SUDIPTA SADHUKHAN,HOOGHLY V. D.C.I.T., CIRCLE - 23(1), , HOOGHLY

ITA 1539/KOL/2024

AI Insights

The case involves Sudipta Sadhukhan, the appellant, who contested the addition made to his income by the Assessing Officer under Section 50C of the Income Tax Act, 1961, due to a discrepancy between the sale consideration of a property and its stamp duty value. The AO added Rs. 12,75,082 to the appellant's income, considering the stamp duty value as the sale consideration for tax purposes. The appellant's appeal to the Commissioner of Income-tax (Appeals) was dismissed, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal, referencing decisions from the Calcutta High Court and a Coordinate Bench of ITAT, found that the AO should have referred the valuation issue to the DVO, which was not done. Consequently, the Tribunal set aside the lower orders and remanded the matter back to the AO for a proper valuation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469565 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 16-07-2024
• Other Referred Cases: Sunil Kumar Agarwal vs. CIT, Sandip Kumar Agarwal vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Sale consideration of property below Jantri Value
• Section: 143(3); 250; 43CA; 50C

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 1539/KOL/2024 Assessment Year: 2014-15 Sudipta Sadhukhan………………………………………………………..Appellant [PAN: AREPS 0229 E] Vs. DCIT, Circle-23(1), Hooghly...................................................Respondent Appearances: Assessee represented by: Sunil Surana, AR. Department represented by: S.B. Chakraborthy, JCIT, Sr. DR. Date of concluding the hearing : August 20th, 2024 Date of pronouncing the order : November 5th, 2024 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2014-15 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- 1, Surat [in short ld. ‘CIT(A)’] dated 25.06.2024 arising out of the assessment order framed u/s 143(3) of the Act dated 06.12.2016. 1.1. The brief facts of the case of the appellant are that the assessee filed its return of income on 28.11.2014 for the AY 2014-15 declaring total income of Rs. 15,68,313/-. The return was processed and selected for scrutiny and find I.T.A. No.: 1539/KOL/2024 Assessment Year: 2014-15 Sudipta Sadhukhan. Page 2 of 4 that the assessee sold a property during the year at Rs. 10,99,918/-. However, the stamp duty value was determined at Rs. 23,75,000/-. Therefore, the assessee computed capital gain considering the sale consideration at Rs. 10,99,918/- only. The Assessing Officer (hereinafter referred to as ld. 'AO') made an addition of Rs. 12,75,082/- u/s 50C of the Act. The said order has been challenged by the assessee before the ld. CIT(A) wherein appeal of the assessee has been dismissed by upholding the addition made by the ld. AO. Being aggrieved and dissatisfied with the impugned order, the present appeal has been preferred. 1.2. The ld. Counsel for the assessee challenges the impugned order thereby submitting that the ld. AO should have referred the issue of valuation to the DVO for determination of the market value that has not been done by the ld. AO hence, the order passed by the ld. AO confirmed by the ld. CIT(A) is illegal and liable to be set aside. The ld. Counsel for the assessee cited a decision of the Hon'ble Calcutta High Court passed in the case of Sunil Kumar Agarwal vs. CIT reported in GA No. 3686 of 2013, ITAT No. 221 of 2013 and also cited a decision of the Coordinate Bench of ITAT, Kolkata in the case of Sandip Kumar Agarwal vs. ITO in ITA No. 1057/KOL/2024 order dated 08.08.2024. 1.3. Contrary to that ld. D/R supports the impugned order. 2. We have perused the case of the assessee as well as the order of the ld. CIT(A) and find that the first appellate authority has observed that the option before the assessee was to get the proper value through DVO but since he has not availed of nor made any request therefore, no option left for the ld. AO to add an amount of Rs. 12,75,084/-. In this context, we have perused the cited decision of the Hon'ble Calcutta High Court and find that the Hon'ble Court has held thus: “For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has I.T.A. No.: 1539/KOL/2024 Assessment Year: 2014-15 Sudipta Sadhukhan. Page 3 of 4 taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. For the aforesaid reasons, the order under challenge is set aside.” 2.1. We have also perused the order of the Coordinate Bench of ITAT, Kolkata in ITA No. 1057/KOL/2024 and find that the cob has also allowed the appeal of the assessee on the ground that the ld. AO shall call for the report from the DVO and thereafter, determine the alleged purchase consideration in the hands of the assessee for the purpose of Section 56(2)(vi)(b)(ii) of the Act. In the present case, as we have already discussed in the preceding paragraph that ld. CIT(A) has observed in upholding the order of the ld. AO which is reproduced herein below: “5.5 The appellant has further, raised the ground in his submission that the AO should have referred the issue of valuation to DVO for determination of market value as on the date of sale since the value taken by Stamp Valuation authority was excessive. It is hereby to be mentioned that in this case, it is undisputed that the properties have been sold by the assessee below the stamp duty valuation rate. It is further contended that if the AO was not satisfied with the explanation of the assessee then he could have referred the matter to the Valuation Cell. In this regard, it is to be mentioned that the appellant has not made a request for referring the property to the Valuation Cell or his request has been denied by the Assessing officer. In the absence of the same, the deeming provision of section 43CA gets attracted and the sale consideration for the properties has to be adopted as per the valuation of Stamp Duty authority.” 3. Keeping in view the cited decisions as well as facts of the case, we deem it appropriate to set aside both the impugned orders and restore this issue to the file of ld. AO for re-adjudication. The ld. AO shall call for a report from the DVO and thereafter determine the alleged purchase consideration in the hand of the assessee. I.T.A. No.: 1539/KOL/2024 Assessment Year: 2014-15 Sudipta Sadhukhan. Page 4 of 4 4. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 5th November, 2024. Sd/- Sd/- [Rakesh Mishra] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 05.11.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Sudipta Sadhukhan, 9, Ashutosh Laha Lane, Rishra, Serampore, Hooghly, 712248. 2. DCIT, Circle-23(1), Hooghly. 3. CIT(A)-1, Surat. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "