JASMIN HASMUKHLAL VAKHARIA,MUMBAI V. ADDL/JCIT(A)-2, DELHI

ITA 6450/MUM/2024

AI Insights

The case involves Mohamed Javeed Mohammed Bumedia, the appellant, contesting the additions made by the Assessing Officer (AO) under section 56(2)(x) of the Income Tax Act, 1961, without referring the property for valuation to the District Valuation Officer (DVO) as per section 50C. The appellant argued that the property should have been referred to the DVO before any additions were made, a request that was not complied with by the AO. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's decision, leading the appellant to appeal to the Income Tax Appellate Tribunal (ITAT). The ITAT, after hearing the arguments, decided to remit the issue back to the AO with directions to refer the property to the DVO and reassess the situation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37901 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIHAR RANJAN SAMAL
• Assessee Lawyers: KAVITA NABERA
• Keywords: Set aside; Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “SMC” Bench, Mumbai. Before Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM) ITA No. 6506/MUM/2024 (Assessment Year : 2018-19) Mohamed Javeed Mohammed Bumedia Shop No. 1, Ruby Building, 14, New Bangalipura Street Mumbai-400 003. Vs. ITO-25(2)(1) Kautilya Bhavan Mumbai-400051. PAN : ADHPB0778J Appellant Respondent Assessee by : Ms. Kavita Nabera Revenue by : Shri Nihar Ranjan Samal Date of Hearing : 04/02/2025 Date of pronouncement : 25/02/2025 O R D E R Per Omkareshwar Chidara (AM) :- In the above captioned appeal, the appellant tool the following grounds of appeal to be adjudicated by the ITAT :- 1. On the facts and circumstances of Appellant's case and in law the Id. CIT(A) erred in confirming the action of the Id. A.O. in making addition without referring the case for valuation before the DVO as per section 50C of the Income Tax Act, 1961. 2. On the facts and circumstances of Appellant's case and in law the Id. CIT (A) erred in confirming the action of the Id. A.O. in making addition of sum of Rs. 25,55,833/- by invoking the provision of section 56(2)(x) of the Act, for the reasons mentioned in the impugned order or otherwise. 3. The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing. The Appellant prays your Honour to direct the Learned Assessing Officer to delete the additions/disallowances made in the impugned order. 2. From the assessment order, it is observed that the Ld. AO has adopted the value of property as per stamp value authority and completed the Mohamed Javeed Mohammed Bumedia 2 assessment disregarding the valuation report submitted by the appellant during assessment proceedings. The appellant claims that the property in question also was not referred to the DVO by Ld. AO despite his specific request and made the addition in terms of section 56(2)(x) of the I.T. Act. 3. Aggrieved by the order of Ld. AO, an appeal was filed by the appellant before Ld. CIT(A) who has confirmed the addition after discussing the case on merits of the case. There is non-compliance to the hearing notices issued by Ld. CIT(A), it is observed from the order of Ld. CIT(A). 4. During the hearing proceedings before the ITAT, the Ld. AR of appellant has relied on the grounds of appeal and requested for an opportunity to submit his reply before the first appellate authority. It was pleaded that there is a basic flaw in the assessment order to the effect that before invoking the provisions of section 56(2)(x) of the Act the issue should be referred to the DVO, as requested by the appellant. The Ld. AR of the appellant has argued that the property in question be referred to the DVO by Ld. AO and take action as per law. 5. The Ld. DR relied on the orders of the lower authorities and pleaded for confirming the addition as there is no compliance of hearing notices before the first appellate authority. 6. Heard rival submissions and it is decided that the issue is remitted to the file of Ld. AO. The Ld. AO is directed to refer the matter to DVO as requested by Ld. AR of the appellant, before making addition u/s. 56(2)(x) of the Act. The appellant may be given an effective opportunity before passing the order. The appellant is directed to cooperate with the Department in completing the assessment at the earliest. 7. With the above directions, the matter is set aside to the file of Ld. AO. Mohamed Javeed Mohammed Bumedia 3 8. The appeal of appellant is allowed for statistical purposes. Order pronounced in the open Court on 25/02/2025. Sd/- Sd/- (BEENA PILLAI) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 25/02/2025 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS "