Raghvendra Singh Vs ITO (ITAT Kolkata)
Provisional Addition Without DVO Not Sustainable – 56(2)(x) Addition Kept on Hold: Tribunal Sends Case Back for DVO Report
Tribunal noted that Assessee jointly purchased an old dilapidated property for Rs.50 lakhs, of which Assessee’s share was Rs.16 lakhs. AO held that stamp-duty value of Rs.1.73 crore must be adopted for computing difference u/s 56(2)(x)(b) since the value declared was significantly lower. Assessee objected & pointed out several deficiencies such as narrow access, multiple occupants & old structure, & specifically requested valuation by DVO. AO referred matter to DVO but, as the DVO report was not received & assessment was getting time-barred on 30.04.2021, AO made an addition of Rs.39,49,613 on a provisional basis adopting SVA value, subject to rectification after DVO report. CIT(A) upheld AO’s view stating Assessee failed to furnish verifiable evidence of deficiencies & that AO rightly adopted SVA in absence of DVO’s report.
Before Tribunal, Assessee argued that assessment ought not to have been finalized without DVO valuation. Tribunal accepted this contention & held that since AO had already invoked DVO mechanism, assessment should not have been concluded before receiving DVO’s fair market value. Tribunal therefore set aside the orders & remitted matter to AO to obtain DVO report, re-examine the valuation afresh & pass order after giving opportunity of hearing.
