2024 (1) TMI 651 - AT - Income Tax

CIT(A) must provide detailed reasoning under Section 250(6) when upholding property addition under Section 56(2)(x)(b)

The ITAT Mumbai held that the CIT(A) failed to provide detailed reasoning as required under Section 250(6) when upholding the AO's addition of Rs. ... Determination of date of acquisition for the purpose of ascertaining any income u/s 56 (2) (x) (b) - purchase of immovable property where the purchase value is less than the stamp value determined by authority - whether the date of acquisition of the property should be considered by the letter dated 13/4/2007 wherein the assessee has demonstrated that he has paid a sum of Rs 5 lakhs for booking of the commercial property? - AO has disregarded this argument for the reason that the letter dated 13/4/2007 did not identify the property as well as did not mention the actual consideration agreed between the parties and therefore such allotment letter cannot be considered as the date of acquisition of the property HELD THAT:- It is not the case of the assessee that notices have not been received at that email address or on the ITBA portal. Before us in form number 36 also the assessee has given the same email address. Therefore, non-receipt of the notice cannot be believed. However, it is also the fact that the learned CIT – A should have given a detailed reason on the ground of appeal raised by the assessee in terms of provisions of section 250 (6) of the act. CIT appeal without considering the merits of the case has merely upheld the action of the learned assessing officer. Therefore, the order of the learned CIT – A is not in accordance with the provisions of section 250 (6) of the act as in the ground of appeal there was a specific ground raised about the addition of Rs. 14,098,500. In view of the above facts and in the interest of natural justice we restore the appeal of the assessee back to the learned CIT – With a direction to the assessee that as soon as the window is available for submission of detailed by the learned CIT – A, assessee must submit the detail within the prescribed time which may be considered by the learned CIT – A and decide issue on the merits of the case. Appeal filed by the assessee is allowed for statistical purposes. Issues involved:The appeal challenges the addition of Rs. 14,098,500 under section 56 (2) (x) (b) of The Income Tax Act, 1961, based on the stamp duty value of a property purchase.Brief facts:The individual assessee filed an income tax return for the assessment year 2018-19, with the case selected for limited scrutiny regarding a property investment. The property was purchased for Rs. 3,620,000, but the stamp duty value was determined at Rs. 17,718,500, resulting in the disputed addition of Rs. 14,098,500.Arguments before authorities:The assessee claimed that the property was purchased in 2007, with the stamp duty value as of the allotment date to be considered. However, the assessing officer relied on a later agreement for sale in 2017 to determine the stamp duty value. The CIT-A upheld the assessing officer's decision due to the assessee's non-compliance with hearing notices.Decision and reasoning:The ITAT Mumbai found that the assessing officer's rejection of the allotment date for determining the property's acquisition date was not justified. The CIT-A's failure to consider the merits of the case and the specific ground of appeal raised by the assessee led to the appeal being restored for proper consideration and opportunity for submission. The appeal was allowed, directing the CIT-A to decide the issue on its merits after providing a fair hearing.Conclusion:The appeal filed by the assessee was allowed for statistical purposes, with the direction to the CIT-A to reconsider the matter based on the additional submissions to be provided by the assessee within the prescribed time frame.