M/S.SWASTIK DEVELOPMENTS, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-19(3), MUMBAI

ITA 6527/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4545 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 15-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Assessee Lawyers: PARTH SANGHVI
• Keywords: Fair market value; Valuation report
• Section: 43CA; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.6527/MUM/2018(A.Y.2014-15) M/S. SWASTIK DEVELOPMENTS, 1102, GIRNAR APARTMENT, 69, TARDEO ROAD, MUMBAI 400 034. PAN:AABFS 1155M ...... APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 19(3), MATRU MANDIR, TARDEO,MUMBAI 400 007 ..... RESPO NDENT APPELLANT BY : SHRI PARTH SANGHVI RESPONDENT BY : SHRI KUMAR PADMAPA NI BORA DATE OF HEARING : 12/12/2019 DATE OF PRONOUNCEMENT : 11/02/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 2, MUMBAI ( IN SHORT THE CIT(A) ) DATED 05/10/2018 FOR ASSESSMENT YEAR 2014-15. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSM ENT YEAR DECLARING TOTAL INCOME OF RS.58,08,824/-. IN SCRUTINY ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER MADE ADDITION OF RS.16,95,000/- UNDER SECTI ON 43CA OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). AGGRIEVED, AGAINS T THE ASSESSMENT ORDER DATED 2 ITA NO.6527/MUM/2018(A.Y.2014-15) 30/12/2016 PASSED UNDER SECTION 143(3) OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) REJECTED THE CONTENTIONS OF ASSESSEE AND CONFIRMED THE ADDITION. HENCE, THE PRESENT APPEAL BY THE ASS ESSEE. 3. SHRI PARTH SANGHVI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAD SOLD A PROPERTY I.E. INDUSTRIAL UNIT N O.33-34-35-36, 1 ST FLOOR, BUILDING NO.2, SHEETAL SUPREME INDUSTRIAL ESTATE FO R A CONSIDERATION OF RS.99.00 LACS. THE ASSESSING OFFICER BASED ON RECK ONER VALUE DETERMINED FAIR MARKET VALUE OF THE PROPERTY AT RS.1,15,95,000/- THUS, THE ASSESSING OFFICER PROPOSED TO MAKE ADDITION OF THE DIFFERENCE BETWEEN THE VALUE OF PROPERTY SOLD AND FAIR MARKET VALUE I.E.RS. 16,95,000/-. TH E ASSESSEE FILED VALUATION REPORT FROM THE APPROVED VALUER BEFORE ASSESSING OF FICER . THE APPROVED VALUER DETERMINED THE MARKET VALUE OF THE SAID PRO PERTY AT RS.90,20,000/-. THE ASSESSING OFFICER WITHOUT CONSIDERING THE VALUA TION REPORT AND WITHOUT ASSIGNING ANY REASON TO REJECT THE REPORT MADE ADDI TION OF THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE DETERMINED BY HIM AND THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE. THE LD. AU THORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE CIT(A) ALSO FAILE D TO APPRECIATE THE DOCUMENTS ON RECORD IN RIGHT PERSPECTIVE AND CONFIR MED THE ADDITION. 4. ON THE OTHER HAND, SHRI KUMAR PADMAPANI BORA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER A ND PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE . THE LD.DEPA RTMENTAL REPRESENTATIVE SUBMITTED THAT CIT(A) HAD SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. AFTER EXAMINING THE REPORT, CIT(A) CAME TO THE CON CLUSION THAT THE ASSESSING OFFICER HAD CONSIDERED THE VALUATION REPORT AND THE REAFTER, HAD REJECTED THE SAME. 3 ITA NO.6527/MUM/2018(A.Y.2014-15) 5. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSU E IN APPEAL IS QUA ADDITION OF RS.16,95,000/- MADE UNDER SECTION 43CA OF THE ACT. OSTENSIBLY, THE ASSESSEE HAD FILED VALUATION REPORT FROM APPROVED VALUER BEF ORE THE ASSESSING OFFICER. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AS SESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER HAS OBSERVED THAT ASSESSEE HAS NOT MADE ANY SATISFACTORY SUBMISSIONS . NO REASON HAS BEEN GIVEN BY ASSESSING OFFICER FOR REJECTING THE VALUATION REPORT FURNISHED BY THE ASS ESSEE. IN FACT THERE IS NO MENTION OF VALUATION REPORT IN THE ASSESSMENT ORDER . THE CIT(A) HAS UPHELD THE FINDINGS OF ASSESSING OFFICER ON THE PRESUMPTION TH AT THE ASSESSING OFFICER HAS CONSIDERED VALUATION REPORT FURNISHED BY THE ASSESS EE . TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION THAT THE ASSESSING OFFICER AFTER CONSIDERING THE VALUATION REPORT SHALL PASS A SPEAK ING ORDER ACCEPTING/REJECTING THE SAME. NEEDLESS TO SAY, T HE ASSESSING OFFICER SHALL ALLOW A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSING FRESH ORDER, IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE IMPUGNED ORDER IS SET-ASIDE A ND APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 11 TH DAY OF FEBRUARY, 2020. SD/- SD/- (R.C.SHARMA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11 /02/2020 VM , SR. PS(O/S) 4 ITA NO.6527/MUM/2018(A.Y.2014-15) 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI