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2025 Supreme(Online)(ITAT) 6172
INCOME TAX APPELLATE TRIBUNAL (NAGPUR BENCH)
K.M. ROY, A.M.
Yashoda Builders And Developers – Appellant
Versus
Asstt. Commissioner of Income Tax – Respondent
ITA no.302/Nag./2024
For the Appellants/Petitioners: Shri Kishore P. Dewani
For the Respondents: Shri Abhay Y. Marathe
The Tribunal established that additions under section 43CA are impermissible when the difference in declared sale consideration and the assessed fair market value is less than 10%, upholding the principle of tolerable discrepancies.
Headnote:(A) Income Tax Act, 1961 - Sections 43CA, 234A, 234B and 234C - Appeal against the order of the Commissioner of Income Tax (Appeals) confirmed addition of Rs.45,08,931/- based on valuation report - The addition was held unjustified as it fell within the tolerance band of 10% provided for between the declared sale consideration and stamp duty value, therefore no addition warranted under section 43CA. (Paras 6 and 16)
(B) Natural Justice - Summary dismissal of appeal by CIT(A) without considering merits violates principles of natural justice. (Para 2)
Facts of the case:
The assessee challenged additions made by the Assessing Officer under section 43CA amounting to Rs.45,08,931/-, and Rs.1,40,080/- in relation to the sale of plots, arguing these additions were not supported by credible evidence and fell within a tolerable band of estimation. The delay in appeal filing was condoned due to reasonable cause. Findings of the Court: The Tribunal allowed the appeal, quashing the additions, due to the inadequacy of supporting valuation evidences and their fitting within the applicable tolerance bands in accordance with established judicial precedents.
Issues: Whether the additions made under section 43CA based on the valuation were justified or within a permissible tolerance band.
Ratio Decidendi: The Tribunal ruled that where the difference between the declared sale consideration and valuation is less than permissible limits as stated in judicial precedents and legislation, it cannot be the basis for income addition.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. context and background of the assessment appeal. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. arguments presented by the assessee against additions. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 3. court's evaluation and rationale for judgment. (Para 13 , 14 , 15 , 16) |
| 4. final result and order of the court. (Para 17) |
ORDER
PER K.M. ROY, A.M.
The captioned appeal filed by the assessee is emanating from the impugned order dated 15/09/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18.
2. Following grounds have been raised by the assessee:–
“1. The order passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre dated 15/09/2023 u/s 250 of I.T. Act 1961 is illegal, invalid and bad in law.
2. The learned CIT(A) has dismissed the appeal summarily without considering the merits of grounds on the basis of evidence on record. The order passed by CIT(A) is in violation of principles of natural justice.
3. The order passed u/s 143(3) of I.T. Act 1961 is illegal, invalid and bad in law.
4. The addition made by A.O. and upheld by CIT(A) at Rs.43,68,851/- u/s 43CA of I.T. Act 1961 in respect to Wanadongri Project is unjustified, unwarranted and bad in law.
5. The learned A.O. erred in making addition and upheld by CIT(A) at Rs.43,68,851/- on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961.
6. The addition made by A.O. and upheld by CIT(A) at Rs.1,40,080/- u/s 43CA of I.T. Act 1961 in respect to Plot No.270 is unjustified, unwarranted and bad in law.
7. The learned A.O. erred in making addition and upheld by CIT(A) at Rs.1,40,080/- u/s 43CA of I.T. Act 1961 on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961.
8. The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive.
9. Any other ground that shall be prayed at the time of hearing.”
3. During the course of hearing, the Registry has pointed out that there is a delay of 183 days in filing the present appeal by the assessee before the Tribunal. While going through the record, we find that the assessee has furnished an application for condonation of delay and affidavit in support of the application and requested to condone the delay. Considering the facts in the application for condonation of delay along with the averments made in the affidavit, we are of the opinion that the assessee is prevented in filing the appeal belatedly and we are satisfied that the delay in filing the appeal is due to reasonable cause. Consequently, we condone the delay of 183 days in filing the present appeal and admit the same for adjudication on merit.
4. Grounds No.1 to 7, raised by the assessee relates to the addition of ‘ 45,08,931, under section 43CA of the Income Tax Act, 1961 ("the Act") made by the Assessing Officer.
5. Facts in Brief:- The Assessing Officer made addition of ‘ 45,08,931 under section 43CA on the basis of report of Valuation Officer and ready recknor value of plot sold.
6. On appeal, the learned CIT(A) confirmed the order of the Assessing Officer.
7. Before us, the learned Counsel for the assessee furnished a gist of submissions in respect of grounds no.1 to 7, is reproduced hereunder for ready reference:–
“A.O. Page 2
CIT(A) Page 3 - 5
1. Delay in filing of appeal is of 183 days. It was mistake in the office of counsel of assessee. Affidavit of employee of counsel is submitted along with application for condonation of delay.
Reliance on:
i) ITA T Order in ITA Nos.253 & 254/Nag/2018 in the case of M/s Western Coalfields Ltd. vide order dated 21/01/2020.
2. The addition of Rs.43,68,851/- u/s 43CA
A) Sale proceeds of plots sold is at Rs.2,99,28,549/- and value determined by D.V.O
