TMI Blog2022 (6) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... decision, we observe that in the similar set of facts, the Hon'ble ITAT has set aside the order passed by the learned Commissioner (Appeals) and remitted the matter back to him to decide afresh after considering the objections of the assessee to V.O's estimate as well as claim for benefit when the difference is less than 15%. At this stage, we would like to make it clear that this decision pertains to Section 50C of the act but that does not make any difference because section 56(2)(vii) is pari materia section 50C. Respectfully following the decision of Hon'ble Co-ordinate Bench, we also think it fit to remit the present matter back to Ld. CIT(A) for a fresh adjudication after considering the objections of assessee. Appeal of assessee is allowed for statistical purposes. - ITA No. 243/Ind/2021 - - - Dated:- 20-6-2022 - MS. SUCHITRA KAMBLE , JUDICIAL MEMBER AND SHRI B. M. BIYANI , ACCOUNTANT MEMBER Assessee by : Shri Ashish Goyal N. D. Patwa , ARs Revenue by : Shri R. S. Ambedkar , Sr. DR ORDER Per B. M. Biyani , AM THIS APPEAL: 1. This appeal filed by the assessee is directed against the order dated 17.11.2021 of learned Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs. 15,71,740/- taxed by Ld. AO as income from other sources by applying section 56(2)(vii) of the Act. PROCEEDINGS BEFORE Ld. AO: 5. The assessee purchased a land situated at village Rawad, Tehsil Depalpur for Rs. 1,19,52,500/-, which was valued by the Stamp Authority at Rs. 4,11,60,000/- for registration purpose. The assessee was not satisfied with the valuation of Stamp Authority and therefore requested the Ld. AO to refer the matter to the Departmental Valuation Officer [ Ld. DVO ]. The Ld. AO made a reference to Ld. DVO, whereupon the Ld. DVO estimated fair market value of land at Rs. 1,35,23,540/- vide his Report dated 13/12/2019, a copy of which is placed at Page No. 69 to 73 of the Paper-Book. On the basis of this Report of Ld. DVO, the Ld. AO issued a show-cause notice to the assessee u/s. 56(2)(vii) with a proposal to tax a sum of Rs. 15,71,740/- (being the difference of Rs. 1,35,23,540/- finalized by Ld. DVO and Rs. 1,19,52,500/- actual purchase-price) as Income from Other Sources. In response, the assessee submitted that the land is interior, situated in a remote village and the assessee has not paid any money other than what is declared in the purchase- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the same. Ld. AR also carried our attention to Page No. 72 of the Paper-Book and submitted that the Ld. DVO has himself mentioned in this Report 40 Km from Indore. It is in interior about 5-6 KM from main road. This property is agricultural land but after seeing the property it is found rocky area. Regarding residential purpose to build colony it has not potential. But as per rocky area it has potential. So this potential of property considered in valuation of property. Ld. AR submitted that the Ld. DVO has openly accepted extreme deficiencies in the quality of land i.e. the land is interior as well as rocky and it does not have potential for building residential colony, which have a great impact on the valuation. Ld. AR further submitted that it is also apparent from the Valuation-Report that no concrete basis has been given for making valuation, therefore the value determined by the Ld. DVO is a pure estimate. Ld. AR submitted that the Ld. DVO has finalized valuation at Rs. 1,35,23,540/- as against the purchase-price declared by the assessee at Rs. 1,19,52,500/- and therefore the difference is just 13.14% which is meagre. Ld. AR submitted that although the assessee has rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make reference to the V.O. for determining the fair market value and the functions of the V.O. Sub-section (6) of section 16A, makes it obligatory to the Assessing Officer to adopt the value as reported by the V.O. Provisions of section 23A gives scope of first appeal and the subject matter which can be appealed before the learned Commissioner (Appeals) including that of any order of the V.O. and the powers of the learned Commissioner (Appeals) in relation to such valuation. Section 24 deals with the appeal to the appellate Tribunal and section 34AA deals with the appearance of the assessee through registered valuers before the learned Commissioner (Appeals) and the Tribunal and section 35 deals with rectification of mistakes. A combined reading of these sections provide that in so far as the Assessing Officer is concerned, he is bound by the valuation adopted by the V.O. whereas the learned Commissioner (Appeals) and the Tribunal can entertain objections relating to such valuation and V.O's valuation is not binding upon them. Sub-section (3) of section 50C provides that if the value ascertained by the V.O. exceeds the value adopted or assessed by the stamp valuation authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the request of assessee and therefore whatever value was finalized by Ld. DVO, is binding upon the assessee. Ld. DR further argued that section 56(2)(vii) of the Act does not give any flexibility to deviate from the value finalized by Ld. DVO. With these submissions, Ld. DR requested to uphold the addition made by Ld. AO. OUR ANALYSIS: 8. We have considered rival submissions of both sides, perused material held on record and considered the legal precedents cited by Ld. AR. Firstly we observe that the assessee has submitted comparable instances to Ld. DVO as well as Ld. CIT(A) with supportive evidences to demonstrate that the assessee has purchased land at much higher price as compared the prices paid in the those comparable instances. But no finding has been given by the lower authorities on this submission. Secondly, we observe that the land purchased by the assessee is situated in interior area, is rocky and is not suitable for activities. These undisputed features, which are well-accepted by Ld. TPO, have a substantial bearing on the valuation of land and must be taken into account. Thirdly, we observe that the difference in valuation is about 13.14% which is a meagre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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