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INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Beena Pillai, J
Nivruti Mahadev Ghadge – Appellant
Versus
Income Tax Officer Ward 22(2)(1) – Respondent
Income Tax Appeal | AY: 2018-19
For the Appellants/Petitioners: Mr. Dharan Gandhi
For the Respondents: Ms. Pradnya Gholap, Sr. DR
The retrospective application of property valuation statutes must align with historic agreement terms and actual transfer evidence.
Headnote:Statutory Analysis indicates the applicability of sections 50C and 56(2)(x) of the act regarding property valuation. The appellant, an individual and proprietor of a business, declared income but faced dispute over property valuation involving stamp duty. The court found the assessment using higher stamp duty value was inappropriate based upon historic agreement terms. The crucial ground assessed was the legitimacy of property transfer timing. The court ruled in favor of the appellant regarding the disputed property valuation and ordered deletion of the addition made by the Assessing Officer as grounds raised by the appellant were allowed.
| Table of Content |
|---|
| 1. facts surrounding the assessment year and appellant's income declaration. (Para 1 , 2 , 3) |
| 2. arguments asserting the appraisal of property valuation measures. (Para 4) |
| 3. court's observations on the sufficiency of property transfer documentation. (Para 5) |
| 4. final ruling allowing the appeal and dismissing previous addition assessments. (Para 6) |
ORDER
PER BEENA PILLAI, JM
Present appeals filed by the assessee is against order dated 27/12/2023 passed by NFA Delhi for assessment year 2018-19 on following grounds of appeal:
1. The assessment order dated 07.04.2021 is bad in law and without jurisdiction as the same has been passed under section which were no longer applicable.
2. The Ld. CIT(A) has erred in confirming the addition made by the Ld. AO of Rs. 39,45,128/- u/s 56(2)(x) of the Act.
3. The order passed by the Ld. CIT(A) and the Ld. AO are without considering the detailed submissions filed and the documentary evidences relied upon and therefore, both the orders are bad in law and liable to be set aside.
4. The Ld. AO erred in initiating penalty proceeding u/s 274 r.w.s 270A of the Act, vide letter dated 07.04.2021.
5. The Ld. AO, has erred in the levying interest under section 234B of the Act.
Brief facts of the case are as under:
2. The assessee is an individual and proprietor of M/s. Naveen Enterprises. He filed his return of income on 30/08/2080 declaring ₹ total income of 5,44,170/- for the year under consideration. The return was processed under section 143 (1) of the act and was selected for scrutiny. The Ld.AR accordingly issued notice under section 143 (2) and 142 (1) of the act calling upon assessee to furnish various details.
2.1 The Ld. AO observed that, assessee during the year under consideration purchased immovable property for consideration of ₹ 7,50,000/-. Subsequently, the said property was registered with ₹ the sub-registrar of Mumbai on 23/03/2018 at a value of 39,45,128/- being the stamp duty value as on that date. As the stamp duty value for the property as on the date of registration per was more than the agreement value, the Ld. AO invoked provisions of section 50 C read with section 56 (2) (x) of the act.
2.2 After considering the submissions of the assessee the Ld. AO rejected the same and made addition in the hands of the assessee ₹ under section 56 (2) (x) of the act, amounting to 39,45,128/-. Aggrieved by the order of the Ld. AO assessee preferred appeal before the Ld. CIT(A)
3. Before the Ld. CIT(A), assessee submitted that during financial year relevant to assessment year under consideration, the assessee registered immovable property on 23/03/2018 that was purchased ₹ for consideration of 7,50,000/- on 09/10/2006. He submitted, that an agreement was entered into by assessee with the vendor vide agreement dated 19/10/2006, transferring the possession and all rights, title and interest in the said property to the assessee. He submitted that the entire sale consideration was paid by the assessee to the vendor in the year 2006 when the agreement was executed. The assessee submitted that, the registration of the agreement took place on 23/03/2018.
3.1 The Ld. CIT(A) after considering the submissions of the observed as held as under:
“5.2 The addition made by the Assessing Officer and the submissions of the appellant have been perused. It is seen from the assessment order that the appellant purchased an immovable property for a consideration of Rs.7,50,000/- and the stamp duty for the purpose of Section 50C read with Section 56(2)(x) of the Act is Rs.39,45, 128/-. It is a fact that the appellant paid stamp duty of Rs.1,97,500/- on the value of Rs.39,45, 128/- and had not disputed the stamp duty value before the stamp valuation authorities. The appellant filed copy of agreement for sale during appeal proceedings. The said agreement is stated to be entered on 19th October, 2006 between Khodabhai Dhudabai Gohil and the appellant Mr.Nivruti Mahadev Ghadge for purchase of tenement i.e. Room No.104 sit
