2022 (9) TMI 332 - AT - Income Tax

Addition u/s.56(2)(vii)(b)(ii) - difference between guideline value of the property and consideration paid for purchase of property - HELD THAT - The facts borne out from the record are indicate that the assessee had purchased property along with co-owner, Mr.C.R.Rajaram, for a consideration of Rs.36 lakhs and the guideline value of the property as per the stamp duty authorities was at Rs.68,03,167/-. AO has made addition u/s.56(2)(vii)(b)(ii) of the Act, towards difference between guideline value and consideration paid for purchase of property as unexplained investment. CIT(A) has sustained the additions made by the AO. We find that similar addition has been made in the hands of co-owner, Mr.C.R.Rajaram, and appeal filed by the co-owner, is pending before the Ld.CIT(A). When the very same issue is considered in the hands of the two assessees on the issue of difference between guideline value and consideration paid for purchase of property as per the provisions of Sec.50C of the Act, in our considered view, the appeals filed by both the assessees needs to be decided simultaneously, because, the decision taken in one case may have bearing on the other appeal filed by the co-owner. Since the appeal filed by the co-owner is pending before the CIT(A), we deem it appropriate to set aside this appeal filed by the assessee to the file of the CIT(A) and direct the CIT(A) to decide both the appeals simultaneously and decide the issue involved in the appeals in accordance with law. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against CIT(A) order for AY 2014-15 - Addition u/s.56(2)(vii)(b)(ii) for unexplained investment - Difference between guideline value and consideration paid for property - Simultaneous decision with co-owner's appeal.

Analysis:
The appeal was filed against the CIT(A) order for the assessment year 2014-15, challenging the addition made under section 56(2)(vii)(b)(ii) of the Act for unexplained investment, specifically the variance between the guideline value and the consideration paid for the property. The assessee, an individual LIC agent, had purchased a property jointly with a co-owner for Rs. 36 lakhs, while the guideline value stood at Rs. 68,03,167. The AO added Rs. 34,01,584 as unexplained investment. The CIT(A) upheld the AO's decision. However, a similar addition was made in the co-owner's case, with the co-owner's appeal pending before the CIT(A). In light of this, the Tribunal decided to set aside the current appeal and directed the CIT(A) to simultaneously consider and decide both appeals to ensure a consistent decision. The Tribunal emphasized the need for coherence in addressing the issue of the variance between guideline value and consideration paid for the property, as it could impact both parties involved. Therefore, the appeal by the assessee was allowed for statistical purposes, awaiting a joint decision with the co-owner's appeal.

This detailed analysis showcases the legal intricacies involved in the case, emphasizing the importance of a synchronized approach in addressing the shared issue affecting multiple parties. The Tribunal's decision to defer the current appeal and await a joint decision with the co-owner's case highlights the significance of consistency and fairness in legal proceedings, ensuring equitable treatment for all parties involved.