Lakshmi Ojha Vs ITO (ITAT Kolkata)
The appeal filed by Lakshmi Ojha against the order of the Ld. CIT(A)-NFAC for the Assessment Year 2020-21 was primarily concerned with a large addition made by the Assessing Officer (AO) due to the difference between the property’s declared purchase price and its stamp valuation. The assessee reported the purchase of a property at Rs.4,00,000/-, significantly below the stamp valuation authority’s value of Rs.1,84,38,570/-. Due to the assessee’s non-response to a show cause notice, the AO invoked Section 56(2)(x) (deeming the difference as ‘Income from Other Sources’) and added the entire differential amount of Rs.1,76,38,570/- to the assessee’s income. This assessment was later confirmed ex parte by the Ld. CIT(A) due to the assessee’s non-compliance during the appellate proceedings.
Before the ITAT, the assessee’s counsel did not argue the merits of the addition directly but requested a fresh opportunity, asserting that the AO was legally bound to refer the matter to the Departmental Valuation Officer (DVO) for a technical valuation under Section 50C (which deals with capital gains, but the principle of valuation reference is relevant) or similar provisions, a step the AO failed to take. The assessee submitted an affidavit explaining the non-compliance at the appellate stage was due to a chronic health issue of her husband and alleged non-receipt of hearing intimations from the NFAC, contrasting this with her active cooperation during the initial assessment stage. Considering the nature of the dispute—a difference in property valuation—and the absence of the mandatory DVO report, the Tribunal found merit in remitting the case. Given that the Revenue did not object to the remand, the ITAT set aside the orders of both the AO and the Ld. CIT(A). The Tribunal directed the AO to pass a fresh order after obtaining and considering the DVO’s report on the property’s fair market value, thereby allowing the appeal for statistical purposes.
