TaxTMI 
TaxTMI 
2015 (10) TMI 2564
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.... in the circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 36,69,000/- made u/s 69 of the I.T. Act 1961 on account of unexplained investment in immovable property without appreciating the fact that prior to referring the property in question of the Valuation Officer for estimating the cost of investment, the A.O. had rejected the books of accounts of the assessee and duly recorded the reasons for the same on 02.11.2012. 2. That the appellant craves to add or amend any one or more of the grounds of the appeal as stated above as and when need for doing so may arise." 2. The facts in brief borne out of from the record are as follows: Search operations were carried out on 11.03.2011 by the Income Tax Departme....
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....16,69,000/- as against Rs. 80,00,000/- disclosed by the assessee. The resultant difference of Rs. 36,69,000/- was treated as unexplained investment in the hands of the assessee and was added to his income u/s 69 of the Act. 4. Perusal of the assessment order dated 26.03.2013 shows that in para 6.1 the assessee has submitted his objections to the reference to the Valuation Officer which read as under:- "6(1). In response to this query counsel of assessee submitted his objection as under: - With reference to the note sheet entry dated 18.10.2012 requiring us to furnish the bills/ vouchers etc in relation to construction of the above said house property, we would like to bring to your notice that the above stated property was purchased b....
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.... submissions made above, it is respectfully prayed that your goodself be pleased to apprise and consider the submissions by the assessee and if your goodself happens to hold a different view on any of the aspects of the matter, the same may kindly be specified so as to make further submissions." 5. Similar objection was also raised by the assessee on 20.02.2013 which has been reproduced by the AO on pages 4 and 5 of the assessment order. Another objection to the reference to the DVO was filed by the AO on 11.03.2011 which is reproduced on pages 7 and 8 of the assessment order. However, the AO completely relying on the report of the DVO calculated the additional investment by the assessee at Rs. 36,69,000/- and added it to the income of th....
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....n the appeal before us, none was present for the assessee. 8. Before us, it was the plea of the Department that the accounts submitted by the assessee were not reliable and although no books of accounts were maintained by the assessee, there was a complete absence of bills/vouchers and therefore the actual cost of construction could not be verified and the matter was referred to the DVO. It was also the plea of the Department that on perusal of the seized material, it was noticed that construction/renovation of immovable property had been done by the assessee but he has failed to produce all bills and vouchers relating to such renovation/construction in the property. 9. It will be worthwhile reproduce Section 142A of the Act (as it stood ....
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....vestment outside the books of accounts or where any such investment made by him is not duly disclosed in the books of account. The condition precedent for making the reference by invoking the provisions of Section 142A of the Act is that there should be something on record to show that the assessee in first place has made investment outside the books or the investment so made by him is not fully disclosed in the books of account. Once this condition is fulfilled, the quantum of such investment made can be ascertained by the Assessing Officer by making a reference u/s 142A and thereafter passing an order making addition u/s 69 or 69B as the case may be. As per the records, it is seen that the relevant property was purchased by the assessee f....
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.... Devi reported in 328 ITR 604 (Del.) has held that the primary burden of proof in such cases is on the Revenue and it is only when such burden is discharged that it would be permissible to rely upon the valuation given by the Valuation Officer. Similarly, the Hon'ble Delhi High Court in the case of CIT Vs. Lahas Construction Pvt. Ltd. reported in 357 ITR 671 (Del) has held that the addition solely on the basis of valuation report was not permissible. The Hon'ble Delhi High Court in the case of CIT Vs. Bajrang Lal Bansal reported in 335 ITR 572 (Del) has held that the primary burden to prove understatement or concealment of income was on the Revenue and it was only when such burden was discharged that it would be permissible to rely upon the....