MR. AKHLAQUEAHMED MAKHDUMALI GHARADE,MUMBAI V. I T O, WARD-17 (1)(1), MUMBAI

ITA 6146/MUM/2024

AI Insights

The case involves Mr. Akhlaqueahmed Makhdumali Gharade, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs. 70.90 lakhs as Short Term Capital Gain for the Assessment Year 2011-12. The AO had re-opened the assessment under Section 148 of the Income Tax Act, 1961, based on information that the assessee sold a property, which was not responded to by the assessee initially. The CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal. The Tribunal found that the issue required fresh examination, particularly the applicability of Section 50C, and directed the AO to re-assess the matter with the new evidence provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471333 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Keywords: Set aside; Additional evidence; Corroborative evidences; Sale consideration of property below Jantri Value
• Section: 147; 48; 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “A” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No. 6146/Mum/2024 Assessment Year : 2011-12 Mr. Akhlaqueahmed Makhdumali Gharade, 2nd Floor, R/n. 48 74, Aishabai Chamber, Sofia Zubair Road, Nagapada, Mumbai PAN : AJGPG2886B vs. Income Tax Officer, Ward-17(1)(1), Mumbai (Appellant) (Respondent) For Assessee : NONE For Revenue : Shri Ram Krishn Kedia, Sr.DR Date of Hearing : 06-02-2025 Date of Pronouncement : 06-02-2025 O R D E R PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dt.09-10-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-52, Mumbai [„Ld.CIT(A)‟] and it relates to AY. 2011-12. The assessee is aggrieved by the decision of the Ld.CIT(A) in confirming the addition of Rs. 70.90 lakhs made by the AO towards Short Term Capital Gain. 2. None appeared on behalf of the assessee. However, the assessee has filed written statement, containing factual details relating to the addition. 2 ITA No. 6146/Mum/2024 3. We heard the Ld.DR and perused the record. The AO re-opened the assessment of the year under consideration by issuing a notice u/s. 148 of the Income Tax Act, 1961 („the Act‟), upon receiving information that the assessee has sold a property for a consideration of Rs. 57.16 lakhs, whose stamp duty valuation was Rs. 70.90 lakhs. Since the provisions of section 50C of the Act is attracted and a difference of Rs.13.74 lakhs is required to be assessed as income of the assessee, the AO re-opened the assessment. However, the assessee did not respond to the notices issued by the AO. Hence, the AO in the absence of any details relating to purchase of property, assessed the entire stamp duty valuation of Rs. 70.90 lakhs as Short Term Capital Gain in the hands of the assessee. 4. Before the Ld.CIT(A), the assessee filed written submissions. It is stated that the assessee is a non-resident Indian and he had actually purchased a property from Lotus Enterprises on 09-08-2010 for a consideration of Rs. 57.16 lakhs. The assessee admitted that the stamp duty valuation was Rs. 70.90 lakhs. It was submitted that the entire consideration of Rs. 57.16 lakhs was paid by way of cheque. Accordingly, it was contended before the Ld.CIT(A) that very initiation of proceedings u/s. 147 of the Act was not correct, as provisions of sec.50C will not be applicable to a purchase transaction. The Ld.CIT(A), however, took the view that the AO has re-opened the assessment on the basis of information furnished by the Investigation Wing and hence, reopening cannot be held to be not valid. Further, the Ld.CIT(A) observed that the assessee has not furnished any detail or evidence to support his claim that he has only purchased a property and not sold a property. Accordingly, he dismissed the appeal of the assessee. Aggrieved, the assessee filed this appeal before the Tribunal. 5. Before us, the assessee filed a Paper Book as well as written submissions. In the Paper Book, the assessee has furnished a copy of 3 ITA No. 6146/Mum/2024 agreement for sale dt. 09-08-2010 in order to substantiate his claim that he has only purchased the property and not sold the property. The Ld.DR submitted that this document is an additional evidence furnished by the assessee for the first time before the Tribunal and accordingly, he submitted that the same requires examination at the end of the AO. 6. We notice that the AO was constrained to pass the order ex-parte to the best of his judgment, since the assessee did not furnish the evidences to prove that he has only purchased a property and not sold a property. Before the Ld.CIT(A) also, no material was placed, even though in the written submissions filed before him, it was contended that the assessee has only purchased the flat. Thus, we notice thatthe claim of the assessee could not be examined by the tax authorities in the absence of any supporting evidences. Accordingly, we find merit in the submission of the Ld.DR that this issue requires fresh examination at the end of the AO. However, there should not be any dispute that the provisions of section 50C of the Act will be apply only to a transaction of sale of property. The question of assessing the difference between the actual consideration and stamp duty valuation in the hands of buyers was introduced u/s.56(2)(x) of the Act only w.e.f. 01-04-2017. Hence, if the claim of the assessee that he has only purchased a property is accepted, then, the difference between the apparent consideration and stamp duty valuation cannot be assessed in the hands of the assessee during the year under consideration. 6.1. Since the claim of the assessee requires verification at the end of the AO with the supporting documents furnished by the assessee before the Tribunal, we set aside the order passed by the Ld.CIT(A) and restore all the issue to the file of the AO for examining them afresh. We also direct the assessee to fully co-operate with the AO for expeditious 4 ITA No. 6146/Mum/2024 completion of the assessment. The AO should consider the legal position discussed above, while finalizing the assessment. 7. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 06-02-2025 Sd/- Sd/- [ANIKESH BANERJEE] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 06-02-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "