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2024 (2) TMI 1281 - AT - Income TaxIncome from other sources u/s 56 (2) (x) - difference between the valuation adopted by the district valuation officer and actual consideration - Onus to prove on-money transaction - assessee has purchased the property for a consideration which is less than the value determined by the learned departmental valuation officer - HELD THAT - There is no provision in the act that before invoking the provisions of section 56 (2), the AO or the CIT-A should prove with evidence that there is a transaction of on money and then only addition can be made. It is an anti avoidance provision. Therefore, such argument deserves to be rejected. Whether observation made by the learned registered valuer were not at all considered by the lower authorities i.e. CIT A? - The preliminary valuation report was also submitted to the assessee and an opportunity was given for submitting the objection. Assessee submitted objection and it were considered by the learned DVO. Thus in view of the independent sale instances of similar sale consideration, it cannot be said that the report of the learned DVO suffers from any infirmity. As nothing was pointed out before the learned CIT A that the valuation report prepared by the learned TPO suffers from any infirmity, it cannot be said that the learned CIT A has blindly accepted the report of DVO. We have considered the submission made by the assessee on 27/3/2023 to the CIT A placed at page number 48 67 of the paper book to reach at this conclusion. In view of the above facts, we do not find any infirmity in the order of the learned CIT A in making the addition to the total income of the assessee being the difference between the actual consideration and the valuation determined by the learned district valuation officer. Thus we, uphold the orders of the learned CIT A in confirming the addition under section 56 (2) (x) (b) (b) of the act as the assessee has purchased the property for a consideration which is less than the value determined by the learned departmental valuation officer in accordance with the provisions of section 50 C - Decided against assessee.
Issues Involved:
1. Addition of Rs. 25,886,000 on account of difference in property value determined by TPO and the value taken by the appellant under section 56(2)(x). 2. Confirmation of addition based on DVO's valuation under section 50C read with section 56(2)(x)(b). 3. Alleged denial of natural justice due to reliance on DVO's report without considering the appellant's evidence. 4. Request for admission of additional evidence due to insufficient opportunity to present the case. Summary: Issue 1: Addition of Rs. 25,886,000 on Account of Property Value Difference The assessee challenged the addition of Rs. 25,886,000, which was based on the difference between the property value determined by the TPO and the value declared by the appellant under section 56(2)(x). The property in question was purchased for Rs. 168,000,000, but the stamp duty value was Rs. 28,35,05,907. The DVO valued the property at Rs. 19,36,86,000, resulting in an addition of Rs. 11,55,05,907 under section 56(2)(x)(b). Issue 2: Confirmation of Addition Based on DVO's Valuation The CIT(A) confirmed the addition based on the DVO's valuation report dated 10/3/2023, which valued the property at Rs. 19,36,86,000. This was in contrast to the appellant's declared value of Rs. 168,000,000. The CIT(A) reduced the addition to Rs. 2,58,86,000 based on the DVO's report. Issue 3: Alleged Denial of Natural Justice The appellant argued that the CIT(A) erred in relying solely on the DVO's report without giving sufficient opportunity to present their case, including the government valuer's report. The appellant claimed that the valuer's report was not considered, and the DVO's report was accepted without scrutiny. Issue 4: Request for Admission of Additional Evidence The appellant requested the admission of additional evidence, arguing that they were not given a proper opportunity to present the true value of the property. The CIT(A) referred the matter to the AO for a remand report, which led to the valuation by the DVO. Judgment: The Tribunal found no merit in the appellant's arguments. It held that section 56(2)(x) is an anti-avoidance provision and does not require proof of on-money transactions. The DVO's report, which considered six instances of nearby property sales, was found to be credible and without infirmity. The Tribunal upheld the CIT(A)'s decision, confirming the addition based on the DVO's valuation. The appeal filed by the assessee was dismissed. Conclusion: The Tribunal upheld the CIT(A)'s order, confirming the addition under section 56(2)(x)(b) based on the DVO's valuation. The appeal by the assessee was dismissed, and the order was pronounced in the open court on 26.02.2024.
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