Case Law Details
Mohd. Ilyas Ansari Vs ITO (ITAT Mumbai)
Assessing Officer mechanically applied provisions of section 56(2) to difference between stamp duty value and actual sale consideration paid by assessee and made additions, without making any efforts to find out actual cost of property, additions made by Assessing Officer were to be set aside.
In this case Assessing Officer completely ignored the valuation report of the Government Registered valuer submitted by the assessee and the submissions thereon. The Assessing Officer mechanically applied provisions of section 56(2) of the Act to bring the difference between the stamp duty value and the actual sale consideration paid by the assessee without making any efforts to find out the actual cost of the property when in fact the assessee stated that the property when purchased was under semi construction stage and there were disputes between builders and the purchasers and ultimately the builder was abandoned the project and left. The assessee also stated that what was purchased as per the agreement is different than what was given to him as the property was sold to two persons. So there is dispute in the area acquired by the assessee also. In such circumstances, it was all the more necessary for the Assessing Officer to refer it to the Valuation Officer which he miserably failed. Even at the stage of appellate proceedings when the assessee produced Valuation Officer’s report who valued Flat No. 601 in the very same Building at ₹.1,00,76,000/- the Ld.CIT(A) should have called for remand report and in turn the Valuation Officer’s report which the Ld.CIT(A) failed to do so. In such circumstances the addition made by the Assessing Officer is totally unjustified and cannot be sustained. We are also of the opinion that the revenue cannot be allowed a second inning by sending the matter back to the Assessing Officer to prove before the Assessing Officer that the sale consideration was the fair market value of the property purchased by the assessee when the assessee was all along disputing valuation of the property and the revenue miserably failed to find out the correct value of the property both at assessment stage as well as at first appellate stage. The decisions referred to above squarely applies to the facts of the assessee’s case. Thus in the facts and circumstances of the case and also in view of the above judicial pronouncements we direct the Assessing Officer to delete the addition made u/s. 56(2) of the Act. Ground No.2 of grounds of appeal is allowed.
28. Ld. Counsel for the assessee also made submissions with regard to additional ground raised i.e provisions of section 56(2)(vii)(b) does not apply to the property which is still under construction and made elaborate submissions on this. The Ld. Counsel for the assessee also made submissions that the addition was entirely made in the hands of the assessee though the flat was purchased by the assessee jointly with his wife. It is also argued that the Ld.CIT(A) erred in taking area of the flat at higher figure than the actual area of the flat in possession. Since we have allowed Ground No. 2 of grounds of appeal of the assessee and deleted the addition made u/s. 56(2)(vii) all other contentions raised in other grounds of appeal including the additional ground are left open as the adjudication of all these grounds would render academic at this stage. The assessee is at liberty to agitate all these grounds at an appropriate stage.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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