Anil Agrawal Vs ACIT (ITAT Raipur)
The appeal before the ITAT Raipur arose from an order passed under Section 263 of the Income Tax Act, 1961 by the Principal Commissioner of Income Tax (Central), Bhopal for Assessment Year 2018-19. The assessee challenged the validity of the revision order on the ground that the conditions under Explanation 2 to Section 263 were not satisfied.
The assessee had originally filed a return declaring income of ₹7,95,750. He purchased land for ₹18,00,000, while the Stamp Valuation Authority determined its value at ₹46,33,000. The Assessing Officer (AO) reopened the assessment under Section 148, inferring escapement of income under Section 56(2)(x)(b) due to the difference of ₹28,33,000. During reassessment, the AO referred the property to the Departmental Valuation Officer (DVO), who valued it at ₹18,94,339. The difference between the DVO valuation and purchase price was ₹94,339 (5.24%). The AO, after considering the facts and submissions, accepted the returned income without making any addition.
The PCIT invoked Section 263, holding that the AO’s order was erroneous and prejudicial to the interests of the Revenue. According to the PCIT, the safe harbour margin of 5% or 10% was not applicable for AY 2018-19, as the 5% tolerance was introduced from 01.04.2019 and 10% from 01.04.2021. The PCIT directed fresh assessment on the issue of taxation of ₹94,339.
