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TMI Blog2023 (8) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... al who has filed return of income for AY. 2018-19 on 02.06.2018 declaring total business income at Rs. 3,75,690/- u/s 44AD of the Act. Later, the case was selected for manual scrutiny. The AO noted that the assessee had entered into a transaction involving purchase of immovable property ("Flat No. 15/D/002, Ground Floor, Jay Hind 15/D. S.R.A Sahakarigrihanirm Ansanstha Maryadit, Chandivali, Mumbai") (hereinafter "the flat") showing purchase consideration of Rs. 19,50,000/- on which he had incurred stamp duty of Rs. 2,37,980/-. The AO noted that the circle rate of the flat in question (as per the Stamp Valuation Authority) was Rs. 41,34,330/-. Therefore, the AO confronted the assessee as to why the difference should not be brought to tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locality may fetch higher price that doesn't mean that assessee has purchased the flat in question at a higher price and therefore circle rate cannot be applied in assessee's case. And for supporting his claim, he also filed before AO the copy of the report from registered valuer of his flat which is found placed at page no. 87 to 104 of PB. From the discussion, it is noted that before the AO the assessee had objected to the AO's proposal to bring to tax (the difference between the valuation made by the Stamp Authority and the consideration paid by the assessee) and pursuant to which, the assessee had submitted along with the letter dated 25.03.2021, the Valuation report of the Departmental registered valuer (who is in the panel of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andivali, Milind Nagar, Powai, Mumbai-400072. Of Mr. Manohar Mandanlal Paliwal. Works out to, Rupees Twenty Lakhs Twenty Five Thousand Five Hundered Sixteen only. (Rs. 20,25,516.00)." 5. It has been brought to my notice that the difference between the value as per the Valuation Report (supra) and the sale consideration/agreement value (Rs. 19.50 Lakhs) does not exceeds 5%. In such a scenario, it was urged that, no addition warranted. After hearing both sides, I am of the opinion, that before making addition applying provision of section 56(2)(vii)(b) of the Act, in the facts and circumstance of the case, the Assessing Officer ought to have referred the matter to the Valuation Officer (DVO), since the Assessee objected for the value t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the case in hand and judicial precedent, I am not inclined to countenance the action of the Ld. CIT(A) in confirming the addition made by the AO. And also not accept the Ld DR's request to restore the matter back to AO for referring the valuation of flat to DVO because that will tantamount to condoning the erroneous action of AO and consequently allowing a second inning for no fault of assessee. This would tantamount to breathing fresh life to an order which on the facts on records exposes the arbitrary and whimsical action of AO and so is unsustainable in law. Therefore, the addition made by AO to the tune of Rs. 21,84,330/- u/s 56(2)(vii)(b) is directed to be deleted. 8. In the result, the appeal of the assessee is allowed. Order pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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