Prakash Arjaandas Arora, Mumbai vs Assessee

The present appeal has been preferred by the assessee against the order dated 23.05.2011 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2007-08.

2. The assessee has taken the following grounds of appeal:

"1. On the facts and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeals) failed to appreciate that the assessment was invalid in view of non service of notice under section 143(2) within the statutory time.

2. On the facts and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeals) failed to appreciate that, Authorized Representative of the Appellant while filing the appeal erred in submitting that, the notice was duly served, and the error was sought to be rectified by the same Authorized Representative at the time of Appellate Proceedings.

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3. On the facts and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeals) erred in upholding order of the Assessing Officer erred in invoking provisions of section 50C and substituting stamp duty valuation of Rs. 7,949,500 in place of sale price of Rs. 4,250,000 without referring the matter to the valuation officer (DVO) and without appreciating that the actual market value of the property was less at the time of sale and even at the time of purchase of property against stamp duty valuation.

4. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeals) erred in treating modified ground on referring the matter to DVO as additional ground without appreciating that, the same was already taken as original Ground No. 3; and in any case your Appellant was at liberty to raise Additional Ground any time during course of the Appellate Proceedings without being subjected to the provisions of section 249 (4) with respect to belated appeal."

3. Vide ground Nos.1 & 2, the assessee has agitated the validity of the assessment proceedings on the ground that no notice under section 143(2) was issued to the assessee.

4. At the outset, the Ld. A.R. of the assessee has stated that as per instructions of his client, he does not press this issue. The ground Nos.1 & 2 are therefore dismissed accordingly, being not pressed.

5. Vide ground No.3 & 4, the assessee has agitated the action of the Ld. CIT(A) in rejecting the contention of the assessee that before invoking the provisions of section 50C and deducting the stamp duty value, the Assessing Officer (hereinafter referred to as the AO) should have considered the contentions of the assessee that the market value of the property/the sale consideration for which the property was sold was less than the stamp duty value and that the AO should have referred the matter to the valuation officer (DVO) as per the provisions of section 50C(2) of the Income Tax Act. It has been contended by the Ld. A.R. that the AO, while adopting the stamp duty value for the sale proceeds under section 50C of the Act, did not give ITA No.6254/M/2011 3 Prakash Arjandas Arora

opportunity to the assessee to present its case regarding the actual sale price received by the assessee and that the actual value of the property was less than the stamp duty paid on the sale deed. The Ld. CIT(A) has also rejected the said contention of the assessee.

On the other hand, the Ld. D.R. has contended that since no such request to refer the matter to DVO was made by the assessee before the AO, hence the Ld. CIT(A) was justified in rejecting the above contention of the assessee.

6. We have considered the rival contentions of the Ld. Representatives of both the parties and have also gone through the record. A perusal of the assessment order reveals that the AO has not given any opportunity to the assessee to explain in this respect while adopting the stamp duty valuation instead of the sale value as disclosed in the sale deed.

6.1 On the other hand, the Ld. A.R. of the assessee has specifically contended before the Ld. CIT(A) that the actual value, due to certain circumstances like recession in the real estate, was much more than the stamp duty value. Even the other properties in the area and that even in the same building were sold at lesser consideration due to the slowdown in the market conditions. Under such circumstances, in our view, the interest of justice will be well served, if the contentions of the assessee be considered and decided on merits and the report of the DVO regarding the market value of the property at the time of sale transaction be also taken. We accordingly set aside the impugned order and restore the matter to the AO for making a fresh assessment after taking the report of the DVO and considering the contentions of the assessee in this respect.

7. Ground No.5 is general in nature and does not require any adjudication.

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8. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 20.02.2015.

Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 20.02.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.