SHRI ABDUL GAFFAR SHAIKH CHAND, AKOLA V. PRINCIPAL COMMISSIONER OF INCOME TAX-1, NAGPUR

ITA 23/NAG/2021

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5225 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-09-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 04-04-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 263; 143(3); 50C

Judgement Text

।आयकर अपीलीय अिधकरण Ɋायपीठ नागपुर मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH : : NAGPUR [VIRTUAL HEARING AT PUNE] BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.23/NAG/2021 िनधाᭅरण वषᭅ / Assessment Year :2015-16 Shri Abdul Gaffar Shaikh Chand, Mohammad Ali Road, Phulary Galli, Akola - 440002. PAN: AVXPS7253H Vs The Principal Commissioner of Income Tax, Nagpur – 1. Appellant/ Assessee Respondent/Revenue Assessee by None Revenue by Shri Kailash G. Kanojiya – Sr.DR Date of hearing 21/09/2023 Date of pronouncement 21/11/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee against the order of ld.Principal Commissioner of Income Tax, Nagpur-1 dated 12.02.2021 for A.Y.2015-16 passed under section 263 of the Income Tax Act, 1961 emanating from assessment order under ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 2 section 143(3) of the Act, dated 28.09.2017. The grounds of appeal filed by the Assesseeare as under : “1] Assessment order passed by learned A.O. after considering all the facts was neither erroneous nor prejudicial to the interest of revenue and hence learned C.I.T. has no jurisdiction U/s.263 of I.T.Act, 1961 to revise the order. Thus the impugned order of C.I.T. U/s.263 is without jurisdiction and is liable to be cancelled. 2] Learned C.I.T. failed to see that all the issues raised by him in 263 Notice were already inquired by A.O. in great detail with supporting documents and submissions filed by Assessee before A.O. and the A.O. after applying his mind had accepted the same. All these aspects were reiterated by Assessee in his reply before C.I.T. Inspite of this written submission and material on record, the observation of C.I.T. that A.O. had not made any inquiry or verification is seriously erroneous bordering falsity. 3] Only issue was whether the A.O. passed the assessment after proper inquiry on issues referred to in 263 Notice or not. Thus the case laws cited in the impugned order to the effect that if no inquiry is made before passing the order, the same can be considered as erroneous has no relevance at all. 4] Assessee craves leave to urge additional grounds and refer to the documents and record as may be necessary at the time of hearing of appeal.” 2. At the time of hearing, no one appeared on behalf of the assessee. No adjournment was filed on behalf of assessee. Therefore, we heard ld.Departmental Representative(ld.DR) for the Revenue and perused the records. On perusal of the record, it is observed that earlier the case was adjourned at the request of assessee’s Authorized Representative, Adv. S.C.Thakar on 27.10.2021 and 02.07.2022. The Vakalatnama filed by assessee ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 3 is on record. Thus, sufficient opportunity had been granted to the assessee. 3. We have heard ld.DR and perused the records. Findings and Analysis: 4. In this case, assessee had purchased a property jointly with someone for Rs.18,00,000/-. The value of the property as per the Stamp Duty Valuation Authority was Rs.31,05,000/-. The Assessing Officer(AO) during scrutiny proceedings had not verified applicability of section 56(2)(vii). Assessing Officer has merely accepted the returned income vide order under section 143(3) dated 28.09.2017 for A.Y. 2015-16. The ld.Principal Commissioner of Income Tax, on perusal of the assessment record noted these facts. The ld.Pr.CIT issued notice under section 263 of the Act to the assessee. The assessee submitted before ld.Pr.CIT that assessee had filed a valuation report during the assessment proceedings showing the value of property at Rs.18,32,000/-. The assessee claimed before the Pr.CIT that the AO on the basis of said Valuation Report, accepted the transaction. However, ld.Pr.CIT passed an order under section 263 of the Act after considering the reply of the assessee. ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 4 4.1 In this case, it is an admitted fact that assessee had purchased the property along with some person for Rs.18,00,000/-. The value of the said property as determined by Stamp Duty Authority was Rs.31,05,000/-. The assessee has not produced any evidence before us to demonstrate that the Assessing Officer had carried out any enquiry regarding purchase of the impugned property by the assessee. The assessment order is silent on the issue. The section 56(2)(vii) is reproduced here as under : “56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :—" (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,— (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; 8 [(b) any immovable property,— (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 5 thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property; (c) any property, other than immovable property,— (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; (ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration : Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections : 4.2 Thus, as per section 56(2)(vii), it was mandatory for the AO to add the difference between the actual value and Stamp Duty Value or refer the issue to Departmental Valuation Officer (DVO). In this case, AO has neither made any addition nor referred the issue to DVO. Therefore, we agree with ld.Pr.CIT that the assessment order is erroneous and prejudicial to the ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 6 interest of the Revenue, as the AO has erred in not considering the statutory provision. Therefore, the order under section 263 is upheld. In this case, the assessee had relied on a Valuation Report prepared by some valuer however the assessee had not filed any copy of the said report before us. The assessee has not filed any document before us to demonstrate that the AO had carried out any inquiry on this issue. However, as per provisions of the Act, the Valuation Report prepared by DVO is only valid. Therefore, the Valuation Report submitted by assessee is of no significance, for the purpose of section 56(2)(vii) of the Act. Accordingly, grounds of appeal raised by the assessee are dismissed. 5. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 21 st November, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 21 st November, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. ITA No.23/NAG/2021 Shri Abdul Gaffar Shaikh Chand [A] 7 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, नागपुर बᱶच, नागपुर/ DR, ITAT, Bench, Nagpur. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.