The tribunal held that no addition under section 43CA is warranted where the valuation difference is less than 10% of the actual sale price.

ORDER

PER K.M. ROY, A.M.

The present appeal has been filed by the assessee challenging the impugned order dated 31/05/2022, passed by the learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2017–18 and 2019–20.

ITA no.227/Nag./2022 Assessee’s Appeal – A.Y. 2017–18

2. In its appeal, the assessee has raised following grounds:–

“1. Reopening of the assessment and resultant assessment proceeding as completed is illegal, invalid violative of the principal of natural justice and deserve to be quashed as per law.

2. On the facts and circumstances of the case & in law, the learned AO has grossly erred and CIT (A) has grossly erred in confirming the addition of Rs. 57,68,020 as Income U/s 43CA of the Income Tax Act-1961 which is illegal and which deserves to be deleted in the interest of justice.

3. Assessee pray to kindly allow to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”

3. Insofar as the issue of re–opening of assessment under section 147 of the Income Tax Act, 1961 ("the Act") is concerned, before us, the learned Authorised Representative (“the A.R.”) did not make any argument. Consequently, the issue of re–opening of assessment in ground no.1, is dismissed.

4. Ground no.2, relates to addition of ` 57,68,020, on account of income under section 43CA of the Act.

5. Facts in brief:– The assessee filed its return of income for the year under consideration on 30/10/2017, declaring a total loss of ` (-) 1,06,13,791. A survey under section 133A of the Income Tax Act, 1961 ("the Act") was conducted at the premises of M/s. Tirupati Developers. Based on certain incriminating documents found and impounded during the survey operation, the case of the assessee was re–opened under section 147 of the Act after recording the reasons as required by section 148(2) of the Act and obtaining necessary sanction under section 151 of the Act. Accordingly, a notice under section 148 dated 12/02/2021, was issued and duly served upon the assessee through e-mail requiring it to furnish the return of income. In response to notice under section 148 of the Act, the assessee, vide its reply dated 12/03/2021, stated that to treat his return of income filed under section 139(1) on 05/10/2017, as return filed in compliance of the notice under section 148 of the Act. Accordingly, notice under section 143(2) was issued on 16/12/2021, and notices under section 142(1) of the Act were issued, calling for information to the assessee from time to time and served upon assessee. The Assessing Officer examined the impounded documents and found that page no.6 to 24 of Annexure A– 2/35 is copy of sale deed dated 31/05/2016 of land at Khasra no.83, Mouza Dongargaon, P.S.K. 73, having area of 2.63 hectares, Nagpur between the assessee and M/s. Tirupati Developers. As per the sale deed, value of the immovable property adopted by the stamp duty authority is ` 7.20 crore whereas the sale consideration paid by the assessee is only ` 3.50 crore, and thus there was a difference of ` 3.70 crore between the market value of the property adopted by Stamp Duty Authority and the actual sale consideration attracted the provision of section 43CA of the Act. Thus, the Assessing Officer completed the assessment vide order dated 24/03/2022, and has made the addition of ` 57,68,020, under section 43CA of the Act. The Assessing Officer has thus determined the total loss as ` (–) 48,45,771. Aggrieved by the assessment order, the assessee filed appeal before the first appellate authority. Aggrieved, the assessee carried the matter in app