HEMAL SHAMJI SOLANKI, DIU V. ITO WD 4, JND VERAVAL, VERAVAL

ITA 386/RJT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5749 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-07-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 08-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR GUPTA
• Keywords: Opportunity of being heard; Fair market value
• Section: 68; 69; 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 386/RJT/2023 (Assessment Year: 2015-16) (Hybrid Hearing) Hemal Shamji Solanki, 01, LBS Road, House No. 1503, Ghochla (DIU), 362540 Vs. The ITO, Wd-4, JND Veraval Veraval èथायीलेखासं./जीआइआरसं./PAN/GIR No.: BBWPS7227M (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरतीकȧओरसे/Assessee by : Shri Kalpesh Doshi, AR राजèवकȧओरसे/Revenue by : Shri Dheeraj Kumar Gupta, Sr. DR स ु नवाईकȧतारȣख/ Date of Hearing : 09/07/2024 घोषणाकȧतारȣख/Date of Pronouncement : 19/07/2024 आदेश/ORDER PER DINESH MOHAN SINHA, JM: Captioned appeal filed by the Assessee A.Y. 2015-16, is directed against the order passed by the National Faceless Appeal Centre, Delhi, (in short ‘the NFAC, Delhi’), dated 21.09.2023 under section 250 of the Income Tax Act, 1961 (in short, ‘the Act’). I.T.A No. 386/Rjt/2023 A.Y. 2015-16 Hemal Shamji Solanki vs. ITO 2 2. The Grounds of appeal raised by the assessee are as follows: “1. That, the Ld. CIT(A) has wrongly passed the order without providing proper opportunity of being heard. 2. That, the Ld. CIT(A) has wrongly confirmed addition of Rs. 24,61,734/- u/s 56(2)(vii) of the act. 3. The, Ld. DVO has wrongly determined the right in terrace at Rs. 43,33,000/- without appreciating comparative instances. 4. The Ld. the Ld. CIT(A) has wrongly confirmed addition of Rs. 6,25,000/- on account of unaccounted payment u/s 69 of the Act. 5. The Ld. the Ld. CIT(A) has wrongly confirmed addition of Rs. 1,75,000/- on account of unexplained income u/s 68 of the Act. 6. That, the Ld. CIT(A) has wrongly confirmed the application of provisions of section 115BBE of the I.T. Act when the provision of section 115BBE are not applicable. 7. That, the Ld. CIT(A) has wrongly confirmed initiated penalty proceeding u/s 271(1)(c) of the 1.T. Act, 1961. 8. That, the findings of the Ld. CIT(A) has are not justified and are bad-in-law. 9. The appellant craves to add, amend, alter or delete any of the above grounds of appeal. 3. The appellant is an individual and working as a partner under the firm namely Varun Dev Ice & Cold Storage. During the year under consideration, the appellant has filed the return of income declaring total income of Rs 2,11,550/-. During the year under consideration the appellant with other three co-owners has purchased a FSI right in the terrace of the building at survey no. 351/1 paiki, near Bus station, Una. For the consideration of Rs 25,00,000/-, the appellant's share in the property is 1/4th and has made payment of Rs. 6,25,000/- towards the purchase consideration (1/4th of Rs 25,00,000/-). During the course of assessment proceedings the appellant has I.T.A No. 386/Rjt/2023 A.Y. 2015-16 Hemal Shamji Solanki vs. ITO 3 duly furnished various documents such as bank statements, copy of purchase deed, explanation pertaining to the source of investment, all relevant accounts and computation. However, the Ld. AO has wrongly determined the value of the property at Rs. 1,23,46,939/- and the Ld. AO has wrongly made the addition of Rs 24,61,734/- ((1,23,46,939 25,00,000)/4) to the income of the appellant. It is further stated that the valuation was referred to DVO for the valuation of the right in the terrace the Ld. DVO has forwarded a report dated 03/01/2019 wherein the fair market value of the said property is determined at Rs 43,30,000/-. It is also further stated that the DVO has arrived at the valuation on the basis of comparative instances and as per such comparative instances the value recorded by the appellant is quite fair and reasonable. The case has been selected for the limited scrutiny and the order u/s 143(3) has been passed by making addition of Rs. 32,61,736/- The AO has failed to appreciate the facts and wrongly made addition of Rs 32,61,736/- on various grounds without affording proper opportunity of being heard. The Ld. CIT(A) has wrongly confirmed the addition of Rs. 32,61,736/- without affording opportunity and without appreciating facts and legal provisions. The Ld. Valuation Officer has not applied the correct valuation method It is further stated that the Ld. AO has wrongly made further addition of Rs. 6,25,000/- on account of unaccounted payment u/s 69 r.ws 115BBE of the Act. Total income of the assessee is determined as under: Total Income as per return -Rs. 211554/- Add: As per para 5 -Rs. 2461734/- As per para 6 -Rs. 625000/- As per para 7 -Rs. 175000/- I.T.A No. 386/Rjt/2023 A.Y. 2015-16 Hemal Shamji Solanki vs. ITO 4 Total assessed income Rs.3473288/- 4. Against the order passed by A.O. vide order dated 05-12-2017, the assessee filed appeal before ld. CIT(A) and the ld. CIT(A) disposed off the appeal by observing as under:- “6.2 The matter has been considered. The order u/s 143(3) filed with Form 35 along with statement of facts and grounds of appeal have been carefully examined Vide the hearing notices the appellant was asked to furnish submissions in support of the grounds of appeal filed by him. However, despite the requests, the same have not been filed by the appellant till date despite three notices over a span of more than two years. In view of the same, there is no reason available on record for any change in the order of the AO as during the appellate proceedings no response was furnished by the appellant before the Appellate Authority to any of the notices served on it. In view of all of the above the order u/s 143(3) of the AO is confirmed Accordingly, all the grounds of appeal are dismissed. 7. In the result, the appeal of the appellant is dismissed.” 5. The Ld. A.R. of the assessee submitted that this is an ex-parte order of ld. CIT(A) vide order dated 21-09-2023. No notice served on the assessee. Even no notice shown on the designated website of the Income Tax Department. The assessee was outside the country hence could not follow up the appeal. The A.R. of the assessee prayed that one more opportunity is to be granted to the assessee complying with the notices before the ld. CIT(A). 6. The ld. D.R. submitted that three notices dated 05-01-2021, 30-08-2023 and 11-08-2023 were issued to the assessee but the assessee has not filed any response. No submission was filed in support of the grounds of appeal and the ld. D.R. further relied upon the order of the ld. CIT(A). I.T.A No. 386/Rjt/2023 A.Y. 2015-16 Hemal Shamji Solanki vs. ITO 5 7. We have heard the matter and perused all the relevant materials available on record. We noticed that the notices have been issued but the order of the ld. CIT(A) dated 21-09-2023 is silent on the service of notices. We are of the view that one more opportunity be given to the assessee to present this case before ld. AO. Therefore, the matter is restored back to the file of AO to adjudicate the matter according to law after affording due opportunity of being heard to the assessee. 7. In the result, the appeal of the assessee is treated to be allowed for statistical purposes. Order pronounced in the open court on 19-07-2024 Sd/- Sd/- (A. L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot Dated: 19/07/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Rajkot 6. Guard file. By order/आदेश से, Assistant Registrar ITAT, Rajkot