9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 896 - AT - Income TaxApplicability of provisions of Section 56(2)(vii)(b) - excess of the purchase consideration - income from other sources - market value of the property at village Khera Kalan is less than the circle rate - difference between the purchase cost shown by assessee and as reported by DVO - Held that - matter requires reconsideration at the level of the A.O. The assessee filed objections before A.O. on 28.12.2016 objecting to the report of the DVO. The assessee also explained before Ld. CIT(A) guidelines of Directorate of the Department which have not been followed by the DVO. Several instances of the lesser cost were furnished which have not been considered by the DVO. The assessee pointed out the defects and deficiencies in the report of the DVO which have not been considered by the A.O. The assessee also furnished reports from two registered valuers who have reported lesser value. These facts, therefore, show that the A.O. instead of referring the objections of the assessee to the DVO, has passed the order within two days of receipt of the objections from the side of the assessee. The course adopted by the A.O. is not permissible and is clearly denial of principles of natural justice as well. - Appeal of assessee is allowed for statistical purposes.
Issues: Assessment under Section 56(2)(vii)(b) of the Income Tax Act based on the variance between purchase cost and fair market value of immovable property.
Analysis: 1. The appeal was filed by the assessee against the order of the Ld. CIT(A)-12, New Delhi, for the A.Y. 2014-2015. The case involved the purchase of an immovable property in Delhi for a significantly lower amount compared to the circle rate, triggering the application of Section 56(2)(vii)(b) of the Income Tax Act. 2. The Assessing Officer (A.O.) referred the matter to the Valuation Officer to determine the fair market value of the property. The Valuation Officer assessed the value at a higher amount than the purchase cost, leading to the addition of the variance to the assessee's income. The assessee challenged this addition before the Ld. CIT(A), arguing that the valuation report had deficiencies and did not consider relevant evidence provided by the assessee. 3. The Ld. CIT(A) dismissed the appeal, prompting the assessee to appeal further. The assessee contended that the A.O. did not adequately consider their objections to the valuation report and requested a remand for proper consideration. The A.O. had passed the order swiftly after receiving the objections, without giving due consideration to the points raised by the assessee. 4. Upon considering the submissions, the Judicial Member observed that the A.O. had not followed due process and denied the principles of natural justice by not adequately addressing the objections raised by the assessee. The Judicial Member set aside the orders of the authorities below and directed the A.O. to reconsider the matter, giving the assessee a reasonable opportunity to present their case and have their objections considered by the Valuation Officer. 5. The Judicial Member allowed the appeal of the assessee for statistical purposes, emphasizing the importance of following proper procedures and providing a fair opportunity for the assessee to be heard. The decision highlighted the significance of adherence to principles of natural justice in tax assessments and the need for thorough consideration of objections raised by taxpayers in such matters.
|
