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TMI Blog2019 (5) TMI 1834X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) should have deleted the addition. 3. Because considering the facts of the case and the legal position the addition of Rs. 25,65,000/- made by the Assessing Officer and confirmed by Ld. CIT(A) deserves to be deleted. " 2. The sole issue , the assessee has challenged is that the Ld. CIT(A) has legally erred in confirming an addition of Rs. 25,65,000/- by the Assessing Officer, adopting value of property at circle rates, by applying the provisions of section 56(2)(vii)(b)(ii) ignoring the proviso to sub clause (c) of subsection (2)(vii) of section 56 of the Income Tax Act, 1961 (In short "the Act"). 3. Facts of the case are that for the Assessment Year under consideration, the appellant assessee had purchased a property for the consideration of Rs. 10,00,000/- as against the value of Rs. 35,65, 000/- determined for stamps duty purpose as per sale deed dated 31.07.2013. The AO has applied the provisions of section 56(2)(vii)(b)(ii) to added the difference amount of Rs. 25,65,000/- to the total income of the assessee. 3.1 Being aggrieved, assessee carried the matter in appeal before the Ld. CIT(A) who confirmed the addition observing vide para 5.2 as under - "5.2 Decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies (APB, Pg. 1). For this purpose, he relies on the Jurisdictional Hon'ble High Court in the case of "CIT vs. Smt. Raj Kumari Vimla Devi", (2005) 279 ITR 360 (All HC). He has filed a synopsis and a paper book of 66 pages. The relevant part of the synopsis is extracted here under: "Referring to the relevant pages and para of the assessment order, Ld. CIT(A) Order and the paper book, the appellant most respectfully submit: - In the year under consideration, the appellant had purchased an immovable property for a consideration lower than the value determined for stamp purposes. The AO had applied the provisions of section 56(2)(vii)(b) and added the difference of Rs. 25,65,000\- to the total income without bringing any adverse material evidence to indicate that the assessee has paid any excess money over and above the purchase consideration as shown. The addition was disputed in the appeal before Ld. CIT(A) who dismissed the appeal. Finding of Ld. CIT(A) Page 5 Para 5.2 Proviso after sub clause (c) to section 56(2)(vii)(b) reads as, "Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case addition was made under section 56(2)(vii)(b). In the absence of the reference to the valuation officer, the Hon'ble ITAT held the addition to be invalid. Further, the Hon'ble ITAT also rejected the request of the Department to set aside the matter to the file of the Assessing Officer for referring the case to the Valuation Officer. (ii) Hon'ble ITAT, Agra bench in the case of Dr. Sanjay Chobey HUF (iii) Hon'ble ITAT, Mumbai bench in the case of Ajmal Fragnances & Fashions (P) Ltd. (iv) Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal Vs. Cff reported in 372 ITR 83 (v) Hon'ble ITAT, Pune bench in the case of K.K. Nag Ltd. Vs. Addl CFF reported in 52 SOT 381 (vi) Hon'ble ITAT, Delhi bench in the case of Anil Kumar Jain Vs. ITO reported in 143 ITD 659 Thus, in view of the above referred judicial pronouncements and under the factual matrix it can be said that the Ld. AO has completely overlooked the Proviso to section 56(2)(vii) which is wrong, incorrect and unwarranted and hence the addition of Rs. 25,65,000/- u/s 56(2)(vii)(b) of the Act on account of difference between value of property as per stamp valuation and value as per purchase deed of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to the Valuation Officer which, for the reasons not borne on records, was not made. 10. Hon'ble Allahabad High Court in the case of CIT Vs Chandra Narain Chaudhary in ITAT No.287/2011 vide Judgment dated 29.08.2013 in a case, though having different facts where assessee therein had filed more than one valuation Report , in the context of section 50C of the Act, held that "whenever objection is taken or claim is made before AO, that the value adopted or assessed or assessable by the Stamp Valuation Authority under sub-section (1) of Section 50-C exceeds the fair market value of the property on the date of transfer, the AO has to apply his mind on the validity of the objection of the assessee. He may either accept the valuation of the property on the basis of the report of the approved valuer filed by the assessee, or invite objection from the department and refer the question of valuation of the capital asset to DVO in accordance with Section 55-A of the Act. In all these events, the AO has to record valid reasons, which are justifiable in law. He is not required to adopt an evasive approach of applying deeming provision without deciding the objection or to refer the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and fair play. Objection that the assessee did not request for making reference to the valuation cell, suffice would be to observe that assessee has no obligation to instruct the AO to follow the law. 15. Deciding similar issue, ITAT, Hyderabad in the case of ACIT V. Lalitha Karan, ITA No. 1130/Hyd/2015, order dated 04/01/2017 (copy placed in assessee's compilation on Pgs. 7 - 15) has observed in para 7.1 - "when deeming provision was to be invoked, the same has to be construed strictly and it has to be taken to its logical conclusion i.e. upon not following the proper procedure prescribed therein, particularly, in the backdrop of the fact that the assessee has prima-facia shown that it was a tenanted property and, therefore, subject to certain encumbrances and also the fact the in the absence of obtaining a DVO's report, asssessee cannot be put to the trouble of facing a virtual trial even after five years of appearing before AO/DVO at this stage to prove the sale price declared by her is reasonable." 16. In the case of ACIT Vs Anima Investment Ltd [ 73 ITD 0125] Third Member, ITAT, Delhi observed in para 13 of the order as under - "The powers of the Tribunal in the matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment framed by the Assessing Officer and whether the appellate order appealed against was according to law and properly framed on facts and whether there was sufficient material to support it. When there is no material to support it and when as observed by the learned Accountant Member the additions made by the Assessing Officer could not be sustained, it is not for the Tribunal to start investigations suo-moto and supply the evidence for the Department. If the additions are not supported by evidence, the only course open to the Tribunal is to delete the additions pointing out how the additions made could not be sustained for want of adequate supporting material. It is for the Department to gather the material and make proper assessments and the Tribunal is not in that fashion an IT authority. Under the IT authorities stipulated under the IT Act, the Tribunal is not one of them. It is purely an appellate authority. Therefore, the object of the appeal before the Tribunal is whether the addition or disallowance sustained was in accordance with law and supported by material. If there is no sufficient material, the addition must be deleted. The Tribunal cannot order further enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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