Arghanil Mukhopadhyay, Hooghly V. I.T.O.,Ward-23(2), Hooghly

ITA 2360/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9324 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 25-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYA PAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Reasonable cause; Set aside
• Section: 56(2); 22

Judgement Text

1 I.T.A NO. 2360/KOL/2019 A.Y 2015-16 ARGHANIL MUKHOPADHYAY IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE SHRI P.M. JAGTAP, V.P AND SHRI A.T. VARKER Y, AM ] I.TA NO. 2360/KOL/2019 A.Y 2015-16 ARGHANIL MUKHOPADHYAY PAN: AJXPM 2415M VS. I.T.O., WARD 23(2), HOOGHLY APPELLANT RESPONDENT DATE OF HEARING 22-11-2019 DATE OF PRONOUNCEMENT 10.01.2020 FOR THE APPELLANT SHRI MIRAJ D.SHAH, LD. AR FOR THE RESPONDENT SHRI SUPRIYA PAL, JCIT, LD.DR ORDER PER SHRI A.T. VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF LD. CIT (APPEALS) , 6, KOLKATA DATED 17-12-2018 FOR THE ASSESSMENT YEAR 2015-16. 2. AT THE OUTSET ITSELF, SHRI MIRAJ D.SHAH, LD . AR OF THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE IMPUGNED ORDER IS AN EX PARTE ORDER AND THE REASONS FOR NOT APPEARING BEFORE THE LD. CIT(A) WAS BECAUSE THE ASSESSEE RESI DES IN UNITED STATES OF AMERICA (U.S.A) AND MOTHER OF THE ASSESSEE KEEP VISITING HI M AND STAYS WITH HIM FOR SOME TIME IN U.S.A. IN ORDER TO PROVE THIS FACT THE LD. AR D REW OUR ATTENTION TO THE COPIES OF INDIAN PASSPORT OF ASSESSEE AS WELL AS HIS MOTHER T O SHOW THAT THEY WERE OUT OF INDIA WHILE THE APPEAL WAS FIXED FOR HEARING BEFORE THE L D. CIT(A). AND ALSO FROM THE AFFIDAVIT FILED BY THE ASSESSEES MOTHER, THEY HAD EXPLAINED THE REASON FOR THE CAUSE OF THE DELAY IN FILING THE APPEAL BEFORE THIS TRIBUNAL AND THE ASSESSEE HAS PRAYED TO CONDONE THE DELAY OF 222 DAYS FOR THE INTEREST OF J USTICE. AFTER PERUSAL OF COPIES OF THE RELEVANT PAGES OF THE PASSPORTS OF ASSESSEE AS WELL AS HIS MOTHER, WE NOTE THAT BOTH WERE OUT OF INDIA DURING THE PERIOD WHEN THE APPEAL WAS LISTED FOR HEARING BEFORE THE LD. CIT(A) AND SO THE LD. CIT(A) TAKING NOTE THAT NONE APPEARED BEFORE HIM DURING THE APPELLATE PROCEEDINGS DISMISSED THE APPEAL. HOW EVER, WE WERE INFORMED THAT THE 2 I.T.A NO. 2360/KOL/2019 A.Y 2015-16 ARGHANIL MUKHOPADHYAY IMPUGNED ORDER DISMISSING THE ASSESSEE S APPEAL WA S UN-SERVED TO THE ASSESSEE/ HIS MOTHER; AND THE ASSESSEE GOT THE INFORMATION ONLY AFTER THE ASSESSEES MOTHER CAME BACK FROM U.S.A TO INDIA. IT IS NOTED THAT ONLY AFT ER THE ASSESSEES MOTHER RETURNED FROM USA, SHE CAME TO KNOW ABOUT THE IMPUGNED ORD ER PASSED BY LD. CIT(A) WHICH WAS DELIVERED TO HER HOUSE IN TIME, BUT HER SERVAN T HAD KEPT IT WITH HER NOT UNDERSTANDING WHAT IT IS. AND WHEN THE ASSESSEES M OTHER REALIZED THE SERIOUSNESS OF THE MATTER, THEN IMMEDIATELY WITHOUT WASTING ANY TI ME SHE APPROACHED THE LD.AR AND GAVE HIM THE COPIES OF THE RELEVANT CASE FILE AND I NSTRUCTED HIM TO FILE THE APPEAL BEFORE THE TRIBUNAL AND IN THAT PROCESS DELAY OF 22 2 DAYS HAPPENED, WHICH ACCORDING TO THE LD. AR IS NOT INTENTIONAL ON THE PART OF THE ASSESSEE. SINCE THE DELAY HAPPENED BECAUSE OF THE AFORESAID FACTS, WHICH ACCORDING TO US IS REASONABLE CAUSE, SO WE ARE INCLINED TO CONDONE THE DELAY AND WE DO SO. THUS , WE NOTE THAT IN THE AFORESAID CIRCUMSTANCES THE LD. CIT(A) HAS PASSED THE IMPUGNE D ORDER EX PARTE WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE AND SINCE ASSESS EES MOTHER WAS OUT OF INDIA, NOTICE OF HEARING COULD NOT BE MEANING FULLY SERVED UPON T HEM AND NO EFFECTIVE HEARING COULD HAVE TAKEN PLACE BEFORE THE LD. CIT(A) AND SINCE TH E ASSESSEE WAS IN THE DARK ABOUT THE APPEAL PROCEEDINGS/HEARING FIXED BEFORE THE LD. CIT(A), THERE IS EX-FACIE VIOLATION OF NATURAL JUSTICES. HOWEVER, THE MAIN GRIEVANCE OF THE ASSESSEE WHICH HE HAD PLEADED IN HIS TYPICAL COLLOQUIAL ENGLISH/SLANG BEFORE THE AO DURING ASSESSMENT PROCEEDINGS WAS AGAINST THE PROPOSED ACTION OF INVOKING SECTI ON 56(2) (VII) (B) (II) OF THE INCOME- TAX ACT, 1961 ( IN SHORT, THE ACT ) IN RESPECT OF AN IMMOVABLE COMMERCIAL PROPERTY PURCHASED BY THE ASSESSEE. SINCE ACCORDING TO AO, T HE IMMOVABLE PROPERTY WAS PURCHASED BY THE ASSESSEE FOR A CONSIDERATION LESS THAN THE STAMP DUTY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUP EES HE SHOW CAUSED ASSESSEE AS TO WHY HE SHOULD NOT TAX THE DIFFERENCE BY INVOKING S EC. 56(2)(VII)(B)(II) OF THE ACT. THE AO IN THE ASSESSMENT ORDER NOTES THAT THE ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS. 42,96,000/-. HOWEVER, SI NCE THE MARKET VALUE OF THE PROPERTY AS PER STAMP VALUATION AUTHORITY AMOUNTED TO RS. 95 ,70,250/-, THE AO ASKED THE ASSESSEE AS TO WHY SEC 56(2)(VII) (B)(II) SHOULD NOT BE INVOKED AND TH E DIFFERENCE IN CONSIDERATION IS ASSESSED AS INCOME IN THE ASSESSE ES HAND I.E RS. 95,70,250 RS. 42,96,000= RS. 52,74,250/-. THEREAFTER IN THE ASSESSMENT ORDER, THE AO REPROD UCES THE ASSESSEES REPLY WHICH WAS NOT ACCEPTED BY THE AO; AND THEN THE AO ASKED THE 3 I.T.A NO. 2360/KOL/2019 A.Y 2015-16 ARGHANIL MUKHOPADHYAY ASSESSEE TO GIVE HIS CONSENT TO REFER THE ISSUE OF VALUATION OF THE IMMOVABLE PROPERTY TO THE DVO, HOWEVER, SINCE ASSESSEE DID NOT REVERT BACK TO HIM FOR REFERENCE THE ISSUE TO DVO, THE AO ADDED RS. 52,74,250/- TO THE TOTAL I NCOME OF THE ASSESSEE ACCORDING TO LD.AR , THE ASSESSEE HAD PURCHASED THE IMMOVABL E PROPERTY ONLY FOR RS.42,96,000/- WHEREAS THE MARKET VALUE OF THE PROPERTY AS PER STA MP VALUATION AUTHORITY WAS AT RS.95,70,250/-. SO ACCORDING TO LD.AR THOUGH THE AO UNDERSTOOD, THAT THE ASSESSEE WAS CONTESTING THE VALUATION OF THE PROPERTY IN QUE STION AND IN THAT CONTEXT IT CAN BE VERY WELL INFERRED THAT THE ASSESSEE WANTED TO REFE R THE ISSUE OF MARKET VALUE OF THE IMMOVABLE PROPERTY TO THE DISTRICT VALUATION OFFICE R, HOWEVER, DID NOT DO SO, ON THE SPECIOUS PLEA THAT ASSESSEE DID NOT GIVE CONSENT TO HIS LETTER PROPOSING REFERRING THE ISSUE TO DVO DT. 30-10-2017, WHICH ACTION OF AO, CA NNOT BE COUNTENANCED BY US. WE NOTE THAT THE ASSESSEE FROM THE INCEPTION HAS BEEN CONTESTING THE AOS DESIRE TO INVOKE SECTION 56(2)(VII)(B)(II) OF THE ACT IN RESP ECT OF THE IMMOVABLE PROPERTY, SO HE PLEADED THAT HE PURCHASED THE PROPERTY ONLY FOR RS. 42,96,000/-, AND NOT AT THE VALUE AS DETERMINED BY THE STAMP VALUATION AUTHORITY. SO IN ALL FAIRNESS THE AO OUGHT TO HAVE REFERRED THIS ISSUE TO THE DVO AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF CIT VS. SUNIL AGGARWAL 372 ITR 83(CAL) THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE L D. CIT(A) AND REMAND THE ISSUE BACK TO THE FILE OF THE AO FOR DENOVO ADJUDICATION OF THIS ISSUE WITH A DIRECTION TO HIM TO REFER THE VALUATION OF THE IMMOVABLE PROPERTY PU RCHASED BY THE ASSESSEE TO THE DVO AND TO ADJUDICATE THE ISSUE DE NOVO AFTER GETTING THE REPORT FROM DVO AND AFTER HEARING THE ASSESSEE IN ACCORDANCE TO LAW. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 10TH JANUARY, 2020 SD/- SD/- P.M. JAGTAP A.T. VARKEY VICE PRESIDENT (KZ) JUDICIAL MEMBE R DATED 10 -01-2020 PP(SR.P.S.) 4 I.T.A NO. 2360/KOL/2019 A.Y 2015-16 ARGHANIL MUKHOPADHYAY COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: SHRI ARGHANIL MUKHOPADHYAY 22 /1/C JANNAGAR ROAD, SERAMPORE, HOOGHLY-712201. W.B. 2 RESPONDENT/REVENUE: THE I.T.O., WARD 23(2), HOOGHLY , AAYKAR BHAWAN, KHADINAMORE, G.T ROAD, CHINSURAH, HOOGHLY-712101. 3. CIT, 4. CIT(A), KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY BY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA