DEVANSH SANJAY BANSAL,SURAT V. .NFAC, DELHI

ITA 3/SRT/2024

AI Insights

The case involves Devansh Sanjay Bansal, who appealed against the order of the National Faceless Appeal Centre (NFAC) confirming an addition of Rs. 18,65,580 to his income for the assessment year 2020-21. This addition was based on the difference between the sale consideration of a property he purchased and its stamp duty valuation. The Assessing Officer initially noted a substantial difference between the sale consideration and the stamp duty valuation, leading to a show cause notice. The DVO's valuation, which was lower than the stamp duty valuation but higher than the purchase price, was contested by the assessee, citing various defects and issues with the property. The CIT(A) and subsequently the Tribunal found the DVO's valuation reasonable and upheld the addition to the income.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106863 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: Hemaben Baratbhai Desai vs. ITO ITA No.3204/Ahd/2016, Vikash Bharatbhai Desai vs. ITO ITA No.89/Srt/2019, Shri Mahesh Naginbhai Patel vs. ITO ITA No.1070/Ahd/2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MINAL KAMBLE
• Assessee Lawyers: TUSHAR P. HEMANI; PARIMALSINH B PARMAR; ISSUING SHOW CAUSE NOTICE DATED
• Keywords: Difference of opinion; Additional evidence; Fair market value; Valuation report
• Section: 56(2); 6; 10; 2

Judgement Text

"आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT “SMC” BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER आ.अ.सं./ITA No.3/SRT/2024 (AY 2020-21) (Hybrid hearing) Devansh Sanjay Bansal 304, Trinity Orion Vesu, Abhva, Barthana, B.O. Umra, Surat-395 007 [PAN No: CLAPB 3180 P] बनाम Vs ITO, Ward-1(1)(1), Surat, Aayakar Bhawan, Majura Gate, Surat अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Tushar P. Hemani, Sr. Advocate & Shri Parimalsinh B Parmar, Advocate राजˢ की ओर से /Revenue by Shri Minal Kamble, Sr-DR अपील पंजीकरण/Appeal instituted on 02.01.2024 सुनवाई की तारीख/Date of hearing 20.12.2024 उद ्घोषणा की तारीख/Date of pronouncement 27.12.2024 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 National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 30.11.2023 for assessment year 2020-21, which in turn arises out of assessment order passed by the Assessment Unit, Income Tax Department/Assessing Officer under section 144(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 08.09.2022. The assessee has raised the following grounds of appeal:- “((I) Addition on account of income from other source u/s 56(2) of the Act amounting to Rs.18,65,580/-:- (1) The Ld. CIT(A), NFAC, erred in confirming the addition on account of income from other source u/s 56(2)(x) of the Act for Rs.18,65,580/- without considering the facts and circumstances of the land. (2) The Ld. CIT(A), NFAC, did not appreciated the peculiar facts that there is no any additional evidences and the value of the land depends on ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 2 various circumstances as well allocation and condition of the land and hence, the addition made is required to be deleted. (3) On the basis of facts and circumstances of the case and as per law, the Ld. Ld. CIT(A), NFAC, was not justified in confirming the aforementioned addition u/s 56(2)(x) of the Act and required to be deleted. (II) Miscellaneous:- (1) The Ld.CIT[A], NFAC, erred in law and on facts in levying interest u/s 234A/B/C/D of the Act. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 2. Brief facts of the case are that assessee is an individual, filed his return of income for assessment year 2020-21 on 30.11.2020 declaring income of Rs.22,58,940/-. The case was selected for scrutiny. During assessment, Assessing Officer noted that he has information in his record that assessee has purchased a property during relevant financial year i.e., 2019-20 on 23.08.2019 and has shown sale consideration at Rs.20,25,000/-. The Stamp Valuation Authority determined the value of said land for the purpose of registration of transaction at Rs.1.01 crores. Thus, there was a difference of Rs.81,42,863/- vis-à-vis the sale consideration shown by assesse and the value determined by Stamp Valuation Authority. The Assessing Officer asked the assessee to explain as to why difference of Rs.81,42,863/- should not be added to the income of assessee by issuing show cause notice dated 21.03.2022. The assessee filed his reply on 25.03.2022 and objected against the proposed addition. The assessee made a request to send the matter before District Valuation Officer for estimation of fair market value of land. The District Valuation Officer furnished the report and estimated the value of land at Rs.38,90,580/- vide report dated 16.06.2022. On receipt of report of District Valuation Officer, the Assessing Officer again issued show cause ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 3 notice to assessee as to why the value estimated by District Valuation Officer be not accepted and difference of Rs.18,65,580/- be added to the income of assessee. In response to show cause notice, assessee filed his reply on 05.08.202. In the reply, assessee submitted that he has purchased land situated in Revenue Survey No. 391, Block No.420 and Survey No.394/1, Block No.424, situated at Village Lajpore, Taluka Choryasi, District-Surat. There are various defects, deficiencies, pitfalls in the land due to which market value of land was much lower than the jantry rate. The jantry rate are normally for the best located and best condition property. The land was owned by Muslim family and majority of them are residing in Africa and no one were available to take care of said land, so it was illegally occupied. The illegal occupants are also disputing title of the land. The land is situated near Muslim cemetery (graveyard) and overhead high-tension electricity line passing through the property. Greek is also passing through north side of the property, due to which some other portion of land is to be left and cannot be used for development activities. The assessee stated that it would be injustice to the assessee, if the value is considered at Rs.38,90,580/- as estimated by District Valuation Officer. The assessee requested to accept the value at Rs.20,25,000/- as per sale deed. The reply of assessee was not accepted by Assessing Officer by referring in the provisions of section 56(2)(x)(b) and held that if the consideration paid for purchasing property is less than the stamp value of the property by an amount exceeding Rs, 50,000/-, stamp valuation of such property is exceeds such consideration shall be chargeable under the head “income from other sources”. In the present case, there is ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 4 difference of Rs.18,65,540/-. Thus, such difference was added to the income of assessee. Aggrieved by the addition in the assessment order, assessee filed appeal before Ld.CIT(A). 3. Before Ld. CIT(A) the assessee reiterated similar submission as made before Assessing Officer. In addition, the assessee submitted that land was having various defects, deficiencies and pitfalls, hence purchase value was lower than the jantry rate. The matter was referred to District Valuation Officer. Before District Valuation Officer, assesse also furnished his valuation report. The assessee also furnished copy of valuation report pointing out various defects. The purchase value of assessee is duly supported by the Government Approved Valuer. The assessee specifically mentioned various defects in the impugned land and stated that District Valuation Officer while estimating value has not considered the various defects in the impugned land and value adopted by District Valuation Office is on higher side. The assessee made prayer to accept Government Approved Valuer report on the ground that it is more fair and reasonable. The assessee specifically stated that District Valuation Officer estimated value @ Rs.1055/- per square meter and Government Approved Register adopted @ Rs.550/- per square meter. In alternative submission, assessee stated that average of value adopted by District Valuation Officer as well as Government Approved Valuer should be considered which would be fair for both the sides. To support his submission, assessee relied upon the decisions of Surat Bench and Ahmedabad Benches of Tribunal. ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 5 4. The Ld. CIT(A) on considering the submission of assessee held that District Valuation Officer has estimated the property at Rs.38,90,580/- whereas Stamp Valuation Officer valued at Rs.1.01 crore. The value estimated by District Valuation Officer is still 40% of value determined by Stamp Valuation Authority. The District Valuation Officer considered the value after considering the defect in the property and which seems to be justified. The assessee has furnished valuation report of Government Approved Valuer and such report was obtained by assessee on 04.04.2022 i.e., before passing the assessment order and such report was not furnished before Assessing Officer filing such report is an additional evidence. No application for additional evidence was filed by assessee in assessment proceedings. Thus, the valuation report filed by assessee was not entertained and considered by Ld.CIT(A). The case law relied upon by assessee was distinguished by Ld.CIT(A) in para-5.5 of his order. The Ld. CIT(A), thus, sustained the addition made by Assessing Officer. Further, aggrieved assessee has filed present appeal before Tribunal. 5. I have heard the submission of Shri Tushar P. Hemani, Ld. Senior Advocate (hereinafter referred as “Ld. Senior Counsel”) assisted by Shri Parimalsinh B Parmar, Ld. Advocate for the assessee and Ld. Senior Departmental Representative (hereinafter referred as “Ld. Sr-DR) for the Revenue. The Ld. Senior Counsel, first of all, stated that he has a limited prayer before the Bench that (i) the Ld.CIT(A) not considered the report of Government Approved Valuer, which contained all factors effecting the market value of the land. And neither the Assessing Officer has discussed such Government ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 6 Approved Valuer nor District Valuation Officer has given his difference of opinion on the report of Government Approved Valuer. The value suggested by District Valuation Officer as well as determined by Stamp Valuation Officer on the basis of jantry rate are all estimation. There are several facts are affecting the actual and real value of the impugned land. The jantry rate and the value estimated by District Valuation Officer are not absolute. In (ii) submission, Ld. Senior Counsel for the assessee submits that it is an admitted fact that the impugned land has several defects, which is otherwise recorded by District Valuation Officer that high tension line is passing through the property which is adversely affected the value of impugned land. The District Valuation Officer in his report has referred the position of property on the date of his inspection by that time, assessee has made several improvements and brought the property in good condition. The impugned land is just adjacent to a graveyard and creek. This Bench in a series of decisions, has directed to adopt average value between value suggested by District Valuation Office and value suggested by Government Approved Valuer. In his case, the District Valuation Officer has suggested @ 1055 per square meter, however, the Government Approved Valuer has suggested the rate @ 550/- per square meter. The Ld. Senior Counsel of the assessee submits that to avoid the litigation, he prays that if the average of both the values are considered, the assessee would left with be no grievance. Though the assessee has not paid any amount in excess the actual sale consideration shown on the sale deed. As there were various defects in the impugned land, which has been otherwise recorded by District Valuation Officer as well as by ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 7 Government Approved Valuer, thus, the consideration of sale was negotiated and finalised by taking in to consideration of all such factors. To support his submission, Ld. Senior Counsel of the assessee relied upon following decisions:  Hemaben Baratbhai Desai vs. ITO ITA No.3204/Ahd/2016 dated 21.02.2019  Vikash Bharatbhai Desai vs. ITO ITA No.89/Srt/2019dated 03.05.2019  Shri Mahesh Naginbhai Patel vs. ITO ITA No.1070/Ahd/2017dated 18.07.2019 6. On the other hand, Ld. Sr-DR for the Revenue though supported the order of lower authorities. The Ld. Sr-DR for the Revenue submits that assessee has shown sale consideration of impugned property at Rs.20,25,000/-, however, the Stamp Valuation Authority determined the value of impugned land at Rs.1.01 crore, which is five times higher, of the sale consideration. In other words, the assessee has shown just 1/5th of sale consideration compared to jantri rate of the impugned land. The District Valuation Officer has already considered all the factors effecting the market value of land and has reasonably estimated the value of Rs.38,90,580/-, which is also about 40% of the jantri value. The Ld. Sr-DR for the Revenue submits that on the basis of report of District Valuation Officer, the value of impugned property is already reduced more than 60%. On the ratio of various case law relied by Ld. Senior Counsel of the assessee are distinguishable on facts in all these cases. There is no such variation in the value determined by District Valuation Office as well as Stamp Valuation Officer, in the present case there is 1/5 of sale ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 8 consideration to the actual value of land, thus, rigours of Section 56(2)(x)(b) is clearly applicable and the assessee does not deserve any further relief. 7. I have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated the case law relied on by Ld. Senior Counsel of the assessee. I find that during relevant financial year, the assessee has purchased a property out of Revenue Survey Number (R.S. No.) 391, Block No. 420 and R.S. No. 391/4, Block No. 424, total admeasuring 3687.75 square meter. The assessee has shown sale consideration at Rs.20,25,000/-. The assessee has shown sale consideration @ Rs. 549/- per square meter. The Stamp Valuation Authority (SVA) determined the value of said land for the purpose of registration of transaction at Rs.1.01 crores. SVA determined the value of land @ Rs. 2,757/- per square meter on the basis of jantri value determined by State Government. Thus, there was a difference of Rs.81,42,863/- vis-à-vis the sale consideration shown by assesse and the value determined by Stamp Valuation Authority. During assessment, on the request of assessee the matter was referred to DVO for estimation of fair market value of the property. The DVO estimated the value of land at Rs.38,90,580/-, i.e. @ Rs. 1055/- per square meter, vide report dated 16.06.2022. First and main submissions of ld Senior Counsel of assessee is that neither the DVO considered his objection while estimating the value of land nor Assessing Officer looked into it while finalising assessment. I have perused the contents of report of DVO as well as report of Government Registered valuer {though ld CIT(A) in his observation noted that such report was obtained ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 9 subsequently}. On careful perusal of report of DVO, I find that he has considered all such factors effecting the value of impugned land. I find that in para 5.7 of report of DVO, he has clearly mentioned about the description of land as provided by the assessee. The DVO has also mentioned three comparable stances of nearby land, ranging from Rs. 1412/- to Rs. 1629/- per square meter, still, instead of taking average of three comparable, he has estimated rate of land at Rs. 1055/- per square meter. On perusal of report of Government registered valuer, I find that he has mainly given the reasoning in his report about R.S. no. 420 & 424, which are merged together at site but different jantri rate is determined. Rate of Block No. 420 is Rs. 2750/- per square meter and for Block No. 424 is Rs. 3,000/- per square meter. As per his opinion, such rates are not scientific, so he estimated value of land at Rs. 500/- per square meter. No basis is discussed in his report for arriving at such estimation @ Rs. 500/- per square meter. After giving thoughtful consideration on overall facts of the case, I find that DVO has already considered all the factors effecting the value of land and reasonably estimated the value of land and no further relaxation is required as the value estimated by his is almost 60% less than the jantri value of the land in question. 8. So far as reliance on various case laws are concern, I find that the ratio of all such decisions are also not helpful to the assessee. In all such cases the average of rate estimated by DVO and rate of registered valuer was directed, as the comparable instances considered were either not of same location or there was minor difference in their rates. Moreover, rate in question in all ITA No.3/SRT/2024 (A.Y 20-21) Devansh S. Bansal 10 cases were that of 01.04.1981. However, in the present case the DVO has already estimated at more than reasonable basis by considering all the factors, effecting the value of the land. In the result, the grounds of appeal raised by the assessee are dismissed. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in open court on 27th December, 2024. Sd/- (PAWAN SINGH) [Ɋाियक सद˟ JUDICIAL MEMBER] सूरत /Surat, Dated: 27/12/2024 Dkp Outsourcing Sr.P.S आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "