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2022 (7) TMI 274 - AT - Income TaxAddition u/s 56(2)(vii)(b) - differential amount between the value as determined by DVO and the purchase price - Mandation of referring matter to DVO for valuing the property - Whether AO has erred and acted illegally in adopting the circle value without invoking the provision of Section 52C(2)(sic.50C(2))? - DR submitted that he has no objection if the matter is restored to the file of A.O. for denovo adjudication of the issue on merits in accordance with law, after referring the matter to DVO, so that additions can be made under section 56(2)(vii)(b) read with Section 50C(2) - HELD THAT:- The Hon’ble Allahabad High Court in the case of CIT, Allahabad & Another v. Sh Chandra Narain Chaudhri (2013 (9) TMI 646 - ALLAHABAD HIGH COURT] has observed and held that it is incumbent on the A.O, in such a case where the assessee disputes the valuation, to refer the matter to DVO, before additions can be made by AO. CIT(A) has not decided appeal on merits, but, has dismissed the appeal in limine without discussing the issue on merits, which is an infringement of Section 250(6) and hence in any case the appellate order passed by CIT(A) is not sustainable in the eyes of law. The assessee is also equally responsible for its woes, as the assessee has not appeared before Learned CIT(A) despite as many as seven opportunity of hearings being granted to the assessee by CIT(A). Even before Learned A.O. there was no proper compliances made by the assessee. D.R. has fairly submitted before us that the matter can be restored to the file of A.O. for fresh adjudication on merits in accordance with law, after referring the matter by AO to DVO in set aside remand proceedings for valuing the property purchased by the assessee, so that correct and proper assessment can be made. We are of the considered view that the matter can be restored to the file of A.O. for fresh determination of the issue on merits in accordance with law, after referring the matter to DVO by AO in set aside remand proceedings, for submission of valuation report by DVO of the property purchased by the assessee, and accordingly based on the valuation report of DVO, the differential amount between the purchase price and value as determined by the DVO can be brought to tax by AO in set aside remand proceedings, under section 56(2)(vii)(b) - Appeal of the assessee is allowed for statistical purposes.
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