Sanjeev Kumar Saxena Vs ITO (ITAT Lucknow)
The Lucknow SMC Bench of the Income Tax Appellate Tribunal, Lucknow Bench partly allowed the assessee’s appeal for AY 2015-16 and deleted the addition of ₹11,59,091 made under section 56(2)(vii)(b) on account of alleged difference between stamp-duty value and actual purchase consideration of immovable property.
The Assessing Officer had invoked section 56(2)(vii)(b) (read with section 50C principles) without making a mandatory reference to the Departmental Valuation Officer (DVO), despite a specific request by the assessee disputing the stamp-duty valuation. The CIT(A) sustained the addition.
The Tribunal held that once the assessee objects to the stamp-duty value, the Assessing Officer is statutorily bound to refer the matter to the DVO under section 50C(2) (and the corresponding proviso to section 56(2)(vii)(b)). Non-compliance with this mandatory procedure vitiates the addition. The ITAT relied on its own coordinate-bench decision in Nirmal Singh v. ITO (Lucknow) and a catena of Tribunal decisions holding that additions made without DVO reference are unsustainable.
On facts, the Tribunal noted that the variation between actual consideration and stamp value was marginal, and in any event, the Assessing Officer’s failure to obtain a DVO valuation was fatal. Accordingly, the impugned appellate order was set aside and the AO was directed to delete the addition of ₹11,59,091. Other grounds became academic.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
