TMI Blog2019 (5) TMI 1834X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the AO that stamp valuation of the property sold was not its fair market value , it was the bounden duty of the AO to have made reference to the Valuation Officer which, for the reasons not borne on records, was not made. AO not only passed a cryptic order without disputing any of the grounds of dispute raised by the assessee but also failed to follow the procedure prescribed in law i.e. making of a reference to the DVO as mandated by section 50C (2) of the Act. Therefore, the addition made by the AO cannot be approved. In the present case, it is noted that neither the Assessing Officer nor the Ld. CIT(A) appreciated the contentions raised by the assessee while adopting the the stamp duty value as fair market value of the property purchased nor referred the matter to the DVO as was required U/s 50C(2) of the Act. The AO has also not found or alleged with any corroborative material evidence that the assessee has paid any excess amount over the sale consideration mentioned in the sale deed. Considering the factual Matrix and binding legal decisions, the findings of ld. the CIT(A) in confirming the addition made by the AO can not be approved. In our considered onion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 All these grounds pertain to the addition made by the AO u/s 56 (2) (vii) (b) (ii) amounting to ₹ 25, 65,000/ -. The appellant has submitted that the provisions of section 56 (2) (vii) (b) (ii) shall apply only to a person who receives any property but not to a case of purchase. The appellant has also referred to a few court cases to argue that stamp value should not be taken as sale value. I have considered the appellant s arguments as quoted earlier and in my opinion, the arguments put forward by him do not have any force. From a plain reading of the provisions, it is clear that section 56 (2) (vii) (b) (ii) would apply to a situation where any immovable property is received for a consideration. When we read the whole phrase received for a consideration it clearly indicates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections. . Section 56(2)(vii)(b) is consequential to section 50C. According to sub section (2) of section 50C if the assesse claims before the Assessing Officer that the value adopted by the stamp valuation authority exceeds the fair market value than the Assessing Officer may refer the valuation of the capital asset to the valuation officer. Reliance in this regard is on the judgment of Hon ble ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 the property under consideration deserves to be deleted. 5. Per Contra, the ld. DR relies on the impugned order. He prayed that matter may be restored to the AO so as to enable it to fill the lacunae and shortcomings of ascertaining actual value of transaction by getting DVO report. 6. Heard both the parties, perused the records and considered the cases cited before the Bench. 7. From the records we note that the assessee, in response to a show cause notice by the AO, the assessee submitted that, he had purchased the subject property for a total consideration of ₹ 10,00,000/- vide registered sale deed as per Para1, Pg. 3 of the Assessment order. It is evident that the AO merely adopted total value of the property as per circle rates sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 to the DVO under Section 55-A of the Act as a matter of course, without considering the report of approved valuer submitted by the assessee. The Hon ble High Court further held that Section 50-C of the Act is a rule of evidence in assessing the valuation of property for calculating the capital gain. The deeming provision under Section 50 C (1) of the Act is rebuttable. It is well known that an immovable property may have various attributes, charges, encumbrances, limitations and conditions. The Stamp Valuation Authority does not take into consideration the attributes of the property for determining the fair market value in the condition the property is a offered for sale and is purchased. He is required to value the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, 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 of setting aside an assessment are large and wide, but these cannot be exercised to allow the AO an opportunity to patch up the weak part of his case and to fill up the omission. In my opinion, a party guilty of remissness and gross negligence is not entitled to indulgence being shown. In this context, I would like to make a reference to a decision of the Chennai Bench of the Tribunal in the case of Tatia Skyline Health Farms Ltd. vs. Asstt. CIT (2000) 66 TTJ (Chennai) 203 : (1999) 70 ITD 387 (Chennai). In this decision, on the assessee s request that the case be sent back to the AO for another round of enquiry and fresh assessment in accordance with law. the Bench, rejecting the assessee s request has held that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 with a view to sustain the addition. This will amount to taking sides with the parties which is not the function of a judicial authority like the Tribunal. 18. The Hon ble Supreme Court also in the case of Parusram Pottery Works Co. Ltd Vs. ITO , 106 ITR 0001 (SC)] observed as follows It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become wellversed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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