TMI Blog2023 (8) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... se, 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 per the Section 56(2)(vii)(b) of the Act. Pursuant thereto, the assessee replied that he has only parted with the agreed sale consideration of Rs. 19,50,000/- and the flat was situated in a Slum Area (Slum Rehabilitation flat). And therefore, he contended that the fair market value/circle rate as determined by the Stamp Valuation Authority was unreasonably high. And therefore, he pleaded before the AO that the circle rate should not be adopted for determination of income in the hands of the assessee u/s 56(2)(vii)(b) of the Act. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 Income Tax Department) who has given report that the purchase price/purchase consideration of the flat in question was fair and reasonable, (refer page no 87-104 of PB) and the registered valuer concluded his report as under :- D-8 Conclusion- On enquiring in the locality residential flats are being sold and available to purchase in the year 2018 were in the range of Rs. 7,000/- to Rs. 8,000/- per sq. ft. on BU area, And the instances of sales are available are also of the same range, depending upon the location, infrastructure develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 to be taken according to the stamp valuation authorities. In the present case, the Assessing Officer has made addition under section 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) of the Act. In this context, it is gainful to refer to the decision of the Delhi Tribunal in the case of ITO Vs. Aastha Goel, wherein addition was made under section 56(2)(vii)(b) of the Act and it was held that in the absence of the reference to the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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