AI Insights
The case involves Shri Abhijit Madhav Kalbhor, who appealed against the order of the National Faceless Appeal Centre (NFAC), which upheld the addition of Rs. 14,47,700 to his income under Section 56(2)(vii)(b) of the Income Tax Act, 1961. This addition was based on the difference between the stamp duty value and the sale consideration of a property co-owned by Kalbhor and another individual. The property was purchased for Rs. 65,00,000, while the stamp duty valuation was Rs. 93,95,400. The Tribunal, after considering the DVO's report which assessed the fair market value at Rs. 1,03,86,900, decided to reduce the addition to Rs. 10,00,000, acknowledging some distressing factors related to the property.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 137283 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-03-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowedPartlyAllowed
Bench Allotted
A
Next Hearing Date
26-03-2023
Assessment Year
2016-2017
Appeal Filed On
29-01-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G.D. PADMAHSHALI, ACCOUNTANT MEMBER ITA No.122/PUN./2023 Assessment Year 2016-2017 Shri Abhijit Madhav Kalbhor, Prayatna Bangla Kawadi Go Prayatna Bangla Kawadi Go, Manjari Farm Loni Kalbhor, Haveli – 412307. Maharashtra. PAN ALKPK3825A vs. The Income Tax Officer, Ward – 14(5), Bodhi Tower, Salsbury Park, Gultekadi, Pune. Maharashtra. Applicant Respondent Assessee by : -None- Revenue by : Shri Ramnath P Murkunde Date of Hearing : 27.03.2023 Date of Pronouncement : 30.03.2023 आदेश / ORDER PER SATBEER SINGH GODARA, JM : This assessee’s appeal for assessment year 2016-17, arises against the National Faceless Appeal Centre [in short the “NFAC”], Delhi’s Din & Order No.ITBA/NFAC/S/250/2022- 23/1047779094(1), dated 02.12.2022, involving proceedings under Section 143(3) of the Income Tax Act, 1961 (in short “the Act”). Case called twice. None appears at assessee’s behest. He is accordingly proceeded ex-parte. 2. We note with the able assistance coming from the Revenue side that the NFAC’s detailed discussion herein has upheld 2 ITA.No.122/PUN./2023 Shri Abhijit Madhav Kalbhor, Haveli, Maharashtra. the Assessing Officer’s action making sec.56(2)(vii)(b) addition of Rs.14,47,700/- as under : “5. GROUNDS OF APPEAL 1. The learned A.O. erred in law and on facts in making addition of Rs.14,47,700/- u/s 56(2)(vii)(b) of I.T. Act, 1961 on account of the difference between Stamp duty Value and sale consideration without appreciating the fact that the land under consideration was having garden reservation. 6. Ground No. 1 : Adjudication and Decision: The property was equally co-owned by the appellant and one Sri. Sujit Ramchandra Kamthe. The scrutiny assessment in the above mentioned two cases were completed for the AY 206- 17 on 28.12.2018. Both the assesses together had purchased an immovable property at Sr No. 35, Chivate, Balewadi, Pune at Rs.65,00,000/-. The stamp duty valuation of the same was of Rs.93,95,400/-. The assessees were having 50% share each in the subject property. On being confronted with the issue of applicability of section 56(2)(vii)(b), both the assessees requested for referring the matter to the valuation officer u/s 50C(2) of the Income Tax Act. Accordingly, the assessment order was passed adding the respective difference amount of Rs. 1447700 (9395400 - 6500000 = 2895400/2 = 1447700) to the 3 ITA.No.122/PUN./2023 Shri Abhijit Madhav Kalbhor, Haveli, Maharashtra. total income of both the assessees, subject to final report by Valuation Officer. The AO vide his submission dated 20th February,2020 informed that the valuation report (copy enclosed) has been received from the Valuation Officer. It is seen from the valuation report received that the FMV of the property has been arrived at Rs.1,03,86,900/- as against the stamp duty value of Rs.9395400. The valuation report received determines the FMV at Rs.1,03,86,900 which is more than the guideline value of Rs.93,95,400 adopted by the AO at the time of assessment. Therefore, the provisions of sub section (3) reproduced herein would apply. Section 50C: (3) Subject to the provisions contained in sub-section (2), where the .value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. In the light of the said report of the DVO, applying the provisions of section of section 50C (3) of the Act reproduced 4 ITA.No.122/PUN./2023 Shri Abhijit Madhav Kalbhor, Haveli, Maharashtra. herein, the addition made in the assessment order adopting the guideline value for stamp duty purposes is confirmed.” 3. Suffice to say, it has come on record that both the learned lower authorities have made the impugned addition based on the DVO’s report only determining the fair market value of the assessee’s capital asset i.e. Plot at sl.no.35, Chivate, Balewadi, Pune having actual consideration of Rs.65 lakhs against the stamp value thereof amounting to Rs.93,95,400/-, as both the lower authorities have restricted the impugned addition only to the extent of the difference between assessee’s abovestated purchase price and stamp value, to the extent of his 50% share, coming to Rs.14,47,700/-. This is what leaves the assessee aggrieved. 4. We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s vehement contentions reiterating their respective stands against and in support of the impugned addition. Suffice to say, we do not see any patent illegality or infirmity in the impugned addition made by both the lower authorities based on the DVO’s valuation. The fact also remains that atleast some distressing factors of land leveling, approach road connectivity, location and co-ownership etc., could not be altogether ruled out in such an instance. Faced with the situation, we deem it appropriate that the impugned addition of Rs.14,47,700/- deserves to be partly upheld to the extent of lump sum figure of Rs.10 lakhs only subject to the condition that the 5 ITA.No.122/PUN./2023 Shri Abhijit Madhav Kalbhor, Haveli, Maharashtra. same shall not be treated as a precedent. We make it clear before parting that we have exercised our second appellate jurisdiction only in peculiar facts and circumstances of the case only. Necessary computation shall follow as per law. Ordered accordingly. 5. This assessee’s appeal is partly allowed in above terms. Order pronounced in the Open Court on 30.03.2023. Sd/- Sd/- (G.D. PADMAHSHALI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 30 th March, 2023 VBP/- Copy of the Order is forwarded to: 1. The Appellant; 2. The Respondent; 3. The NFAC, Delhi 4. 5. 6. The CCIT, Pune The DR ‘A’, ITAT, Pune Guard File //BY ORDER// // True Copy // Senior Private Secretary : ITAT : Pune
