RAMASAMY SOLAISAMY,VIRUDHUNAGAR V. ITO, NCC-2, MADURAI

ITA 2397/CHNY/2024

AI Insights

The case involves an appeal by Ramasamy Solaisamy against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi, concerning the assessment year 2017-18. The primary issue in the appeal was the addition of Rs. 87,84,500 under section 56(2)(vii)(b) of the Income Tax Act, which was initially added by the Assessing Officer (AO) due to a discrepancy between the purchase price of an immovable property and its fair market value as assessed by the stamp authority. The First Appellate Authority dismissed the appeal due to non-compliance by the assessee in responding to notices. The Tribunal found that the CIT(A) had not adequately addressed the issues raised and directed a re-evaluation of the case, emphasizing the need for a comprehensive DVO report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46372 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEILA PARTHASARTHY
• Keywords: Opportunity of being heard; Fair market value; Valuation report
• Section: 56(2)(vii)(b)

Judgement Text

"आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2397 /Chny/2024 निर्ाारण वर्ा /Assessment Years: 2017-18 Ramasamy Solaisamy No.9E, Chairman, NPSN Arumugam Road, Sivakasi Viruthunagar, Tamil Nadu-626 123. [PAN: ACVPS7427C] Income Tax Officer, Non-Corp., Circle-2, Madurai (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : None प्रत्यर्थी की ओर से /Revenue by : Ms.Sheila Parthasarthy, Addl.CIT सुिवाई की तारीख/Date of Hearing : 05.12.2024 घोर्णा की तारीख /Date of Pronouncement : 22.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed against the order bearing DIN & Order No. ITBA/NFAC/S/250/2024-25/1067969910(1) dated 26.08.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2017- 18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 26.08.2024 passed by NFAC, Delhi. 2.0 The only issue arising in this appeal of asessee is regarding addition of Rs. 87,84,500/- u/s 56(2)(vii)(b) made by the Ld. AO and ITA No.2397/Chny/2024 :- 2 -: Page - 2 - of 4 which has been confirmed by the Ld. CIT(A). On the impugned date of hearing there was no attendance from the assessee side. 3.0 The Ld. DR informed that the assessee is an individual and engaged in the business of fireworks. During the year under consideration the assessee was noted to have purchased an immovable property for Rs.38,68,000/- as against the fair market value fixed by the stamp authority of Rs.1,26,52,500/-. Invoking the provision of section 56(2)(vii)(b) the Ld.AO made the addition of Rs.87,84,500/-. Since, the assessee did not accept the fair market value fixed by the stamp authority he referred the case to the DVO for valuation. The Ld. First Appellate Authority recorded that he had issued several notices to the assessee but there was no compliance, consequently he dismissed the appeal of the assessee. The Ld. DR accordingly relied upon the order of lower authorities. 4.0 We have considered the material on records in the light of arguments put forth by the Revenue. The assessee has contended through ground of appeal that the Ld.CIT(A) has passed a non-speaking order without any application of mind. It is noted that the grounds of appeal raised by the assessee are totally confusing. It is also been contested the Ld.AO ought to have referred the matter to valuation officer. The undisputed fact of the case is that the assessee has not ITA No.2397/Chny/2024 :- 3 -: Page - 3 - of 4 responded before the Ld.CIT(A). Through ground of appeal no.5 and 7 filed it has stated that the Ld.AO was requested to make a reference to valuation officer but he did not do. Through ground of appeal no.6, the assessee has stated that the Ld.CIT(A) failed to get the valuation report even though more than six years have lapsed. The order of the Ld.AO shows that reference was made to valuation officer. Thus there appears to be a gross mix up of facts. We have also noted that the order of the Ld.CIT(A) is not crystal clear on facts apparently on account of non- compliance by the assessee and hence decision on merits is not comprehensive. He has primarily raised the principle of “Vigilantibus non dormiantidusjurasubveniunt” meaning law help those who are vigilant before dismissing assessee’s appeal for non-compliance. A report of the DVO to whom reference was made by the Ld.AO is necessary. Consequently, we are of the view that the ends of justice would be met if the Ld.CIT(A) is directed to readjudicate the appeal. Accordingly, we set aside the order of the Ld.CIT(A) and direct him to readjudicate the matter after giving due opportunity of being heard to the assessee and passing a speaking order. He will also direct the Ld.AO to submit the remand report after considering DVO’s report. The assessee shall be bound to comply with the notices of the Ld.CIT(A) and produce all documents deemed necessary. Any non-compliance from the part of the assessee shall ITA No.2397/Chny/2024 :- 4 -: Page - 4 - of 4 adversely be viewed. According, all the grounds of appeal raised by the assessee are allowed for statistical purposes. 5.0. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 22nd , January-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 22nd , January-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT – Madurai. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "