TaxTMI 
TaxTMI 
2016 (6) TMI 649
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....irm wherein he was partner. The appellant filed return of income for the assessment year 2006-07 declaring his total income at Rs. 18,11,187/-. The return was thereafter taken in scrutiny and Assessing Officer made an addition of Rs. 51,69,458/- under Section 69 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') as unexplained investment in a residential house at Shimoga. The addition was made with regard to purchase of residential house for a consideration of Rs. 66,56,142/- which included the stamp duty payment. The value of the property by the Assessing Officer was taken at Rs. 90,51,000/- as against actual consideration reflected in the sale deed at Rs. 60,07,377/-. It appears that after document was presented for registration, the objection was raised by the stamp department for the deficit stamp duty. As per the value fixed for the purpose of stamp duty, the assessee paid difference of the stamp duty on the basis of the valuation made for the stamp duty. The same was one of the aspects considered by the Assessing Officer and then the matter was referred to the valuer for the purpose of valuation and consequently the difference of Rs. 51,69,458/- was added by a....
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.... estimating the cost of land in that area and the cost of building after allowing depreciation. Hence, it is not guess work or estimate as relied upon by the assessee. It is based on the rate of the property sold during the relevant time in that area which was collected from the office of the Sub-registrar, Shimoga. Since the unexplained investment on the basis of value determined by the stamp duty authority is less than the value determined by the Departmental Valuation Officer, the addition under this head u/s. 69 of the Income-tax Act, 1961 is done considering the difference between the value determined by the Departmental Valuation Officer and the value shown by the assessee in the return of income filed i.e., Rs. 51,69,458/- (Rs.1,18,25,600/- - Rs. 66,56,142/-). The amount of Rs. 51,69,458/- is added to the total income of the assessee u/s. 69 of the Income-tax Act, 1961." 9. The Commissioner (Appeals) while considering the said aspect observed at para 8.2 as under:- "8.2 I have carefully considered the submissions of the appellant and judicial decisions relied upon and the material facts emanating from the order of the AO and the remand report on this issue. In this cas....
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....al valuation officer has adopted a valuation of Rs. 97,98,771/- for land and Rs. 20,26,793/- for the building. The assessees's registered valuer has valued the building at Rs. 18,53,113/- and that of the land at Rs. 51,40,964/-, total of Rs. 69,94,000/-. The valuation of the property was also considered by the District Registrar/the appellate authority. When the matter of under valuation of the property was initiated against the assessee, the District Registrar/the appellate authority has determined the value of the land at Rs. 79,61,525/- and that of the building at Rs. 21,60,000/-. 13. On going through the three sets of valuation reports available with us, we find that more effective and realistic valuation was that of the District Registrar, Shimoga. So, we direct the assessing authority to re- compute the capital gains on the basis of the valuation decided by the District Registrar, Shimoga through his proceedings dated 18.05.2006." 11. The principal contention raised by the learned counsel for the appellant-assessee was that while invoking power under Section 69 of the Income Tax Act, the initial burden would be upon the revenue to prove that unexplained investment has b....
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....see has failed to discharge the burden of sufficient explanation, the same can be added to the income for the purpose of taxation. He submitted that it cannot be said that the Tribunal has committed any error which may call for interference by this Court. 13. Before we consider further case, it would be appropriate to refer to certain case-laws having direct bearing on the invoking of the power under Section 69 of the Act. The High Court of Delhi in case of Commissioner of Income Tax vs Puneet Sabharwal reported in (2011) 338 ITR 485, had an occasion to examine the question as to whether the Appellate Tribunal was right in holding that notwithstanding the report of the District Valuation Officer, the Revenue had to prove that the assessee had in fact received extra consideration over and above the declared value of the sale in the sale deed. While answering the said question at para Nos.8 and 9, it was observed thus:- "8. As far as question No.2 is concerned, as already indicated above, the Assessing Officer solely relied upon the report of the District Valuation Officer. Apart from this, there was admittedly no evidence or material in his possession to come to the conclusion....
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.... consideration to examine as to whether the Tribunal committed an error in not relying upon the District Valuation Officer's Report under Section 142A and thereby deleting addition of the income based on the said report. The High Court of Delhi after considering the aforesaid question, observed at para Nos. 4 and 5 as under:- "4. Only point to be considered is whether the valuation rendered by the DVO is to be taken into account or not. It has been argued by the learned counsel for the revenue that the assessing officer was justified in referring the matter to the DVO for an opinion with regard to the fair market value of the property and once that opinion has been rendered, the same has to be taken into account and if that were to be so, the addition of Rs. 2,81,83,000/- would be fully justified. Consequently, it was submitted by the learned counsel for the revenue that the Tribunal had erred in deleting the addition. On the other hand the learned counsel for the respondent referred to a Division Bench decision of this Court in the case of CIT v. Shri Puneet Sabharwal: (2011) 338 ITR 485. In that decision a specific question had been raised as to whether the Income Tax Appellat....