2015 (6) TMI 963

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.... 2. The identical grounds of the appeal in all these three appeals are as under: "1. The ld.CIT(A) has erred in law and on facts in holding the reopening the assessment u/s.147 of the IT Act, 1961 to be valid in law. 2. The ld.CIT(A) has erred in law and on facts of the case by confirming the addition of Rs. 2,85,362/- (for A.Y.2002-03), Rs. 41,77,536/- (for Asstt.Year 2003-04) and Rs. 6,21,684/- (for A.Y.2004-05) being the difference of cost of construction shown by the appellant and cost of construction estimated by the Departmental Valuer by way of unexplained investment." 3. The learned counsel for the assessee submitted that preliminary issue to be decided in these cases is regarding the validity of reopening of the assessment under....

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....ned DR has opposed the submissions of the learned counsel for the assesse. He referred to relevant portions of the assessment order and the CIT(A) in support of the case of the Revenue, and in particular, in para 5.5 of the order of the CIT(A), wherein he has mentioned the case of the Hon'ble jurisdictional High Court in M/s.Manjusha Estate Pvt. Ltd. and has recorded that with due respect to the decision of the Hon'ble High Court, the valuation report obtained by the ITO, became information for the AO of the appellant. The CIT(A) has further recorded that even if the DVO's report obtained by the ITO was not within four corners of law, yet it does not loses evidentiary value in the case of the appellant, and the AO has rightly based his beli....

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....in law. In our considered view, the AO could not base his belief for escapement of income on the basis of the estimate of the amount spent in construction, on the basis of mere DVO's report. The DVO's report in "MEPL" does not pertain to the assessee and was never confronted to it by the DVO. In these facts of the case, we hold that it could not be said that that due to DVO's report in "MEPL", the AO was having a valid belief and "information" that the income has escaped the assessment in the hands of the assessee. In this view of the matter, we are unable to sustain the action of the AO in reopening of the assessment in all three relevant years under section 147 of the Act, and accordingly, the notice issued under section 148 of the Act fo....