Shri Kalyan Das Gupta, Kolkata V. ITO, Ward 45(3), Kolkata

ITA 9/KOL/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3436 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 05-03-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 31-12-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Assessment record; Set aside
• Section: 56; 143(3); 250

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA श्री राज े श क ु मार, ल े खा सदस्य एवं श्री अधिक े श बिजी, न्याधयक सदस्य क े समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & SRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.: 9/KOL/2024 Assessment Year: 2015-16 Shri Kalyan Das Gupta............................................................Appellant [PAN: AKWPK 5060 C] Vs. ITO, Ward-45(3), Kolkata......................................................Respondent Appearances: Assessee represented by: Sh. Abhishek Bansal, A/R. Department represented by: Sh. P.P. Barman, Sr. D/R. Date of concluding the hearing : March 6 th , 2024 Date of pronouncing the order : March 11 th , 2024 ORDER Per Anikesh Banerjee, Judicial Member: The instant appeal of the assessee was filed against the order of the Commissioner of Income-tax (appeals)-NFAC, Delhi [in brevity ld. ‘CIT(A)’] dated 01.09.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the ‘Act’) for assessment year 2015-16. The impugned order was emanated from the order of the ITO, Ward-45(3), Kolkata (in brevity the ‘AO’) passed u/s 143(3) of the Act dated 29.12.2017. 2. The Registry informed that the appeal was with a delay of 62 days. Condonation petition was filed. Ld. D/R had not made any strong objection I.T.A. No.: 9/KOL/2024 Assessment Year: 2015-16 Shri Kalyan Das Gupta. Page 2 of 5 against the condonation of delay of the assessee. Accordingly, the delay is condoned and the matter is taken for adjudication. 3. The assessee has taken the following grounds of appeal: “1. For that the order of the Ld. C1T [A] is arbitrary, illegal and bad in law. 2. For that the Ld. C.I.T (A) erred in deciding the appeal exparte without allowing the appellant any proper and reasonable opportunity of being heard. 3. For that the Ld. CIT (A) erred in passing the order in haste without referring the matter for DVO in spite of the fact the assessee repeatedly requested for referring the mater to DVO. 4. For that the Ld. C.I.T [A] is bad in law since the order passed is not any speaking order nor the C.I.T(A) has looked into the assessment records and relevant materials to conclude that the order of the Ld. AO cannot be interfered with. 5. For that the CIT (A) erred in confirming the action of Ld. AO in making addition of Rs. 48,17,500/- u/s-56(2)(vii) directly on the basis of value adopted by the registering authority without referring the matter to the DVO as mandated under the law and held in the case of Sunil Kumar Agarwal vs. CIT (2015) 372 1TR 83 (Cal). 6. For that even otherwise, the Ld. AO failed to note that the land purchased by the assessee was a litigated property against which litigations were pending before judicial forum. As such the property acquired by the assessee cannot be equated at par with unencumbered properties. 7. For that under the facts and circumstances of the case, the addition made by the Ld. AO is liable to be deleted. 8. Even otherwise, the addition made is arbitrary and excessive. 9. For that the order of the AO be modified and the assessee be given relief prayed for. 10. For that the appellant craves leave to add, alter or withdraw any ground/s of appeal on or before hearing of the appeal.” 4. The brief fact of the case is that the assessee was assessed u/s 143(3) of the Act and addition was made u/s 56(2)(vii) of the Act for purchasing property at Santoshpur, Dist. 24 Pgs. (North), WB from M/s. Modern House & Land Development Co. Ltd. for a consideration of Rs. 10 Lakh. But the market value of the property was Rs. 58,17,500/-. So, the difference amount I.T.A. No.: 9/KOL/2024 Assessment Year: 2015-16 Shri Kalyan Das Gupta. Page 3 of 5 of Rs. 48,17,500/- was added back u/s 56(2)(vii) of the Act. As per the ld. AO the assessee has made the request for DVO on the last day on 29.12.2017. So, the appointment of DVO was not possible related to this transaction. Order was passed on same day i.e. on 29.12.2017 without referring to the DVO. The addition was confirmed at Rs. 48,17,500/-. Aggrieved assessee filed an appeal before ld. CIT(A). Ld. CIT(A) passed an ex-parte order. The assessee was unable to submit any evidence or documentary evidence before ld. CIT(A). Ld. CIT(A) upheld the assessment order and passed the order. Being aggrieved the assessee filed an appeal before us. 5. The ld. A/R first vehemently argued and placed that without considering the DVO the order was passed. So, the assessment order should be quashed. The ld. A/R explained that the difference of the purchase value and circle rate is due to the property is in litigation. The ld. A/R submitted the documents related to litigation running in the Hon'ble High Court at Calcutta bearing W.P. No. 2170 (W) of 2016 in the matter of Kalyan Das Gupta-Petitioner vs. State of West Bengal-Respondent. The copy of the order of the Hon'ble High Court of Calcutta is duly attached. During the appeal proceeding the assessee was unable to submit any documentary evidence and the order was passed ex-parte. The ld. A/R further placed that the matter should remanded back to the file of the ld. AO for further verification de novo related to addition u/s 56 of the Act. 6. The ld. D/R vehemently argued and relied on the orders of the Revenue authorities and placed before the Bench as follows: “It is seen from the records that the assessee had purchased a property/land during the year under consideration. The property/land purchased at R. S. Dag No. 657, Khatian No.1001, J. L. No.22, Mouza- Santoshpur, P. S. Survey Park, Dist. 24 Parganas (South) from M/s Modern House & Land Development Co. Ltd. for a consideration of Rs. 10,00,000/- . The market value of the said property as per deed of conveyances is Rs.58,17,500/-. But as the purchase considerations of the property is less than the market value of the property, the A/R of the assessee was asked to explain vide this office show-cause notice dated 14.12.2017 why the provisions of section 56(2)(vii) will not attract in his case. I.T.A. No.: 9/KOL/2024 Assessment Year: 2015-16 Shri Kalyan Das Gupta. Page 4 of 5 The A/R of assessee has filed a written submission dated 29.12.2017 in response to this office show-cause notice requesting this office to refer for valuation of the said land to the Departmental Valuation Officer The assessee's submission is duly considered but not accepted as the assessee is unable to substantiate the difference in the market value of the property and the purchase consideration. Moreover, the assessee's request to refer for valuation of the land to the Departmental Valuation Officer is not possible as the assessee has requested only on 29.12.2017 and there is no time left for this procedure.” 7. We heard the rival submission and considered the documents available in the record. The assessee was assessed and addition was made u/s 56 of the Act to the amount of Rs. 48,17,500/- for difference in purchase value and the circle rate of the property. There is a reasonable ground for difference in purchase value and circle rate as the property is itself in litigated property. Further the assessee has prayed for the DVO at the end of the assessment i.e. on 29.12.2017. On the same date the order was passed. During the appeal before ld. CIT(A) the assessee was unable to substantiate his claim and unable to file the evidence before ld. CIT(A). We find that there is a reasonable cause for the difference in purchase value and the circle rate. But the assessee should get another opportunity for valuation of the property. Accordingly, the matter is remit back to the file of the ld. AO with a direction that the de novo verification of the addition made u/s 56(2)(vii) of the Act amounting to Rs. 48,17,500/- and the ld. AO is directed to call a report from the DVO related to this difference of value in the property purchased by the assessee. In our considered view the appeal order is duly set aside, and the matter is remand back to the ld. AO for verification as directed above. 8. In the result, ITA No. 9/KOL/2024 is allowed for statistical purposes. Order pronounced in the open Court on 11 th March, 2024. Sd/- Sd/- [Rajesh Kumar] [Anikesh Banerjee] Accountant Member Judicial Member Dated: 11.03.2024 Bidhan (P.S.) I.T.A. No.: 9/KOL/2024 Assessment Year: 2015-16 Shri Kalyan Das Gupta. Page 5 of 5 Copy of the order forwarded to: 1. Shri Kalyan Das Gupta, 127, Santoshpur Avenue, Santoshpur-700 075 2. ITO, Ward-5(3), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata