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2020 (3) TMI 1199 - AT - Income TaxAddition being difference between the actual sale consideration and the stamp valuation of immovable property - deemed income u/s 56(2)(ii)(b ) - Non reference of matter for valuation to DVO HELD THAT - There is no dispute with regard to the fact that assessee had purchased immovable property and there was a difference of value as disclosed by the assessee and adopted by the Stamp Valuation Authority. It is also not a case where the assessee objected before the AO regarding valuation adopted by the Stamp Valuation Authority. The assessee first time made objection before the Ld. CIT(A) regarding valuation of the property. Since the Ld. CIT(A) has coterminous powers with the assessee officer, ought to have referred the matter for valuation to the Departmental Valuation Officer( in short DVO). Therefore, set aside this issue to the file of Ld. CIT(A) for deciding afresh after referring the matter to the DVO. The assessee would also be at liberty to file a valuation report if so advised. Assessee's Grounds allowed for statistical purposes.
Issues:
- Addition of &8377; 1,19,900 as deemed income u/s 56(2)(ii)(b) of the Income Tax Act. - Failure to obtain valuation report from a Valuation Officer for the property. - Applicability and interpretation of amended section 56(2)(x)(b) of the Income Tax Act. - Discrepancy between actual sale consideration and stamp valuation of immovable property. Issue 1: Addition of &8377; 1,19,900 as deemed income u/s 56(2)(ii)(b) of the Income Tax Act. The assessee's appeal contested the addition of &8377; 1,19,900 as deemed income due to the variance between the actual sale consideration and stamp valuation of an immovable property. The assessing officer added this amount to the assessee's income under section 56(2)(ii)(b) of the Act. The CIT(A) upheld this addition. However, the Tribunal found that the assessee had not raised objections to the valuation before the assessing officer, which should have been done. The Tribunal set aside the issue to the CIT(A) for fresh consideration, directing the matter to be referred to the Departmental Valuation Officer for valuation. The assessee was given the opportunity to submit a valuation report if desired. Issue 2: Failure to obtain valuation report from a Valuation Officer for the property. The Tribunal noted that the assessing officer did not obtain a valuation report from a Valuation Officer for the property in question, which is a requirement under section 56(2)(ii)(b) and the amended section 56(2)(x)(b) of the Act. This failure was considered a procedural lapse. The Tribunal directed the CIT(A) to refer the matter to the Departmental Valuation Officer for valuation and fresh consideration. Issue 3: Applicability and interpretation of amended section 56(2)(x)(b) of the Income Tax Act. The assessee argued that the amended section 56(2)(x)(b) of the Act, effective from April 1, 2019, should be applied retrospectively as it is beneficial. Citing various judgments, the assessee contended that curative amendments have retrospective effect. The Tribunal did not delve deeply into this issue but allowed the appeal for statistical purposes, indicating that the matter should be reconsidered by the CIT(A) after obtaining a valuation report. Issue 4: Discrepancy between actual sale consideration and stamp valuation of immovable property. The primary issue revolved around the discrepancy between the actual sale consideration and the stamp valuation of the immovable property purchased by the assessee. The assessing officer treated the variance of &8377; 1,19,900 as deemed income under section 56(2)(ii)(b) of the Act. The CIT(A) upheld this addition, leading to the appeal before the Tribunal. The Tribunal found that the assessee had not objected to the valuation before the assessing officer, prompting a remand of the issue to the CIT(A) for fresh consideration and valuation by the Departmental Valuation Officer. In conclusion, the Tribunal allowed the assessee's appeal for statistical purposes, directing a fresh consideration of the valuation issue by the CIT(A) after referring the matter to the Departmental Valuation Officer. The failure to obtain a valuation report and the procedural lapses in the assessment process were highlighted, emphasizing the importance of following proper procedures in such cases.
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