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TaxTMI 
TaxTMI 
TaxTMI 
2014 (4) TMI 1017
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....51,69,640/-. The AO on receiving the report issued notice to the assessee to show cause why the valuation of the investment ought not to be enhanced to the figure indicated by the DVO. In the course of the proceedings before the AO, the statement of one Mr. Naveen Goyal, an official of the assessee was recorded. He expressed the inability to ensure the presence of the sellers of the properties purchased by the assessee. Another individual Mr. Sanjay Mittal, a Director of the company was summoned; he did not comply with the orders. In these circumstances, the AO enhanced the value and confirmed it as Rs.10,51,69,640/-. The assessee appealed successfully to the CIT (A) which accepted its contentions. Feeling aggrieved, the Revenue appealed to the Tribunal which by the impugned order rejected the same. 3. It is argued that the report of the DVO had high evidentiary value given the circumstance that the assessee did not cooperate in the enquiry by the AO. It is contended that the DVO's report took into consideration all the relevant materials such as the value of the surrounding lands and the market value thereof. In view of these circumstances as well as the inability of the assessee....
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....Assessing Officer recorded, u/s 131 of the Act, a statement of Shri Naveen Kumar Goyal, one of the Directors of the assessee company on 20.08.2009. therein, a specific question (Question 12) was asked as to if the deponent could identify and produce the sellers of the land. Shri Goyal responded by saying that he could not produce the sellers. Now, when, undisputedly, the details of the sellers of the land to the assessee were on record before the Assessing Officer and the Assessing Officer had all power to make inquiry under the Act from such sellers and the Assessing Officer, for reasons best known to him, did not make any such inquiry, the onus on the department to prove that the investment made by the assessee was in fact more than that depicted in its books of account, did not get discharged at all. In the following cases, as correctly noted by the Ld. CIT (A), it has been held that the onus is on the revenue to substitute apparent consideration and that addition u/s 69B of the Act can be made only on the basis of positive material or evidence regarding consideration in excess of what is recorded in the books as having been paid and that no addition u/s 69B of the Act can be ma....
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.... value of the property, and it moved with the ups and downs of the market. Not anymore. From 1-4-1989, the value was frozen. For all times to come, an immovable property that fetches rent shall be valued at 12.5 times the net maintainable rent. 10. There is a fundamental fallacy in invoking the provisions of the Wealth Tax Act to the application of section 69B of the Income Tax Act, notwithstanding that both the Acts are cognate and have even been said to constitute an integrated scheme of taxation. Under the Income Tax Act, we are to find what was the real and actual consideration paid by the assessee and whether the full consideration has been recorded in the books. Under section 7(1) of the Wealth Tax Act as it stood before 1-4-1989, we are to estimate the fair market value of the asset; after this date, it is not even estimation of the fair market value, but computation of the value of the asset on the basis of certain rules prescribed by the statute. If A dies leaving prime property in Connaught Place to his son B, B pays nothing for the property; the property may command a market price of several crores. If "A", because of his love and affection for "B", sells the property f....
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....ter while introducing the provision; and (c) the absurd or irrational results that would flow from a literal interpretation of the sub-section, which could not have been intended by the legislature. 12. While the omitted section 52(2) applied to the transferor of the property, section 69B applies to the transferee - the purchaser - of the property. It refers to the money "expended" by the assessee, but not recorded in his books of account, which is a clear reference to undisclosed income being used in the investment. Applying the logic and reasoning in K.P. Varghese (supra) it seems to us that even for the purposes of Section 69B it is the burden of the Assessing Officer to first prove that there was understatement of the consideration (investment) in the books of account. Once that undervaluation is established as a matter of fact, the Assessing Officer, in the absence of any satisfactory explanation from the assessee as to the source of the undisclosed portion of the investment, can proceed to adopt some dependable or reliable yardstick with which to measure the extent of understatement of the investment. One such yardstick can be the fair market value of the property determined....
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.... (1959) 37 ITR 288 (SC) which held that mere suspicion cannot take the place of proof. The Court was of the opinion that mere reliance upon the report of the Valuation Officer expressing his opinion as to the true value would be inadequate material for the AO to constitute evidence in the absence of positive evidence. In the present case too, the approach of the Tribunal is in accord with what has been expressed in Dinesh Jain HUF's matter and the other judgments of the Supreme Court noticed earlier. As such no substantial question of law arises. 7. So far as the second question relates, issue of short term capital gain, in this regard the Tribunal had recorded as follows: - "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.29,80,511/-, due to which, according to the Assessing Officer the short-term capital gain of Rs.29,80,511/- had also been understated by the assessee in its return of income. Th....