TaxTMI 
TaxTMI 
2026 (8) TMI 185
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....No 225/157/2017/ITA-II dated 23-06-2017 and accordingly, the assessment order passed consequently is void-ab-initio and bad in law. 3. On the facts and circumstances of the case, the CIT(A) is not justified in sustaining the addition made by the AO amounting to Rs. 50,00,000/- u/s. 69A r.w s. 115BBE of the Act. The appellant has purchased an immovable property where the same was obtained from the seller for non payment of loan amount to the appellant. Making addition of a loan amount provided on 23 07 2020 ie AY. 2021-22, in A.Y.2022-23 is not justified. 4. On the facts and circumstances of the case, the CIT(A) is not justified in sustaining the addition made by the AO amounting to Rs. 18,34,250/- as income from other sources being difference between consideration paid and stamp duty value of the property purchased. In the course of appellate proceedings, the appellant has requested to the CIT(A) to refer the property to DVO for assessing the actual market value of the property Instead, the CIT(A) sustained to action of AO without referring the property for valuation to DVO, which is against the principles of natural justice. 5 On the facts and circumstan....
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....nds before the ld.CIT(A) and made the following submissions before the ld.CIT(A): 1. Legal Ground: The notice issued u/s. 143(2) dated 01.06.2023 was stated to be invalid as it was allegedly issued in violation of CBDT Instruction No. F. No. 225/157/2017/ITA-II dated 23.06.2017. Consequently, it was contended that the assessment order is void ab initio. 2. Addition of Rs. 50,00,000/- u/s. 69A: The appellant submitted that the property purchased for Rs. 52,00,000 was acquired from Smt. A. Manoranthini, out of which Rs. 50,00,000 represented adjustment of an earlier loan advanced to the seller under a registered mortgage deed dated 23.07.2020, which was subsequently cancelled through a registered mortgage cancellation deed dated 30.07.2021. It was contended that the loan had been advanced through banking channels during FY 2020-21, supported by the registered mortgage deed mentioning the cheque details. Therefore, the source of the amount pertained to AY 2021-22 and could not be treated as unexplained investment in AY 2022-23. The balance consideration of Rs. 2,00,000 was stated to have been paid through the appellant's Karur Vysya Bank account. 3. Addi....
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....ot admission of evidence before the Commissioner (Appeals). II. Ground - Addition of Rs. 50,00,000 u/s. 69A: The ld.CIT(A) noted that the appellant failed to establish the source of the alleged advance of Rs. 50 lakh claimed to have been adjusted against the purchase consideration of property. He further observed that although reliance was placed on a registered mortgage deed, no supporting evidence such as bank statements, cheque clearance details, books of account, balance sheet or proof of financial capacity was produced. Mere execution of a registered mortgage deed was held insufficient to establish the genuineness and source of funds. The contention that the transaction pertained to an earlier assessment year was rejected since the appellant failed to establish the source of the funds at any stage. Accordingly, the addition u/s. 69A was confirmed. III. Ground - Addition of Rs. 18,34,250 u/s. 56(2)(x)(b): The appellant challenged the adoption of the stamp duty value and contended that the property should have been referred to the Departmental Valuation Officer (DVO). Ld.CIT(A) observed that no valuation report, comparable sale instances or any other e....
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....eed dated 23.07.2020, while the balance consideration of Rs. 2,00,000/- was paid through banking channel. It was argued that the registered mortgage deed and the registered mortgage cancellation deed clearly establish that the property was transferred in discharge of an existing mortgage liability. Therefore, there was no investment of Rs. 50,00,000/- during the relevant previous year so as to attract section 69A. 6.1 The AR further submitted that even assuming that the Revenue doubted the source of the mortgage advance, such enquiry could only relate to the year in which the advance was allegedly made and not to AY 2022-23. It was contended that the AO has taxed an amount in a wrong assessment year. 7 The ld. Departmental Representative (DR) supported the orders of the lower authorities. It was submitted that the assessee failed to establish the source of Rs. 50,00,000/- by producing bank statements, books of account, capital account, cash flow statement or other documentary evidence. According to the ld.DR, the mortgage deed merely records a recital and does not establish financial capacity or actual advancement of money. 7.1 We have carefully considered the rival sub....
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.... the stamp valuation and requested that the property be referred to the Departmental Valuation Officer (DVO). Reliance was placed on various judicial precedents to contend that where stamp valuation is disputed, the AO ought to obtain an independent valuation instead of making addition merely on the basis of guideline value. 11. The ld. DR submitted that the assessee did not produce any valuation report, comparable sale instances or other evidence to rebut the stamp duty valuation. Therefore, the AO rightly adopted the value determined by the Stamp Valuation Authority. 12. We have considered the rival submissions. The addition has been made solely on the basis of difference between the purchase consideration and the stamp duty value. The assessee consistently disputed the correctness of the guideline value both during assessment as well as appellate proceedings. Once such objection was raised, the AO was expected to objectively examine the claim instead of mechanically proceeding on the basis of the stamp duty valuation. The authorities below have proceeded on the assumption that the guideline value conclusively represents the fair market value. Such an approach is not legall....