh after affording reasonable opportunity of hearing to the assessee. 05. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 12.03.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 12.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "