TaxTMI 
TaxTMI 
2013 (5) TMI 586
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....e first issue in this appeal of assessee is against the order of CIT(A) in holding the assessment valid despite the fact that no notice u/s. 143(2) of the Act was issued. For this, assessee has raised following ground no.1: "1. FOR THAT the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri erred in upholding the validity of the assessment order passed u/s. 143(3) of the Income Tax Act, 1961 by the Ld. Income Tax Officer, Ward 1, Balurghat without serving the appellant with a notice u/s. 143(2) of the Act which is mandatorily required under the statute and such blatant violation of the law renders the order Passed ab initio void, ultra vires and ex-facie null in law." 3. At the outset, Ld. counsel for the assessee fairly conceded and....
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....furnished security to the bank of equitable mortgage of land and building at Rs.12.90 lakh and RIP-547 of the value of Rs.71,205/-. According to assessee, these are not reflected in the Balance Sheet but only reflected value as land at Rs.1.35 lakh and construction at Rs.1 lakh totalling to Rs.2.35 lakh. As there is difference in the value declared to the bank for taking loan he made addition at Rs.11,26,205/- by observing as under: "The A.R. of the assessee was asked to explain the reasons for not showing the Land & Building of Rs.12,90,000/- and the RIP of Rs.71,205/-. The A/R could not offer any satisfactory explanation. Thus, the total value of land & building of Rs.12,90,000/- and RIP value of Rs.71,205/- = Rs.13,61,205/- minus Rs.2....
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....unt of Rs.83,000/- is included with the total income of the assessee, treating the same as unexplained investment u/s. 69B of the I. T. Act, 1961. Penalty proceedings u/s. 271(1)(c) of the I. T. Act, 1961 is initiated separately." 6. Aggrieved, against both the additions assessee preferred appeal before CIT(A), who confirmed the additions, on equitable mortgaged land valued by stating that the assessee did not supply the details of property mortgaged for availing loans like their loan application, loan sanctioned order or any other details showing the particulars of property mortgaged for the loan. According to him, as per the normal practice of bank even if any existing property is mortgaged to the bank for sanctioning excess amount ove....
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.... mortgage of land and building. This certificate was produced before the AO as well as before CIT(A) but CIT(A) refused to admit the same. We find that this is a simple case of taking a bank loan by adopting the fair market value of the property for the purpose of equitable mortgage but actually the book value of the property is Rs.2.35 lakh. Can the AO make addition on the basis of market valuation done by the valuer for the purpose of obtaining higher loan, in our view, no. A higher valuation in no way gives any right to the AO to make addition of income, under any of the provisions of the Act, in the hands of the assessee, rather it is only for obtaining loan or cash credit limit from bank. In such circumstances, we delete the addition a....