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2023 (8) TMI 1335 - AT - Income TaxAddition u/s 56(2)(vii)(b) - Purchase of immovable property below circle rate / stamp value - difference between the value as per the Valuation Report and the sale consideration/agreement value - non reference of matter to DVO - HELD THAT:- As before making addition applying provision of section 56(2)(vii)(b) in the facts and circumstance of the case, AO ought to have referred the matter to the Valuation Officer (DVO), since the Assessee objected for the value to be taken according to the stamp valuation authorities. In the present case, the AO has made addition u/s 56(2)(vii)(b) without making reference to the valuation officer as required by proviso under sub clause (c) of section 56(2)(vii)(b). In this context, it is gainful to refer to the decision of ITO Vs. Aastha Goel [2018 (10) TMI 500 - ITAT DELHI] wherein addition was made under section 56(2)(vii)(b) and it was held that in the absence of the reference to the valuation officer, the addition made was deleted. 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. We not accept the 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 u/s 56(2)(vii)(b) is directed to be deleted. Decided in favour of assessee.
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