RAGHVENDRA SINGH,HOWRAH V. INCOME TAX OFFICER, BAMBOO VILLA, CALCUTTA

ITA 1763/KOL/2025

AI Insights

The case involves Raghvendra Singh, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2018-2019. The primary issue was the addition of Rs.39,49,613 to the assessee's income under section 56(2)(x)(b) of the Income Tax Act, 1961, which was the difference between the purchase price of a property and its stamp duty valuation. The Assessing Officer had provisionally adopted the stamp duty valuation due to the impending limitation of time for assessment, despite a pending valuation report from the Departmental Valuation Officer. The Tribunal found merit in the assessee's request to consider the DVO's valuation and remitted the matter back to the Assessing Officer for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791830 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 04-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CONSIDERING TOTAL
• Keywords: Set aside; Opportunity of being heard; Fair market value; Cost of acquisition; Valuation report; Value adopted by valuation officer
• Section: 142(1)

Judgement Text

" ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 1763/KOL/2025 Assessment Year: 2018-2019 Raghvendra Singh,……………….………...……Appellant 13, Burnt Salt Gola Lane, Howrah-711101, West Bengal [PAN:BJHPS6740J] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-62(1), Kolkata, Bamboo Villa, 169, A.J.C. Bose Road, Kolkata-700014 Appearances by: Shri Vidyut Sethi, C.A., appeared on behalf of the assessee Shri Kallol Mistry, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: November 13, 2025 Date of pronouncing the order: December 09, 2025 O R D E R The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 04.06.2025 passed for Assessment Year 2018-2019. 2. The facts in brief are that the assessee is an individual, who filed his return of income declaring total income of Rs.9,45,530/-. Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 2 Accordingly notice under section 143(2) of the Act dated 28.09.2019 was issued and served on the assessee. Further notices under section 142(1) were issued and served upon the assessee on various dates. The assessee submitted various details as called for vide notices. On perusal of the submissions made by the assessee in respect of the purchase of property, it is seen that assessee along with seven others has purchased the property at Rs.1,73,42,542/-. In this regard, assessee has been asked to submit the clarification and reason why the purchase value is less than the stamp duty authority value. In this regard, assessee has stated that he has not agreed for the stamp duty authority value as the property has lots of draw back in respect of the accessibility of the property from the road, there are many occupants / vendors who are not having any right in the property. Further, building is 75 years old and is in a dilapidated condition and access way is only 4 feet wide way to the main road. The assessee does not agree with the value adopted by the stamp duty authority as it exceeds the fair market value of the property as on the date of transfer as the said value is totally unfair and inconsistent with the value prevailing in the concerned locality. Assessee has requested for the valuation of the property by the DVO of Income Tax Department. Accordingly, the valuation of the property purchased by the assessee has been referred to the DVO of the Income Tax Department. The said valuation is still pending with the DVO of the Department. The assessment proceedings are getting barred by limitation of time on 30.04.2021 in this case. Therefore, show cause notice dt.19.04.2021 along with draft assessment order was issued through the registered email of the assessee and also Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 3 shared with the assessee in the e proceedings of assessee’s e-filing portal. The assessee was required to furnish the explanation on or before 22.04.2021. The assessee vide his response has objected to the addition of the difference in the purchase cost and value as per the stamp valuation authority. The assessee has requested for the valuation of the said property by the Departmental Valuation Officer. A reference has also been made to Departmental Valuation Officer. However, the report from Departmental Valuation Officer has not been received till date. As the scrutiny proceedings are getting barred by limitation on 30.04.2021, the purchase price of the property is computed by provisionally adopting the FMV determined by the stamp duty authority subject to rectification. As and when the valuation report is received from the District Valuation Officer, the same will be deemed to be the purchase price of the property. and accordingly, the total income of the assessee is computed. On perusal of the Memorandum of Consideration signed between the purchasers, it is seen that out of total purchase price of Rs.50,00,000/- an amount of Rs.16,00,000 has been paid by the assessee. Accordingly, his share of purchase price is derived by applying the stamp duty authority value of Rs.1,73,42,542/- according to his share of payment of purchase price of Rs.50,00,000/- which works out as under: 16,00,000/ 50,00,000 X 1,73,42,542 = 55,49,613/ Amount to be treated as income from other sources u/s.56(2)(x)(b) is Rs.39,49,613/- (Rs.55,49,613/- - Rs.16,00,000/-) Therefore, ld. Assessing Officer added the amount of Rs.39,49,613/- to the total income of the assessee under section 56(2)(x)(b) of the Income Tax Act, 1961 and also initiated penalty proceedings separately under section 270A of the Act, Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 4 1961 for under reporting of income. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 3. Ld. CIT(Appeals) dismissed the appeal of the assessee by observing as under:- “On perusal of facts on record as brought out by AO in the assessment order, it is clearly noticeable that appellant is indeed involved in jointly purchase of immovable property for a consideration of Rs.50 lacs which is significantly lower than the value of such property as per SVA as at Rs.1.73 crore as per the provisions of IT Act. In the light of these apparent facts, AO has sought for appellant explanation on the applicability of provision u/s 56(2)(x)(b) of IT Act as applicable to difference in purchase value of property as reasoned in the assessment order. In response to the same, appellant has claimed that such property has many draw backs/deficiencies to fetch the SRO market price such as accessibility of the property from the road, dilapidated condition of building etc., and accordingly appellant claims not to agree with stamp value of property as per SRO/SVA and thereby requested AO, for the valuation of the property by the DVO of Income Tax Department. Accordingly, the valuation of the property purchased by the appellant has been referred by AO to the DVO of the department; however, as the said valuation is pending with the DVO of the department and considering the time barring nature of assessment proceedings, AO computed the purchase price of such property by adopting the FMV determined by the SRO/SVA as applicable as on the date as per the provisions of IT Act in absence of receipt of such valuation report as on the date of assessment. Accordingly, AO has assessed the difference in value of property to tax as applicable other income of the appellant by considering total purchase value of property as at Rs.1.73 crore as per the provisions of IT Act as reasoned in the assessment order. In the light of these apparent facts, on perusal of appellant various GOA/contentions as advanced and on consideration of appellant submissions, it is noticeable that appellant is apparently contending the provisional addition as at Rs.39.49 lacs made by AO as not maintainable and thereby pleaded to consider the same as not attracted by the provisions u/s 56(2)(x)(b) of IT Act. Apparently, appellant is reiterating the same/similar submissions as advanced before AO during assessment proceedings to hold the adoption of SRO value as not maintainable as the property purchased is claimed as having various deficiencies to fetch such price. Further, Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 5 appellant is contending that AO ought not to have considered SRO rate for arriving at applicable other income without obtaining DVO report and thereby contended such provisional addition as made by AO as not maintainable. However, on perusal of apparent facts of case, as brought on record by AO, it is noticeable that appellant is merely advancing various contentions to hold the property as involved with various deficiencies to fetch the FMV of SRO and could not substantiate the same with any such supporting authentic verifiable evidences for its verification by AO as per law. However, in spite of that as pleaded by the appellant, AO has referred the property to valuation and such report of DVO is yet to be received by AO as on the date of passing of this time barring assessment. In the light of these fact, in its right earnest, AO has adopted FMV of the property as per the SVA/SRO rate as available for computation of applicable purchase price to arrive at difference value as per the provisions u/s 56(2)(x)(b) of IT Act as reasoned and explained in assessment order. While doing so, AO has indeed mentioned to consider DVO report on such receipt after passing this order for its adoption as per law and in this context, AO referred the addition as involving provisional addition subject to DVO report as applicable other income u/s 56(2)(x)(b) of IT Act. In the light of these facts apparently, there exists no infirmity in the reasoning adopted by AO in computing the purchase price of property as per the SRO rate and thereby the addition made by AO, is apparently reconcilable as involving other income u/s 56(2)(x)(b) of IT Act. Further, the same is to be treated as substantive addition as per these provisions and appellant contentions to treat the same as mere provisional addition neither has a basis nor has any relevance as AO merely referred to it as provisional computation keeping in view the context of awaited DVO report for its further modification if any, as per law. Hence, appellant claims to hold the same as involving provisional addition warranting for disallowance, is neither reasonable nor acceptable as advanced in appellant contentions without appreciating the correctness of SRO rate as on the date of assessment as per the facts on record. Further, appellant contention to treat the purchase price as at Rs.5 lacs as attributable to appellant as against of Rs.16 lacs as adopted by AO for computation of appellant share in the total price, apparently, appellant did not reconcile his share of price as paid as reflected in the sale deed for its consideration with such supporting proofs as per law. In the absence of the same, appellant mere contentions as advanced on this analogy on the computation of AO on the applicable share of appellant, is to be treated as not maintainable. In the light of all these finer facts, as reasoned and discussed supra and as analyzed by Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 6 AO in assessment order, apparently, there exists no infirmity in the order of AO in adopting SRO rate, resulting in computation of appellant share of income from other sources as at Rs.39.49 lacs u/s 56(2)(x)(b) of IT Act and thereby, appellant various claims/contentions as advanced is to be treated as not maintainable. Accordingly, appellant all GOA/contentions as advanced to hold the order of AO as bad in law and not maintainable is to be treated as not maintainable as analyzed and reasoned supra as per the facts available on record on merits. In the result, appellant all GOA as advanced to hold the order of AO as not maintainable are neither reasonable nor acceptable and same are dismissed as not maintainable as per law, thereby appellant appeal is to be treated as dismissed as per the facts available on record on merits as discussed supra. 6. Accordingly, appellant appeal is dismissed on merits as not maintainable as per law as discussed supra”. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal. It was the submission of the ld. Counsel for the assessee that the ld. Assessing Officer referred the matter to the DVO to ascertain the fair market value of the property but before ascertaining the fair market value, the ld. Assessing Officer completed the assessment. Therefore, he pleaded to set aside the order passed by the ld. Assessing Officer and also he further pleaded to remit the matter back to the file of ld. Assessing Officer to consider the DVO’s valuation and pass appropriate order. 5. On the other hand, ld. Departmental Representative did not raise any objection. 6. I have heard both the sides and perused the material available on record. By considering the totality of the facts and circumstances of the case, I am of the view that it is a fit case to remit the matter back to the file of ld. Assessing Officer to examine Printed from counselvise.com ITA No. 1763/KOL/2025 (A.Y. 2018-2019) Raghvendra Singh 7 this issue afresh on merits and pass an appropriate order and with a direction to obtain the DVO’s report after providing opportunity of being heard to the assessee. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/12/2025. Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 9th day of December, 2025 Copies to :(1) Raghvendra Singh, 13, Burnt Salt Gola Lane, Howrah-711101, West Bengal (2) Income Tax Officer, Ward-62(1), Kolkata, Bamboo Villa, 169, A.J.C. Bose Road, Kolkata-700014 (3) CIT(A), NFAC, Delhi; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha Printed from counselvise.com "