Alok Singh vs Income Tax Officer

PER M. BALAGANESH, A. M.:

The appeal in ITA No.3098/Del/2025 for AY 2020-21, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 12.03.2025 against the order of assessment passed u/s 143(3) r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 19.09.2022 by the Assessing at NaFAC (hereinafter referred to as ‘ld. AO’).

The only effective issue to be decided in this appeal is as to whether the Learned CITA was justified in upholding the addition made by the Learned AO under section 56(2)(x) of the Act in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. The assessee had jointly purchased an immovable property at Arazi No. 60 / 1, Mauza – Taktakpur, District Varanasi on 31st May 2019 along with his brother with 50% share for total consideration of Rs 1,50,00,000. The circle rate as on the date of registered sale deed adopted by the stamp duty authorities was Rs 2,77,41,000. The assessee objected to the adoption of the stamp duty value and accordingly during the assessment proceedings requested the learned AO to make a reference to the Departmental Valuation Officer (DVO). The learned AO accordingly made a reference to the Technical Unit / valuation officer under section 131(1)(d) vide letter dated 6-3-2026. Since the valuation officer's report was not received before the limitation date of 31-3-2026, the assessment order stood passed on 26-3-2026 making an addition of Rs 63,70,500 [ (27741000-15000000) * 50% share] under section 56(2)(x) of the Act by adopting the stamp duty value. While doing so, the learned AO himself recorded in his assessment order that the said addition shall be subjected to modification in case if the learned DVO suggest a lesser value at later point in time.

The report of the Learned DVO dated 30-3-2026 was received subsequently, wherein the fair market value of the entire property as on 31-5-2019 was determined at Rs 1,67,47,300. Since the report of the Learned DVO was not available at the time of assessment proceedings, the Learned AO did not have the benefit of the same while making an addition under section 56(2)(x) of the Act accordingly. Hence, we direct the Learned AO to adopt the value determined by the Learned DVO at Rs 1,67,47,300 for the whole property and make an addition in the hands of the assessee only for the differential sum in the following manner:-

Value as per DVO 1,67,47,300 Less: Value shown in the registered deed 1,50,00,000 Difference 17,47,300 Assessee’s share is 50% 8,73,650

The Learned AO is directed to add only Rs 8,73,650/- in the hands of the assessee under section 56(2)(x) of the Act. Accordingly, the grounds raised by the assessee are partly allowed.

In the result, the appeal of the assessee is partly allowed.