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2014 (7) TMI 807 - AT - Income TaxReference made to DVO sale of property - adoption of value as per stamp value u/s 50C - applicability of provision of section 50C to section 69 - Held that - Procedure as per sec. 50C is to be adhered in its totality which mandated that in the event of dispute by the assessee as to the adoption of value as per SRO, a reference to be made by the AO to the valuation cell - The decision in ITO vs. Shri Harinath Choudary 2014 (4) TMI 399 - ITAT HYDERABAD followed - the AO should have referred the issue of valuation to the valuation officer as per the provisions of section 50C(2) Decided in favour of Assessee. Addition u/s 68 and 69 Unexplained deposits in bank account Held that - The extract of accounts that there is opening balance of ₹ 15 lakhs as on 1.4.2008 and cheque for ₹ 20 lakhs was received on 3.4.2008 - The total amount of ₹ 35 lakhs was accounted in the books of account - the amount of ₹ 20 lakhs was received by cheque and the creditor has confirmed by a letter of confirmation that he has given that amount and the creditor is also an assessee of income-tax, PAN have been given to the AO by the assessee, the AO is not justified in making the addition of ₹ 20 lakhs as cash credit - considering the explanation given by the assessee that the person who had given the credit has passed away on 28.7.2011 and could not be produced before the AO and the CIT(A) - the AO is not justified in making the addition and the CIT(A) also erred in confirming the addition of ₹ 20 lakhs Decided partly in favour of Assessee.
Issues:
1. Addition of unexplained deposits in bank account. 2. Addition made on the ground of difference in sale price and value shown as per records of Sub-Registrar. 3. Applicability of section 50C in the case of the assessee. 4. Confirmation of addition of amount received from a creditor. Analysis: Issue 1: Addition of unexplained deposits in bank account - The Assessing Officer made an addition of &8377; 9,25,860 towards unexplained deposits in the bank account. The CIT(A) deleted this addition after considering the assessee's explanation. Issue 2: Addition on the ground of difference in sale price and value shown as per records of Sub-Registrar - The Assessing Officer made an addition of &8377; 1,36,000 based on the difference in sale price and the value recorded by the Sub-Registrar. The CIT(A) sustained this addition, stating that the assessee admitted to the difference in sale price and the rate of the Asst. Registrar. The ITAT directed the AO to refer the valuation matter to the valuation officer as per section 50C(2). Issue 3: Applicability of section 50C in the case of the assessee - The ITAT held that the AO should have referred the valuation issue to the valuation officer as per the provisions of section 50C(2) in a case where the assessee disputes the value adopted by the Stamp Valuation Authority. Issue 4: Confirmation of addition of amount received from a creditor - The CIT(A) confirmed the addition of &8377; 20 lakhs out of the total addition of &8377; 35 lakhs made by the Assessing Officer. The ITAT, however, found that the assessee had received the amount through a cheque, and the creditor, who had passed away, was an income-tax assessee. The ITAT held that the addition of &8377; 20 lakhs was not justified, and the appeal was partly allowed for statistical purposes. This judgment highlights the importance of following procedural requirements, such as referring valuation matters to the valuation officer under section 50C(2) and considering all relevant evidence before making additions to the income of an assessee.
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