SHRI PRASAD ANANT DESAI, MUMBAI V. ITO, WARD 28(2)(4), MUMBAI

ITA 5163/MUM/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5528 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 06-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AIRIJU JAIKIRAN
• Keywords: Fair market value; Set aside
• Section: 43CA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL “SMC” Bench, Mumbai Shri Shamim Yahya (AM) I.T.A. No. 5163/Mum/2019 (Assessment Year 2014-15) Shri Prasad Anant Desai D-611, Sambhaji Raje Market, Sector-19, Turbhe, Navi Mumbai 400 705. PAN : AEAPD3769H Vs. ITO, Ward-28(2)(4) 3 rd Floor, Tower No. 6, Vashi Railway Station Complex Vahi, Navi Mumbai 400 705. (Appellant) (Respondent) Assessee by Shri Ketan VAjani Department by Shri Airiju Jaikiran Date of Hearing 20.10.2021 Date of Pronouncement 27.12 .2021 O R D E R This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 10.06.2019 pertains to A.Y. 2014-15. 2. The grounds of appeal read as under :- 1. On the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals), hereinafter referred to as the "CIT (A)", has erred in confirming the addition of Rs. 4,70,000/- made u/s. 43CA of the Income-tax Act, 1961 2. The CIT (A) has failed to appreciate that the assessing officer has not referred the matter to the Valuation Officer as required under the provisions of section 43CA of the Act and accordingly the addition made is not in accordance with law. 3. The CIT (A) has failed to appreciate that the difference between the actual consideration and the value adopted for stamp duty purpose is not material and therefore the addition made u/s. 43CA is uncalled for. 4. In view of the above, the appellant prays that the impugned addition shall be please be deleted and the order of the assessing officer on this point shall please be set-a-side. Shri Prasad Anant Desai 2 3. Brief facts are that in this case assessee sold a property at value less than that adopted by stamp duty authority. Against the market value as per stamp duty authority at Rs. 31,70,000/-, the property was sold at Rs. 27,00,000/- resulting in difference of Rs. 4,70,000/-. In reply to the show cause as to why not 43CA provision is applied, before AO assessee submitted as under: "During to the market scenario and the lack of demand in the area, disposing the stock is of immerse importance. Hence, the value is lower than the market (stamp duty value) at which the agreement is registered. The difference is around 10% which is meager when the stock of fiat needs to be disposed off and get the funds released." After considering the submission of the assessee it was held by AO that section 43CA is attracted in this case and accordingly added Rs. 4,70,000/- to the income of the assessee. 4. Upon assessee’s appeal learned CIT(A) held as under :- In the only ground of appeal it has been stated that AO has erred in making addition u/s. 43CA and alternatively the property should have been referred for valuation. During appellate proceedings also appellant has contended that AO did not refer the matter to Departmental Valuation Officer and the differential amount is meagre. Reliance has been placed on certain case laws. None of the judgments relied upon for referring the matter for valuation pertain to jurisdictional Tribunal i.e. ITAT, Mumbai. In view of the facts of the case and there being clear difference in value declared and value as per stamp duty authority there was no reason for AO to refer the case for valuation. The difference is about 17.41% of the declared value. It cannot be said that the difference is of meagre amount. In the case laws relied upon by the appellant the difference is much less and the facts are different. Thus in my opinion the AO has rightly added the difference amount as income u/s.43CA of the I.T. Act, 1961. Accordingly the addition is confirmed and the ground of appeal is 'Dismissed. 5. Against this order assessee is in appeal before the ITAT. 6. I have heard both the parties and perused the records. Learned Counsel of the assessee made following submissions :- “With reference to the above, we are attaching herewith the following decisions of the Hon. Tribunal which were referred to during the hearing today : Shri Prasad Anant Desai 3 1. ITO Vs. Aditya Narayan Verma (HUF) (2017) 187 TTJ 476 (Del.) 2. Asst. CIT Vs. Tarun Agarwal (2018) 97 taxmann.com 346 (Agra Trib.) We submit that Hon. Tribunals in both these cases have taken the view that in a case where the assessee has disputed the stamp duty valuation to be the Fair Market Value, the AO is duty bound to refer the matter to DVO. Further the Tribunals have also held that the department cannot be allowed a second inning by sending the matter back to the assessing officer, enabling it to fill the lacunae and shortcomings and putting the assessee to virtually a fresh trial. We would specifically to draw the attention on paragraph 4.1 of the decision of the Delhi Bench of the Tribunal and paragraph 26 of the decision of the Agra Bench of the Tribunal. We also submit that the Hon. Agra bench of the Tribunal has relied upon the judgment of the Hon. Supreme Court in the case of Parshuram Pottery Works Co. Ltd. Vs. ITO (1977) 106ITR I (SC) where the Supreme Court has emphasised on point of finality for the legal proceedings. Paragraph 23 of the decision has reproduced the relevant observations of the judgment of the Supreme Court.” 7. Per contra learned Departmental Representative relied upon the orders of the authorities below. 8. Upon careful consideration, I note that despite relevant Tribunal decision referred by the assessee, learned CIT(A) has not followed the same. Learned CIT(A) has opined that the Tribunal decision referred before him are not of jurisdictional Tribunal. There is no concept of jurisdictional Tribunal. It is only jurisdictional high court. Tribunal is an all India body. Hence, learned CIT(A) has misled himself. It is not the case that learned CIT(A) has quoted any contrary decision. In this view of the matter learned CIT(A) order is not sustainable. When the assessee has duly disputed the stamp valuation, it was incumbent upon the authorities to refer it to valuation cell. The lack of adherence to legal provision and violation of the principle of judicial discipline is in my considered opinion is fatal to the order of learned CIT(A). Hence, I set aside the order of learned CIT(A) and decide the issue in favour of the assessee. 9. In the result, the assessee’s appeal is allowed. Shri Prasad Anant Desai 4 Pronounced in the open court on 27.12.2021 Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai; Dated : 27/12/2021 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai