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Judgment
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”] Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1080819674(1), dated 17.19.2025 involving proceedings under section 147 r.w.s.143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
It transpires during the course of hearing that the learned Assessing Officer in the assessee’s case had initiated the impugned reopening proceedings for the purpose of making section 50C of the Act addition amounting to Rs.78.30 lakhs in assessment finalized vide order dated 09.12.2019, which has been upheld in the CIT(A)’s lower appellate discussion reading as under:-
“5.5.3Ground No. 5 and Merits of Addition On merits, the appellant claims the deposits are from property sales, proposing a revised LTCG of Rs. 5,82,881/- after indexed cost and Section 54 deduction. However, this was not declared in the original return, shifting the onus under Section 68 to prove the source satisfactorily. The AO rightly noted: (i) No evidence of acquisition cost (Rs. 49,815/- + construction Rs. 5,94,350/-) or inheritance; (ii) Withdrawals/re-deposits unexplained; (iii) Section 50C deems stamp value (Rs. 78,30,000/-) as consideration, but without proven cost, the full amount is taxable as unexplained (Roshan Di Hatti vs. CIT, 107 ITR 938 (SC); Nanak Chand Laxman Dass vs. CIT, 140 ITR 151 (All HC)). The appellant's documents (sale deeds, buyer confirmations) were considered but found insufficient to discharge the burden, as they lack linkage to bank entries or tax payment on gains. Judicially, human probabilities must be applied (Sumati Dayal vs. CIT, supra), and the AO's finding of unsatisfactory explanation is upheld absent contrary evidence. The addition of Rs.78,30,000/- as unexplained income is confirmed.”
This is what leaves the assessee/appellant aggrieved.
That being the case, the first and foremost issue which arises for our apt adjudication is that of correctness of the learned CIT(A)/NFAC’s action concluding that it was the assessee’s onus to prove the source of the relevant cost of acquisition and improvement, etc., of the capital asset, if any. We are of the considered view in light of CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC) & CIT vs. Sardari Lal & Co. (2001) 251 ITR 864 (Del.), that no such jurisdiction is vested with the learned lower appellate authority even for the purpose of enhancement so as to change the head of income itself. We thus find merit in the assessee’s vehement contentions reverse the learned CIT(A)’s findings under challenge to this extent.
Next comes the latter issue of section 50C addition of Rs.78.30 lakhs made in the assessee’s hands representing the difference between stamp valuation and actual sale consideration of the capital asset sold/transferred in the relevant previous year. The learned Assessing Officer admittedly appears not to have made any statutory reference to the DVO, which has been held mandatory in Sunil Kumar Agarwal vs. CIT (2015) 372 ITR 83 (Calcutta). This is indeed coupled with the fact that neither the Assessing Officer has ascertained the cost of acquisition of the relevant capital asset nor the cost of improvement, as the case may be. We thus restore the assessee’s section 50C addition issue back to the learned Assessing Officer for fresh adjudication in preceding terms as per law.
No other ground or argument has been pressed.
This assessee’s appeal is partly allowed in above terms.