TaxTMI 
TaxTMI 
2015 (12) TMI 897
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....he Assessing Officer and confirmed by learned CIT(A) on the basis of seized material. This issue has been raised by the assessee in its appeal for assessment year 2005-06 in I.T.A. No.254/Lkw/2014 as per ground No. 1, which is reproduced below: "1. The learned CIT(A) has erred in the law and facts of the case in confirming addition of Rs. 1,16,50,863/-." 4. Learned A. R. of the assessee reiterated the same contentions which were raised before learned CIT(A) whereas Learned D. R. of the Revenue supported the orders of the authorities below. 5. We have considered the rival submissions. We find that the contentions raised by the assessee on this issue before CIT(A) are noted by CIT(A) in Para 6 to 6.6 of his order, which are reproduced below for the sake of ready reference: "6. GROUND NO. 1 - ADDITION OF Rs. 1,16,50,863/- Your kind attention is invited towards the seized paper, on the basis of which the above mentioned addition has been made. The page no 95 of the seized material contain two set of entries, one is total amount received Rs. 74,00,000/-, in which dates for first two amounts viz Rs. 10,00,000/- on 5.3.2005 and Rs. 19,00,000/- on 9.3.2005 ....
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....longing to the brother of Shri Nausad Ahmad. He further states that from the entries recorded on these pages it can easily be inferred that the demand drafts were bought by the assessee by paying cash of equal amount. 6.5 It is true that the drafts were got prepared by the assessee out of cash but were used to pay the suppliers and as far as the source of such cash is concerned the same is out of cash available in the books. 6.6 The assessee relies upon the following judicial pronouncements in support of its contention: Chander Mohan Mehta v. Assistant Commissioner of Incometax [1999] 71 ITD 245 (PUNE) Section 158BB of the Income-tax Act, 1961 - Block assessment - Computation of undisclosed income - Assessment years 1986-87 to 1996-97 - Based on loose papers found during survey after search as well as subsequent statement of assessee recorded under section 131, giving nature and details of transactions indicated therein in regard to money-lending business, Assessing Officer made addition of entire borrowings received from certain persons even though confirmation letters were produced by them - Whether since said loose papers did not indicate name....
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....'48' was to be read as Rs. 48 lakhs and document recovered was a dumb document, addition of Rs. 48 lakhs was unjustified - Held, yes In view of above judicial pronouncements the addition of Rs. 1,16,50,863/- be deleted." 5.1 Thereafter, we find that this issue has been decided by learned CIT(A) against the assessee on the basis of following observations on pages 9 to 11 of his order, which are also reproduced below for the sake of ready reference: "I have perused the facts stated in the assessment order as well as facts stated in the assessee's submission. The Assessing Officer has made the addition of Rs. 1,16,50,863/- by observing that :During the course of search u/s 132 a register inventoried cm Annexure B-10 was found from the residence of Shri Abusad Ahmad at 4.202, Vishal Khand, Gomti Nagar, Lucknow and seized. The seized documents is a register belonging to the assessee (M/s Vijay Express Way Engineers Pvt. Ltd.) and which has entries of huge amounts received/paid from/to various persons especially on pages 95 and 97. At some places name of one Shri Vikas Singh is mentioned. At other place entry like "DD received from Aligarh" is mentioned. On page 95 entry of c....
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....e brother of Shri Naushad Ahmad, a promoter and chief managing director of the company and the impugned page itself mentions name of Shri S.S. Singh, another promoter and director of the company. The relationship of the document with (the assessee company is further established from the fact that name of the company itself is mentioned on the cover page of the impugned register. In view of overall facts of the case it is established that the assessee failed to offer satisfactory explanation on this issue. Hence, the value of transaction effected through this document is treated as assessee's undisclosed income. From the entries recorded on these pages it can easily be inferred that the demand drafts were bought by the assess by paying cash of equal amounts. On page, 95, total expenses on demand drafts are worked out at Rs. 80,12,863/- and at the lower portion of the same page equal amount is paid in cash to 'Jhaji' apparently for this purpose. Similar is the positions for entries on page 97 also. The total of receipts through demand drafts/cheques, as mentioned on pages 95 & 97 is at Rs. 1,16,50,863/- (Rs.80,12,863/- being total of page 95+Rs. 36,38,000/-, being total of p....
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.... 95, first entry dated 7/3/2005 reveals that demand draft of Rs. 7,85,000/- was arranged from Sultanpur through one 'Jhaji ' for which 'Jhaji' was paid Rs. 7,87,639/- which included commission of Rs. 2639/- (probably charged by the bank). Thereafter, it is further noted by learned CIT(A) that similar facts emerged from other entries also and vide questionnaire dated 08/02/2013 and subsequent queries, the assessee was required to explain nature and detail of such entries and how the same are recorded in the books of accounts. In reply, it was submitted by the assessee that, this is working paper made by the cashier of Sultanpur to reconcile the cash received by him and payments made. Thereafter, it is observed by CIT(A) that the reply furnished by the assessee is not satisfactory inasmuch as it lacks evidence and tries to disown the facts of the impugned document. This categorical finding of CIT(A) could not be controverted by Learned A. R. of the assessee before us and therefore, we do not find any reason to interfere in the order of CIT(A) on this issue. When the assessee could not bring evidence to establish that the cash transactions shown in seized material is duly recorded in ....
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.... disallowance is made on the basis that the vouchers produced are neither full nor verifiable inasmuch as complete identity of the payees is not mentioned therein. He has also noted that as per the A.O. many vouchers are self-made debit vouchers without verifiable detail of payees. Thereafter, he has also observed that the Assessing Officer could not point out any defect in any specific voucher nor did Assessing Officer invoke provisions of section 145(2) of the Act and the A.O. did not reject the books of accounts. Thereafter, he has held that in absence of specific defect, no ad hoc disallowance can be made. He has also held that the general observation of the A.O. that the vouchers are self-made cannot be a basis for addition. At best, it can be a starting point for enquiry but if the vouchers were defective, the Assessing Officer should have pointed out the defects and should have asked the assessee for a reasonable explanation. 9. So is the case in assessment year 2006-07. In this year also, the Assessing Officer made similar disallowance of Rs. 71,44,748/- to the extent of 1% of total expenses of Rs. 7144.74 lac with the same observation that the vouchers produced are neit....
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....against the assessee. 13. On issue No. 3, Learned DR of the revenue supported the assessment order and learned AR of the assessee supported the order of CIT (A). Reliance was placed on the tribunal order rendered in the case of Koya and Co. Construction (P) Ltd. vs. ACIT as reported in 32 CCH 43 (Hyderabad). On issue No. 4, Learned D. R. of the Revenue supported the order of Assessing Officer whereas Learned A. R. of the assessee supported the order of learned CIT(A) for assessment year 2009-10 and 2010-11. Regarding assessment year 2007-08 and 2008-09, he submitted that in these two years also, the issue should be decided in favour of the assessee because the claim was made in the return of income filed u/s 153A and as per the provisions of clause (a) of sub section (1) of section 153A, the return furnished u/s 153A should be considered as if such return was a return furnished u/s 139 of the Act. 14. We have considered the rival submissions. Regarding issue No. 3, we find that the decision of CIT(A) in assessment year 2009-10 is contained on page Nos. 36 to 44 of his order, which are reproduced below for the sake of ready reference: "For this year also the appellant....
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....ties held that assessee was only a contractor carrying on construction of infrastructure and, therefore, was not eligible for deduction under section 80-IA(4) - Facts revealed that agreement was not for a specific work, but for development of facility as a whole ; that material required was to be brought in by assessee by sticking to quality and quantity irrespective of cost of such material; that assessee utilized its funds, its expertise, its employees and took responsibility of developing infrastructure facility; and that assessee handed over developed infrastructure facility to Government on completion of development - Whether, on facts, assessee was a developer and not a works contractor and, therefore, was entitled to deduction under section 80-IA - Held, yes [In favour of assessee] Words & Phrases : 'Owned' as occurring in clause (1)(a) of section 80-1A(4) of the Income-tax Act, 1961. FACTS The assessee claimed deduction under section 80-IA(4) for the years under consideration for developing infrastructure projects under different authorities, like, HUDA, ICICI Park, HMWSSB, TNWSDB, TWAD, etc. The claim of the assessee was that the company had been....
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....m, etc. [Para 21] According to sub-clause (a), clause (i) of sub-section (4) of section 80-IA the word 'it' denotes the enterprise carrying on the business. The word 'it' cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by anyone. Even otherwise, the word 'it' is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility. [Para 22] The next question to be answered is whether the assessee is a developer or mere works contractor. It purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee with the Government. In the instant case, the Gover....
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....5-2010, such activity is eligible for deduction under section 80-IA(4). This cannot be considered as a mere works contract but has to be considered as a development of infrastructure facility. Therefore, the assessee is a developer and not a work contractor as presumed by the revenue. The circular issued by the Board, relied on by the assessee, clearly indicates that the assessee is eligible for deduction under section 80-IA(4). The department is not correct in holding that the assessee is a mere contractor of the work and not a developer. [Para 23] As per the provision of the section 80-IA, a person being a company has to enter into an agreement with the Government or government undertakings. Such an agreement is a contract and for the purpose of the agreement a person may be called as a contractor as he entered into a contract. But the word 'contractor' is used to denote a person entering into an agreement for undertaking the development of infrastructure facility. Every agreement entered into is a contract. The word 'contractor' is used to denote the person who enters into such contract. Even a person who enters into a contract for development of infrastructure facility....
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....al know-how, expertise and financial resources. Therefore, if the contracts involve design, development, operation & maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract, to deny the deduction under section 80-IA. The contracts which contain above features to be segregated, have to be granted deduction under section 80-IA, and the other agreements, which are pure works contracts hit by the Explanation to section 80-IA(13), are not entitled for deduction under section 80-IA. The profit from the contracts which involve design, development, operating & maintenance, financial involvement, and defect correction and liability period is to be computed by the Assessing Officer on pro-rata basis of turnover. The Assessing Officer is directed to examine the records, accordingly, and grant deduction on eligible turnover, [Para 25] I also place reliance on Hon'ble ITAT Pune Bench 'A' case of Rohan & Rajdeep Infrastructure. The Reverie, 1st Floor, 805, Bhandarkar Institute Road, Pune-411004 Vs. Assistant Commissioner of Income Tax, Cir.-3, Pune, ITA No.1214/PN/2010 A.Y. 2006-07 and order dated 05.0....
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.... 26 km qualify for deduction u/s 801A(4) as a new infrastructure facilities. We are not going into the cost working but the drawing specifications are necessary to understand what exact work is done by the assessee on said road. Assessee has given a drawing in this page.............. ........................... ........................... The above drawings (part of Bid Document) shows Existing Road (A) and New Road (B) which support the contention of the assessee that the thickness as well as the width of the road have been increased. Now the question is whether it can be said that it is merely repair and maintenance work ? And our answer should be in favour of the assessee that it is not merely a repair and maintenance work but doing entire restructuring of existing road The learned counsel has placed is reliance on the CBDT Circular No. 4/2010 dated 10.05.2010..." "...10 The CBDT has clarified the expression "New infrastructure facility". In fact the said circular supports the claim of the assessee that the widening of existing road by constructing additional lane as a part of the highway project is a new infrastructure facility. So f....
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....allow deduction to the assessee..." Further clarification on type of works covered u/s 80IA has been given by the CBDT's Circular NO.4/2010 [F.NO. 178/14/2010-IT(A-I)], DATED 18-5-2010 which are as under: Section 80-IA(4)(\) of the Income-tax Act, 1961 - Deductions - In respect of profits and gains from infrastructure facility - Clarification regarding widening of existing road - Definition of a new infrastructure facility CIRCULAR NO. 4/2010 [F.NO.178/14/2010-IT(A-I)], DATED 18/05/2010 References have been received by the Board as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of section 80-lA(4)(i) of the Income-tax Act, 1961. Section 80-IA(4)(i) provides for a deduction to an undertaking engaged in developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility subject to satisfaction of the conditions laid down in the section. The Explanation to section 80-IA(4)(i) states that for the purpose of this clause, infrastructure facility means inter alia :-(a)a road including toll road, a bridge or a rail system; (b)a highway ....
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....in the of roads and bridges was provided by the NHAI and UP PWD. This fact is duly referred to in the copies of agreement as well as in the payment advices, where in no amount was deducted by the agencies on account of material. The maintenance of the existing facility during the period of development also was of the appellant company and so also was the risk during the period to maintain the infrastructure and after the completion of development of road and its handing over to the Government, the risk period of the appellant company was of 12 months for maintenance of the road. Further the appellant company has not subcontracted his work. In this case Statutory Report in form 10CCB under Rule 18BBB as prescribed by the CBDT was also filed along with the return. Wherein the Auditors have duly certified that the assessee was a developer of road and has maintained separate books of accounts wherein all details have been recorded and nothing adverse was noted by the Assessing Officer relating to this. Therefore, after considering all the facts the appellant company fulfills all the criteria of a developer as per section 80IA(4)(i) and by his works a new infrastructure facility in the ....
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....de available under Section 80IA (4) itself. Further, the very fact that the legislature mentioned the words (i) "developing" or (ii) "operating and maintaining" or (iii) "developing, operating and maintaining" clearly indicates that any enterprise which carried on any of these three activities would become eligible for deduction. Therefore, there is no ambiguity in the Income-Tax Act. We find that where an assessee incurred expenditure for purchase of materials himself and executes the development work i.e., carries out the civil construction work, he will be eligible for tax benefit under section 80 IA of the Act. In contrast to this, a assessee, who enters into a contract with another person including Government or an undertaking or enterprise referred to in Section 80 IA of the Act, for executing works contract, will not be eligible for the tax benefit under section 80 IA of the Act. We find that the word "owned" in sub-clause (a) of clause (1) of sub section (4) of Section 80IA of the Act refer to the enterprise. By reading of the section, it is clears that the enterprises carrying on development of infrastructure development should be owned by the company and not that the infr....
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....n progress. Any loss to the public caused in the process would be the responsibility of the assessee. The assessee has to develop the infrastructure facility. In the process, all the works are to be executed by the assessee. It may be laying of a drainage system; may be construction of a project; provision of way for the cattle and bullock carts in the village; provision for traffic without any hindrance, the assessee's duty is to develop infrastructure whether it involves construction of a particular item as agreed to in the agreement or not. The agreement is not for a specific work, it is for development of facility as a whole. The assessee is not entrusted with any specific work to be done by the assessee. The material required is to be brought in by the assessee by sticking to the quality and quantity irrespective of the cost of such material. The Government does not provide any material to the assessee. It provides the works in packages and not as a works contract. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Govt. or the people in the process of such deve....
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....he assessee wherein it was held that mere development of a infrastructure facility is an eligible activity for claiming deduction under section 80IA of the Act after considering the Judgment of the Mumbai High Court in the case of ABG Heavy Engineering [supra]. The case of ABG is not the pure developer whereas, in the present case, the assessee is the pure developer. We also find that Section 80IA of the Act, intended to cover the entities carrying out developing, operating and maintaining the infrastructure facility keeping in mind the present business models and intend to grant the incentives to such entities. The CBDT, on several occasions, clarified that pure developer should also be eligible to claim deduction under section 80IA of the Act, which ultimately culminated into Amendment under section 80IA of the Act, in the Finance Act 2001, to give effect to the aforesaid circulars issued by the CBDT. We also find that, to avoid misuse of the aforesaid amendment, an Explanation was inserted in Section 80IA of the Act, in the Finance Act-2007 and 2009, to clarify that mere works contract would not be eligible for deductions under section 80IA of the Act. But, certainly, the Explan....
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....by assessing officer on pro-rata basis of turnover. The assessing officer is directed to examine the records accordingly and grant deduction on eligible turnover as directed above. It is needless to say that similar view has been taken by the Chennai Bench of the Tribunal and deduction u/s. 80IA was granted in the case of M/s. Chettinad Lignite Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27th July, 2007 for the assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26th February, 2010 the Tribunal has taken the same view by inter-alia holding as follows: "7. Moreover, the reasons for introducing the Explanation were clarified as providing a tax benefit because modernisation requires a massive expansion and qualitative improvement in infrastructures like expressways, highways, airports, ports and rapid urban rail transport systems. For that purpose, private sector participation by way of investment in development of the infrastructure sector and not for the persons who merely execute the civil construction work or any other work contract has been encouraged by giving tax benefits. Thus the provisions of section 80IA shall not apply to a p....
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....o. 4 is that the assessee has claimed the deduction u/s 80IA(4) in the return filed by it u/s 153A and not in return of income filed by it u/s 139(1). In this regard, it was the submission of Learned D. R. of the revenue that the provisions of section 80AC are relevant and therefore, we reproduce the provisions of section 80AC herein below: "Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible u/s 80IA or s. 80IAB or s.80IB or s. 80IC or s.80ID or s.80IE, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139. 16. We find that this aspect was decided by CIT(A) by making following observations on page No. 36 of his order in assessment year 2009-10, which is reproduced below for the sake of ready reference: "I have perused the facts stated in the assessment order as well as assessee's submission. For this Assessment year 2009-10 due date for filing of Income Tax Return was 30-09-2009 a....
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....in 198 ITR 297 (SC), it was held that reassessment proceedings are for the benefit of revenue and not for the benefit of the assessee and therefore, no new claim can be made by the assessee in reassessment proceedings. On the same analogy, search and subsequent assessment proceedings u/s 153A are also for the benefit of revenue and not for the benefit of the assessee and therefore, no new claim can be made by the assessee in proceedings u/s 153A. But the decision of CIT (A) is on this basis that in assessment year 2009-10, the time available for filing revised return of income to revise the return filed u/s 139 (1) had not expired on the date of search on 14.09.2010 as it was available up to 31/03/2011 and for assessment year 2010-11, the due date for filing return u/s 139 (1) was up to 31.10.2010 and for revising the return up to 31/03/2012 and the search has taken place before this i.e. on 14/09/2010. He has also noted that in both these years i.e. assessment year 2009-10 and 2010-11, the original return of income was filed by the assessee without claiming deduction u/s 80IA but within the time available u/s 139(1) because in assessment year 2009-10, the original return of income....
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....e Revenue supported the order of Assessing Officer whereas Learned A. R. of the assessee supported the order of learned CIT(A). 19. We have considered the rival submissions. We find that this issue has been decided by CIT(A) in favour of the assessee by making following observations on pages 44 to 52 of his order, which are reproduced below for the sake of ready reference: "I have perused the facts stated in the assessment order, Remand Report as well as facts stated in the assessee's submission and Rejoinder. The assessee has made an investment in property at B-5/21, Vishal Khand, Gomti Nagar, Lucknow, on 13.05.2008.The Assessing Officer in the assessment order has mentioned that as the assessee could not explain the investment made in the subject property before the Assessing Officer, the A.O. referred the matter or investment in house construction u/s 142A of the I.T. Act to the Departmental Valuation Officer(DVO), Accordingly, vide this office letter dated 08-012-2013, reference was made u/s 142A to the DVO to elucidate correct cost of construction (reconstruction/furnishing as claimed by the assessee). The Valuation Officer submitted his report dated 16-03....
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.... cost of construction on basis of DVO's report and reduced addition to some extent - Whether reference under section 142A to DVO without rejecting books of account regularly maintained by assessee was without jurisdiction - Held, yes - Whether action of Commissioner (Appeals) for estimation of construction cost on basis of DVO's report could not be approved particularly when Assessing Officer made reference to DVO without rejecting books of account - Held, yes [Paras 7 and 10]. I.T.A.T. Agra Bench [2012] 27 taxmann.com 17 (Agra). Without prejudice to legal position as stated above we would like to submit regarding the valuation report of the DVO as under: 2. That the assessee had purchased land and building vide purchase deed dated 13-05-2008, which included a land and constructed building area of 511 sq.mts as stated in the deed (copy enclosed). An additional area of 377.49sq.mts..(888.49-511) along with some changed in the internal structure was added to this construction. However, the Ld. D.V.O. not given the credit for such existing construction which was purchased by the assessee, as the cost of the same was included in the cost of the purchase. The purchase ....
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..... DVO has stated in his report that no details were provided. Since the reference was not as per the provisions of section 142A(i) of I.T. Act 1961 so no details were provided. However, all the required details were filed before your honour. 8. That the assessee had shown and investment in the building as under: Purchase of property as per deed 58,00,000 Add Stamp duty 5,80,000 Total cost of purchases of land and 511 sq.mts. of constructed area 63,80,000 Cost of construction of 377.49 sq. Mts. of building and Renewals etc. 95,96,116 Total amount of investment as per books 1,59,76,116 Thus the amount of investment for the area constructed by the assessee and renewals is Rs. 95,96,1166/- 9. The point of discrepancies in DVO area as under: a. Area of 511 st.mts. as per deed valued at Rs. 35,82,400/- should be taken and not at the value worked as per CPWD rates. The areas of construction and its photo at the time of purchase are being enclosed as slated above. b. The base rate have been taken as 2007 rates and additions of 83% have been added to the value worked out by the DVO....
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....ent worked out in valuation report as only investment in present structure has been accounted. 3. No proof of construction in year 2008-09 has been given with objection hence it is untenable. No modification in cost index is required. 4. No proof of self-supervision/construction has been given therefore no weightage on this account can be given. No proof of purchase on competitive rates has been given hence claim is untenable. 5. The enclosed working of rates is untenable as the areas has been reduced which is contrary to what is existing. 6. In absence of period of construction the valuation is prepared as per existing norms of value as on date of inspection. 7. No comments. 8. Already replied under Para 2. 9. (a) Areas as per deed is inadmissible in light of averments under Para 2. (b)Already replied under Para 3. Cost index enclosed by assessee is for Delhi and not Lucknow. (c)Percentage of services has been rightly taken for entire new structure area. (d)No credit for self supervision is admissible in absence of its proof. The Assessing Officer observed that: In view of the above ....
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....ercial building. Moreover, this is a search case hence in the absence of any incriminating material found/seized during search, no addition can be made. Further, books of accounts have not been rejected. In this regard my attention is also drawn to the Supreme Court Case Law in the case of Sargam Cinema. In this regard, reliance is placed on the following judgments: (1) Sargam Cinema v. Commissioner of Income-tax (2011) 197 Taxman 203 (SC) Headnote: "Section 142A of the Income-tax Act, 1961 - Assessment - Estimate by Valuation Officer in certain cases - Whether an assessing authority can refer any matter to Departmental valuation Officer without books of account being rejected - Held no" It is only an estimate. Reliance is placed on Supreme Court's Case of "2..Sargam Cinema (2010) 328 ITR 0513- Sargam Cinema V. Commissioner of Income tax (Supreme Court of lndia) that.. 1 Valuation report has been considered to be only an opinion, so that it cannot form a firm basis either for assessment or for assumption of jurisdiction for reassessment . It has been so seceded in various contests, some of which are available even in the present....
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....son to differ from the view taken by the Tribunal, particularly, as no material was found in the search and seizure operations, which would justify the Assessing Officer's action in referring the matter to the DVO for his opinion on valuation of the said properties. If that be the case, then the valuation arrived at by the DVO would be of no consequence. In any event, the Tribunal has also, on facts, held that the DVO's valuation was based on incomparable sales, which is not permissible in law. (3) CIT vs. SMT. SURAJ DEVI [2011] 64 DTR (Del) 372; 2010 328 ITR 604 Income from undisclosed sources-Addition under s.69BUndisclosed investment in property vis-a-vis report of DVO-Primary burden of proof to prove understatement or concealment of income is on the Revenue-Opinion of the DVO, per se, is not information and cannot be relied upon without the books of account being rejected -Moreover, no evidence much less incriminating evidence was found as a result of the search to suggest that the assessee had made any payment over and above the consideration mentioned in the registered purchase deed -Addition not justified. Held: It is settled law that the ....
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....is of addition made by the Assessing Officer. The Tribunal held in favour of the assessee. On appeal;(Held) dismissing the appeal, that no addition could be made solely on the basis of the report of the Departmental Valuation Officer. CIT v. S.K. Construction Co. {2008} 167 Taxman 171 (Del.)-followed, Commissioner of Income Tax v. Naveen Gera [2010] 328 ITR 0516 (Del.)-followed , Commissioner of Income tax v. Smt. Suraj Devi[2010] 328 ITR 0604 (Del)-followed, Commissioner of Income - tax v. Bajrang Lal Bansal (2011)335 ITR 0572 (Del.)-followed. Further jurisdictional High Court has also held the same view: (i)The decision of the Apex Court in the case of Sargam Cinema (supra) has been followed by the jurisdictional High Court in the case of CIT vs. Lucknow Public Educational Society reported in (2011) 339 ITR 588 (Alld). (ii)ITO Versus Dr. Mahendra Kumar Agarwal 2007 (9) MTC 97 (Trib. Alld) Headnote: "Income-tax Act, 1961- Section 69A- investment in construction of building- Department valuer estimating cost at higher amount-No evidence that cost shown was not correct-Books of account not held incomplete or incorrect-Addition of difference as ....
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....s not valid. In the present case also, reference was made without rejection of books of accounts and therefore, the same is not valid. On merit also, he has given a finding that the Assessing Officer has not considered this aspect that this property was directly purchased by the assessee and then renovated and photograph of the building before renovation and after renovation was submitted before the Assessing Officer and the said investment was duly disclosed by the assessee in its income tax returns but the DVO report does not say that there is an extra investment over and above the declared amount. His report is only an estimate of the fair market value and not an estimate of investment. He has given a finding that the DVO's valuation report is based on fair market value and this fair market value is relevant for Wealth Tax purposes but under section 69, the term used is unexplained investment in the property. He has given example that if investment is made of Rs. 1,00,000 in April, 2003 and the fair market value of the same building in December, 2003 becomes Rs. 1,45,000/-, then no addition can be made of Rs. 45,000/- being difference between investment in April, 2003 and fair m....
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....peal for assessment year 2011-12 as per ground No. 5, which is reproduced below: "5. That the learned CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,91,000/- made by the Assessing Officer on account of vehicle running expenses without appreciating the fact that the addition has been made on the basis of incriminating material found during the search." 24. Learned D. R. of the Revenue supported the order of Assessing Officer whereas Learned A. R. of the assessee supported the order of learned CIT (A). 25. We have considered the rival submissions. We find that in Para 7 of the assessment order for assessment year 2011-12, it is noted by the Assessing Officer that in the course of search, a document inventorized as on page No. 195 of Annexure A-11, there was payment of Rs. 2,91,000/-against repair of three vehicles. The Assessing Officer asked the assessee to explain as to how this payment was recorded in the books of accounts and also prove its genuineness and business purpose. In reply, it was submitted by the assessee before the Assessing Officer that the transaction is duly recorded in the books of accounts but the Assessing Officer did not a....
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....assessment order, it is noted that during the course of search, a number of incriminating documents were found and seized and on examination, it was found that the documents inventorized as page No. 20 to 26 and 33 to 34 of Annexure A-24, contained details of cash payments exceeding Rs. 20,000/- made by the assessee in respect of certain expenditure in violation of provisions of section 40A(3) of the Act. The Assessing Officer has made summary of these pages and the total amount has been worked out at Rs. 69,83,015/-. As per Para 8.1 of the assessment order, the Assessing Officer asked the assessee to explain the reasons for such cash payments but no compliance was made and therefore, the Assessing Officer drawn inference that the assessee does not have any material to prove that the default was compulsive and covered by Rule 6DD of the I.T. Rules, 1962. In view of these facts, the Assessing Officer invoked the provisions of section 40A(3) of the I.T. Act and the total amount of Rs. 69,83,015/- alleged as paid in cash exceeding Rs. 20,000/- was disallowed. When the assessee carried the matter in appeal before the CIT(A), he deleted the disallowance. It is noted by CIT(A) on page No....