TaxTMI 
TaxTMI 
2013 (9) TMI 10
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....essee was unable to discharge the onus on it that valuation of land declared by it is justified and this fact was duly brought on record prior to reference to the DVO u/ s 142A. Without prejudice to the same, there is no pre-requisite in law of the necessity to have evidence of under-statement of investment before making a reference to the DVO. Reliance is placed on the decision in CIT Vs. Bhawani Shanker Vyas 311 ITR 8 (Uttrakhand High Court) dated 18/11/2008. b) reference to the DVO was made after the assessee was unable to discharge the onus on it that valuation of land declared by it is justified; and sub-section (3) to section 142A provides that the Assessing Officer may take into account DVO's report while making assessment. c) the valuation report of the DVO is not insufficient evidence to hold the unexplained investment has been made by the assessee. Reliance is placed on decision of Hon'ble Tribunal in Hanemp Properties (P) Ltd. Vs. ACIT [2006] 101 ITD 19 (Delhi). 3. The Ld. CIT(A) has erred in law and on facts in deleting the addition made on account of short term capital gain ignoring the facts that reference was made by the Assessing Officer to the DVO u/ s 142....
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....d so, it could not be said that the valuation was done at the back of the assessee. Since the assessee had made investments and the amount spent exceeded the amount recorded in the assessee's books of account, as per the Assessing Officer, the provisions of Section 69 of the Act got attracted. It was observed that the reference to the DVO u/s 142A read with Section 69B of the Act was justified, since in spite of having been granted opportunities, the assessee had remained unable to adequately explain the source, budget and valuation of the land. The Assessing Officer placed reliance on various case laws to observe that if proper explanations are not provided by the assessee, the Assessing Officer is entitled to make additions u/s 69B of the Act. The Assessing Officer further observed that the assessee company had deliberately understated the investments made by it in its books of account and so, the assessee's books of account, being deficient, could not be relied on, as they did not portray the true picture of facts and figures. Thereby the Assessing Officer rejected the assessee's books of account. By virtue of the impugned order, the Ld. CIT (A) deleted the addition made by the ....
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....rroneously overlooked the decision of the Delhi Tribunal in the case of 'Hanemp', 109 ITD 19 (Del), wherein, relying on the decision of the Hon'ble Delhi High Court in the case of 'Raja Sugar', 130 ITR 421 (Del), it has been held that it is not possible to prove payment of on money in every case; that before the Assessing Officer made reference to the DVO, the representation of the assessee was examined, asking if the sellers of the land could be identified and proved; that in response, inability to do so was expressed; that since the assessee thus refused to cooperate with the Assessing Officer, the Assessing Officer rightly referred the matter to the DVO for ascertaining the correct value of the land; that adverting to the question of the addition made by the Assessing Officer on the basis of the DVO's report, the Ld. CIT (A) referred to the case of 'K.P. Varghese', 131 ITR 257 (SC); that in that case, the Hon'ble Supreme Court considered the questions arising out of the application of the now omitted Section 52 (2) of the Act for determination of capital gain; that the facts of that case, evidently, are entirely different from the present one; that in that case, the assessee had....
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....assessee company to the summons issued to him also indicates evasiveness; that in the case of 'Five Star Health Care', 42 SOT 153 (Del), where the circle rate was higher than the rate declared in the purchase deed, the Assessing Officer was held justified in making a reference to the DVO u/s 142A of the Act; that in the case of 'Hanemp Properties', 101 ITD 19 (Del), it was held that where there is a significant under-valuation of immovable property in the disclosed apparent consideration, there would be a rebuttable presumption of understatement of consideration also and that, therefore, the argument that no matter what the difference between the fair market value of the property and the apparent consideration disclosed by the parties is there ought to be further positive evidence of any concealed suppressed consideration being paid to the transferor by the transferee, for making assessment of undisclosed investment, is not legally tenable; and that in the present case, the value declared by the assessee is even less than the circle rate and the plots purchased are contiguous and next to a four lane carriage way, justifying the solatium amount. 5. The ld. counsel for the assesse....
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....icle and it is found that the investment exceeds the corresponding amount recorded in the books of account and either the assessee offers no explanation about such excess amount, or the explanation offered is not satisfactory. Thus, the sine qua non u/s 69B of the Act is for the Assessing Officer to reach a finding, on the basis of evidence, that the assessee has made investment outside its books of account. Only on the basis of such a finding can an addition be made u/s 69B. So far as regards investment over and above that recorded in the books of account, the onus, rather the burden, is on the department to prove such allegation, as has been held in, inter alia, 'CIT vs. Daulat Mal Rawat Mal', 87 ITR 349 (SC), 'K.P. Verghese vs. ITO', 131 ITR 597 (SC) and 'CIT vs. Bedi & Co. (P) Ltd.', 230 ITR 580 (SC). The department has argued that in the present case, the assessee did not cooperate in the assessment proceedings with the Assessing Officer and so, the onus on the department is deemed to have been discharged. In this regard, it is seen that before making the reference to the DVO, the Assessing Officer examined one of the representatives of the assessee, asking if the sellers coul....
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....y held by the Ld. CIT (A). 9. For the foregoing discussion, we do not find any force in the case tried to be made out by the department in support of its Ground No.2. Accordingly, Ground No.2 raised by the department is rejected. 10. The department, by way of Ground No.3 and 4 has also challenged the action of the Ld. CIT (A) in directing the Assessing Officer to recompute the short-term capital gain computed on the plot of land purchased and sold by the assessee, by taking the cost of the plot at Rs. 12 lac and also to include the stamp duty towards the cost of acquisition, by adding the stamp duty reduced for arriving at the short- term capital gain in view of the provisions of Section 50C of the IT Act, holding that there was also no justification for adding the various amounts towards sale of land over and above the stamp duty rates. 11. The assessee, during the year, had sold land measuring 1.26 acres in village Khaira for Rs. 12 lac as against purchase cost of Rs. 13,75,550/-. The Assessing Officer observed that since the purchase cost had been understated by an amount of Rs. 29,80,511/-, correspondingly the sale price was also understated by an equal amount of Rs. 2....