TaxTMI 
TaxTMI 
2020 (2) TMI 1180
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.... CIT(A) has erred in:- 1. Deleting the addition of Rs. 3,40,89,000/- made by the AO on account of explained income. 2. Admitting the additional evidence without giving the opportunity to AO under Rule 46A. 3. Holding that the reference to DVO held as invalid. 4. The assessee craves the right to add, alter or demand any ground of appeal." 3. The grounds raised in the Revenue's Appeal No. 3820/Del/2014 (AY 2009-10) read as under:- "On the facts and circumstances of the case and in law CIT(A) has erred in:- 1. Deleting the addition of Rs. 2,28,46,000/- made by the AO on account of explained income. 2. Admitting the additional evidence without giving the opportunity to AO under Rule 46A. 3. Holding that the reference to DVO held as invalid. 4. The assessee craves the right to add, alter or demand any ground of appeal." 4. At the time of hearing, Ld. Counsel for the assessee stated that the issues involved in these 02 appeals have already been adjudicated and decided by the ITAT, Delhi 'H' Bench, New Delhi vide its common order dated 30.6.2015 passed in Revenue's appeal in ITA No. 5698/Del/2014 i.e. A....
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....15 & CM No. 9241 / 2015 in the case of Commissioner of Income Tax vs. Anil Arora decided on 22.5.2014 wherein vide para no. 8 & 9 of the said order the Court has observed as under:- "8. Having heard the learned counsel for the Revenue, we find the contentions urged in the appeal to be wholly misplaced. It is fairly concede (at bar) by the counsel for the Revenue that the reference to DVO for estimation of the market value of the property in Punjabi Bagh was not based on any material discovered' or seized during the search operations. The counsel, however, referred to the case of another 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 r....
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.... 26,739 Rent Rent Recd. From Bharti Celuler Ltd., from DE-85, Tagore Garden, New Delhi Axis Bank Ltd., West Punjabi Bagh, J-1/161, Rajouri Garden, New Delhi 5. 19.5.2008 3,50,000 Stamp Duty Cash withdrawn from BOI A/c BOI Kirit Nagar J-1/161, Rajouri Garden, New Delhi The assessee also submitted the copies of bank statements of the BOI, Kirti Nagar and Axis Bank, New Delhi 10.4 From the above chart, it is clear that the assessee had made the investment in the aforesaid properties through her bank accounts at Axis Bank, West Kirti Nagar Branch, Delhi & Bank of India, Kirti Nagar Branch, Delhi. It was explained that during 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 th....
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....at the words mentioned in the above mentioned section "where an estimate of the value of any investment referred to in Sec. 69 ...... is required to be made . ... " means that a reference to the DVO be made only when a requirement is felt by the Assessing Officer for making such reference. Requirement would arise or could be felt only when there is some material with the AO to show that whatever amount the assessee has shown is not correct or not reliable. The use of the word "require" is not superfluous but signifies a definite meaning whereby some preliminary formation of mind by the AO is necessary which requires him to make a reference to DVO uls 142A. In other words, it is only during the course of pendency of the 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 re....
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....leging information in form of newspaper report about enhanced property prices in area, reference to Assessing Officer and addition based on his report were not justified." 10.8 On going through the records, we note that the assessee-company had during the relevant assessment year purchased a property in Delhi for a consideration of Rs. 11,84,926. The Assessing Officer invoked the provisions of section 142A and sent the issue to the DVO for valuation of the property at the fair market value. On the basis of report of the Valuation Officer valuing the property at Rs. 60,53,700 the Assessing Officer had treated the difference between the purchase consideration shown by the assessee and the fair market value as on the date of purchase determined by the 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 t....
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.... of its disclosed sources as accepted even by the Assessing Officer in the assessment. A perusal of the assessment order, however, shows 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 consideration shown by the assessee had actually been paid as consideration. The condition precedent for making a reference to the DVO by invoking the provisions of section 142A thus was not satisfied in the present case and neither the said reference nor the addition made on the basis of report obtained from the DVO in response to the said reference, in our opinion, was sustainable in Jaw as rightly held by the learned Commissioner of Income-tax tax (Appeals)." 10.12 We further find that similar views were taken in the cases 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 ....
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....ion in certain cases -Assessment year 2007-08 - Assessee sold an industrial plot for a sum of Rs. 2.90 crores - Assessing Officer made a reference to District Valuation Officer (DVO) to ascertain fair market value of plot on date of sale who arrived at a valuation of Rs. 5.36 crores - Assessing Officer without giving an opportunity of being heard to assessee, adopted valuation made by ova and, accordingly, enhanced amount of capital gain liable to tax - On appeal, Commissioner (Appeals) deleted addition made by Assessing Officer - It was noted from records that value of assessee's property as per circle rates was Rs. 2 crores as against sale consideration of Rs. 2.90 crores admitted by assessee - Further, there was nothing on record to suggest that assessee had received more than what was stated in sale deed - Whether in aforesaid circumstances, Assessing Officer 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, consequentl....