Court affirmed that for assessing income, stamp duty valuation prevails under Section 56(2)(vii)(b)(ii) to counteract under-reporting in property transactions.

ORDER

PER SHRI NARENDRA PRASAD SINHA, AM:

This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-12, Ahmedabad (in short ‘the CIT(A)), dated 14.07.2023 for the Assessment Year 2015-16.

2. There was a delay of 57 days in filing of this appeal. The assessee has filed an affidavit explaining that the delay was caused due to pre-occupation of his Accountant Shri Mehul Jayantilal Shah who was busy in finalization of accounts and filing tax returns. Further, the assessee was also not available and was out of country for a considerable period of time due to which he could not monitor the timely filing of the appeal. An affidavit of Shri Mehul Jayantilal Shah, the Accountant of the assesse, has also been filed. Considering the explanation of the assessee, the delay in filing of the appeal is condoned.

3. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2015-16 on 30.03.2016 declaring total income of Rs.45,46,760/-. The case was selected for limited scrutiny under CASS. The assessee had purchased a land during the year vide sale deed dated 10.03.2015 for a consideration of Rs.10,28,28,600/-. In the course of assessment, the AO found that at the time of registration of the property the assessee had paid additional stamp duty. It transpired that the matter was referred to the Deputy Collector for valuation of the property, who had valued the property at Rs.12,79,67,530/- and accordingly the assessee had paid additional stamp duty as per the revised valuation. The AO, thus, noted that the stamp duty value of the property was Rs.12,79,67,530/-, whereas the consideration paid as per sale deed was Rs.10,28,24,000/- only. The AO, therefore, added the difference amount of Rs.2,51,39,530/- as income of the assessee under the provision of Section 56 (2)(vii)(b)(ii) of the Income Tax Act, 1961 (in short ‘the Act’).

4. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided vide the impugned order. The Ld. CIT(A) has allowed part relief to the assessee and the addition u/s. 56(2)(vii)(b)(ii) of the Act was restricted to Rs.1,28,54,000/- on the basis of the report of the DVO.

5. Now, the assesse is in second appeal before us. The following grounds have been taken in this appeal:

“1. That the ld. CIT(A) has erred in upholding addition to the tune of Rs.1,28,54,000/- being difference in purchase price of the land and value of land as per valuation officer. That the ld. CIT(A) should adopt value of land as per registered sale deed in view of the special facts that land was in green belt. Therefore the addition for Rs.1,28,54,000/- as confirmed by Ld. CIT(A) be deleted.

2. The appellant craves leave to add, alter or amend any of the grounds of appeal before final hearing of appeal.”

6. Shri Hardik Vora, Ld. AR appearing for the assessee submitted that the land was originally taken possession by Dayalbaug Co-op. Housing Society on the basis of Banakhat dated 15.07.1964 executed by one Sh. Laxmichand Rugnath Patel and on payment of Rs.1,41,600/-. However, the land was in green belt and hence, it was not possible to convert the land in NA. Therefore, the society could not have purchased the above land as only an agriculturist can buy the agricultural land. Due to this reason, Dayalbaug Co-op. Housing Society had signed the sale deed as a confirming party. As regarding merits of the addition, the Ld. AR submitted that the assessee had objected to the proposed addition by the AO on the ground th