AI OCR 
TaxTMI 
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2015 (7) TMI 250
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....ny ground of appeal." 3. The grounds raised in the Assessee's Appeal No. 5974/Del/2014 read as under:- "1. That CIT(A) erred in passing order without disposing off ground no. 4 of the grounds of appeal filed before CIT(A) whereas in the appeal order CIT(A) has reproduced ground no. 4 also. 2. The AO erred in taking sales consideration u/s. 48 on the basis of market value as per old valuation report instead of actual sales consideration of Rs. 95,00,000/- as per registered sales deed and as such additions be deleted. 3. That exemption u/s. 54 be allowed to the assessee in respect of "residential property" purchased by the assessee. 4. That CIT(A) erred in holding that case of the assessee is squarely covered u/s. 292BB. 5. The assessee craves leave to add to or amend the aforesaid grounds before disposal of the appeal. 4. First we take up the Revenue's s appeal. The brief facts of the case are that a survey uls 133 of the Income Tax Act was carried out by ADIT(lnv. )Unit -Ill, New Delhi on 06.10.2010 at the premises of Mls Vishal Gold and Precious Stone Pvt. Ltd., B- 5, Near Durga Mandir, Moti Nagar, Delhi. During the course of survey, several documents were impounded f....
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....of the assessee and vide letter dated 21.11.2012, he referred the matter to the valuation officer for estimation of value officer for estimation made by the assessee in the property J-1/161, Rajouri Garden, New Delhi u/s. 142A of the IT Act. The valuation officer vide his letter No. VO-II/ND.IT-05/142-A/2012-13/23 dated 20.3.2013 submitted his valuation report to the Assessing Officer in respect of property J-1/161 Rajouri Garden, New Delhi wherein he assessed the value of such property at Rs. 3,53,30,000/- against its declared value of Rs. 88,60,000/-. Thereafter, the Assessing Officer issued a letter dated 21.03.2013 to the assessee and requested her to explain as to why not the aforesaid property should be valued at Rs. 3,53,30,000/- as per the Report of the Valuation Officer by 22.03.2013. The assessee could not explain the difference in the valuation of the aforesaid property. Therefore, the Assessing Officer. concluded that the assessee failed to explain the investments in the property by establishing the genuineness and her creditworthiness and he added the aggregate values of the property at Rs. 3,53,30,000/- (i.e. at J-1/161, Rajouri Garden, New Delhi at Rs. 3,53,30,000/- ....
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.... relied upon the order passed by the Ld. CIT(A) on the issue involved in the Revenue's Appeal and stated that the Ld. CIT(A) has rightly deleted the addition of Rs. 3,53,30,000/- on account of unexplained income for which the assessee has produced sufficient opportunity before the Revenue Authority. He further stated that the assessee has not filed any additional evidence before the Ld. CIT(A), therefore, there is no question to giving the opportunity to the AO under Rule 46 of the I.T. Rules, 1962. He further stated that the sale consideration received by the assessee is Rs. 95 lacs. There is no evidence on record and sale consideration received by the Assessee is more than Rs. 95 lacs. Therefore, the actual sale consideration as per Section 48 should be Rs. 95 lacs. Ld. Counsel of the assessee further stated that even if it is presumed that sale consideration is as per Valuation Report, then exemption u/s. 54 is allowable on entire capital gain, as assessee has invested entire sale consideration received in new property. In support of his contention, he cited the following decisions of the Hon'ble Delhi High Court:- - CIT vs. Smt. Nilofer I. Singh [2009] 176 TAXMANN 252 (Delhi) ....
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....er property in District Baddi (Himachal Pradesh), in respect of which documentary evidence indicated unaccounted consideration paid by the assessee, referred to by the AO in para 4.3 of his order. At the same time, learned counsel also conceded that no addition to the tax liability of the assessee on account of the said other property has been made. There is no nexus between the property in Baddi (Himachal Pradesh) and the property in Punjabi Bagh (West). There is undoubtedly no material available to even remotely reflect that consideration over and above what was shown to be paid in the registered sale deed of the West Punjabi Bagh property was made over to the seller. In these circumstances, it was not fair in the first place to refer the said property for estimation of its market value by DVO. 9. The assessment of the value by DVO cannot hold primacy over the consideration for which the property was actually acquired. If there is any difference in the shares in consideration borne by the four brothers, it is matter of their inter se understanding. Doubts as to the real value cannot arise from such fact alone." 10.3 We further find that the assessee has contested that the add....
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....uring the relevant assessment year, the assessee sold a property at 20C/72, West Punjabi Baqh, New Delhi and utilized the sale proceeds for the purchase of property at J-1/161, Rajouri Garden, New Delhi. However, it seems that the Assessing Officer has ignored all the explanations given by the assessee during the course of assessment. From the assessment order, it is also evident that the Assessing Officer has not controverted the explanation given by the assessee regarding the investments made in the aforementioned property. Further, no material has been brought on record by the Assessing Officer to show that the assessee has made any excess investments in the aforesaid property over and above the value recorded in the sale deed. Therefore, we are of the view that the Assessing Officer has grossly erred in making addition of RS.3,53,30,OOO/- on account of investment in the properties at J- 1/161, Rajouri Garden, New Delhi and Ld. CIT(A) has rightly appreciated all the evidences filed by the Assessee before AO. The AO without bringing any evidence on record of excess investment in the properties at J-1/161, Rajouri Garden, New Delhi over and above the value of investment shown in t....
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....he assessment that the AO can frame his mind to refer the property to DVO. Such mind can be framed if there is a basis to think that the assessee may have understated the cost of construction or whatever is declared by him in this regard is not believable. Ld. CIT(A) has rightly appreciated the all evidences as well as provisions of law and decided the issue in favor of the assessee. 10.7 On perusal of the assessment order, we find that there was no reference whatsoever made by the AO to any material/evidence/information on the basis of which it could be said that the said that the investment shown by the appellant was understated and that anything above what was disclosed by the appellant. Thus, the condition precedent for making reference to the DVO by invoking the provisions of Sec. 142A was not satisfied in the present case. Moreover, on perusal of the assessment order, it is noted that nowhere the AO has mentioned that what are the mistakes and unreliability has been found out by the AO in the books of accounts of the appellant. Thus, the AO has not pointed out any defects in the books as far as related to the investment made by the appellant. In my humble opinion, the provis....
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....e ova as unexplained money paid by the assessee for the purchase or the property. 10.9 We further note that there was no finding by the Assessing Officer that the assessee had incurred any expenditure in excess of what had been declared but he had referred the issue of valuation to the ova only on the basis of speculation alleging information in the form of newspaper report about enhanced property prices in the area. In these circumstances, the reference made by the Assessing Officer by invoking the provisions of section 142A was without justification and, consequently, no addition could be made on the basis of valuation made by the DVO. 10.10 To support our finding, we place reliance on the decision of the Hon'ble Supreme Court of India in the case of Sargam Cinema vs. CIT [2011] 197 Taxman 203 (SC) wherein it was held as under:- "4. In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing, authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. In the present case, a categorical finding is re....
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....of Commissioner of Income-tax v. Ambience Developers and Infrastructure(P.) Ltd, [2012] 25 taxmann.com 210 (Delhi), CIT vs Gulshan Kumar [2002] 257 ITR 703 (Delhi), CIT v. P .V. Kalyanasundaram [2007] 294 ITR 49 (SC) Subhash Chand Chopra v. Asst. CIT [2005] 92 TTJ (Delhi) 1087) and K.P Varghese. v. ITO [1981] 131 ITR 597 (SC). 10.13 Under these circumstances, We are of the opinion that the Assessing Officer has erred in referring the matter to the DVO and consequently the DVO's report on the value of investment in the property cannot replace the actual purchase value shown in the purchase deed of the aforesaid property at J-1/161, Rajouri Garden, New Delhi. Hence, the Assessing Officer has erred in adopting the value of the property at J-1/161, Rajouri Garden, New Delhi estimated by the DVO by replacing the value shown in the purchase deed. Ld. First Appellate Authority has rightly appreciated the all evidences as well as the relevant provisions of law and deleted the addition in dispute. It is further observed that even after the receipt of the valuation report from the DVO, the Assessing Officer had given only one day time to the appellant to explain the difference in the va....
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....fficer had to adopt amount received by assessee as full value of sale consideration for calculating capital gain liable to tax - Held, yes - Whether even otherwise, adoption of report of ova without providing an opportunity of being heard to assessee was against principles of natural justice - Held, yes - Whether, consequently, impugned addition made by Assessing Officer was rightly deleted - Held, yes" 10.15 In the background of the aforesaid discussions and respectfully following the precedents as aforesaid, we are of the considered view that the Ld. CIT(A) was right in observing that the AO has erred in making the addition Rs. 3,53,30,000/- on account of unexplained income of the assessee and accordingly rightly directed the AO to delete the addition in dispute, which in our opinion, does not need any interference on our part, hence, we uphold the same. Accordingly, the Ground no. 1 raised by the Revenue stands dismissed. 11. With regard to ground no. 2 regarding admitting the additional evidence without giving the opportunity to AO under Rule 46A is concerned, we find that no additional evidence have been filed by the Assessee before the Ld. CIT(A), which required to be sent....