TaxTMI 
TaxTMI 
2023 (11) TMI 1143
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.... up the Assessee Shri Kawaljit Singh appeal ITA No.385&386/Chandi/2022. 3. ITA No.385&386/Chandi/2022 for AY 2009-10 & 2011-12: The brief facts of the case, as extracted from the assessment order for A.Y 2009-10, are that a search & seizure operation u/s 132 of the Income Tax Act (hereinafter referred to as "the Act") was carried out on 25.10.2017 at the properties, business & residential premises of the assessee. During the course of search and seizure operation, several incriminating documents were found and seized from the premises of the assessee, which showed that the assessee had made substantial amount of unexplained investment in purchase as well as on construction/renovation of immovable properties, which has not been shown by the assessee in his accounts/ ITR (Income Tax Returns). Therefore, to determine the quantum of unaccounted income invested in various immovable properties, a reference u/s 132(9D) of the Income tax Act, 1961 was made by the DDIT(Inv.) to the Departmental Valuation Officer (DVO) in respect of the properties pertaining to the assessee and other family members vide letter 15.12.2017. The DVO prepared the valuation report and estimated the value of....
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....nd for the relevant assessment year or years: ............................................... Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; b) the income referred to in clause (a) or part the thereof has escaped assessment for such year or years; and c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.-For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end ....
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.... a) Addition of Rs. 17,00,349/- for AY 2009-10 in respect of difference in valuation of SCO 118 Urban Estate Patiala and joint shop at Gopal Leela Bhawan Chowk Patiala. b) Addition to the tune of Rs.18,39,475/-for A.Y.2010-11 in respect of difference in valuation of SCO 118 Urban Estate Patiala. c) Addition of Rs. 51,27, 402/- (Rs. 627402/- and Rs. 4500000/-) for AY 2011-12in respect of valuation difference of SCO 118 Phase 2 and amount paid for purchase of joint house no 762 Sector 8B, Chandigarh. 5. That against the said assessment orders of the Ld. AO, the assessee filed appeals with the CIT(A) for relevant assessment years. The Ld. CIT(A) vide impugned orders confirmed the additions to the tune of Rs. 1442099/- for A.Y2009-10 and Rs.4500000/- forA.Y.2010- 11. The summary of addition as made by AO and confirmed by CIT Appeal is asunder:- A.Y Particulars Addition made by the A.O Addition confirmed by the CIT Appeal Reason 2009-10 a. Difference in Valuation of the property situated at SCO 118 Phase 2, Urban Estate Patiala(In thename of Hari Gopal) Rs.258250/- 0 Wrong ....
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....pement of income for the 'relevant assessment years' as defined in Explanation 1 to 4th Proviso to section 153A(1) of the Act. He has contended that the evidence referred to in the Explanation 1 should be tangible evidence and the report obtained of the DVO after the search action, would not fall in the definition of evidence under 4th Proviso to section 153A(1). He has further relied upon various case laws to stress the point that even in the absence of any corroborating evidence, the addition solely on the basis of the report of the DVO cannot be made even in the normal course or even in case of abated assessment years on the date of search. He has further submitted that the report of the DVO was a mere estimation of investment and would not constitute as conclusive evidence of investment. That even the value of investment estimated by the DVO was highly disputed and cannot be formed basis for reopening of the assessment beyond six years from the date of search. He in this respect has submitted that the DVO has adopted Central Public Works Department (CPWD) rates, whereas, the property in question is situated in the State of Punjab and the DVO, otherwise was supposed to t....
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....en estimated. The ld. Counsel has further invited our attention to the relevant part of the DVO's report that even out of the additional items Rs.250000/- have been added on account of unforeseen items/work. The ld. Counsel has submitted that the A.O in calculating the difference on valuation has taken the entire figure of Rs.16843900/-, whereas, as noted above the DVO had covered only Rs.7453755/- for the financial year 2008-09 and that the amount of investment of the earlier years cannot be taken for calculating the difference. The ld. Counsel, therefore, has submitted that if the amount taken by the DVO of Rs.7453755/- for F.Y 2008-09 is taken then the difference will be of Rs.40150/- only. The ld. AR in this respect has furnished the following chart of calculation of difference : Calculation as per AO Total valuation Amount as per books of accounts for FY 2008-09 in books of Gopal Sweets Pvt. Ltd. Difference Appellant Share 1,68,43,900/- 71,84,834/- 96,59,066/- 14.60% 14,10,017/- Correct Calculation Amount as per books of accounts for F....
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.... Trib.) IN THE ITAT KOLKATA BENCH 'A' Assistant Commissioner of Income Tax, Central Circle-1(3), Kolkata v. Narula Educational Trust* Section 153A of the Income-tax Act, 1961 -Search and seizure - Assessment in case of (Incriminating material)- Assessment year 2008-09 - A search and seizure operation under section 132 was conducted at office/residence of assessee - Pursuant to search, DDIT (Investigation) made a reference to DVO in respect of valuation of immovable properties held by assessee - DVO furnished valuation report showing value of properties at higher amount than what was shown by assessee - Thus, Assessing Officer invoked assessment for six assessment years 2008-09 to 2012-13 under section 153A and, further, passed an assessment order making addition on account of difference in valuation of properties as submitted by DVO Assessee contended that in absence of any incriminating material found in course of search at premises of assessee, invocation of assessments of assessee under section 153A which were unabated on date of search was unjustified It was noted that on date of search admittedly assessments for said six assessment years 2008-09 to 2012-13 of ....
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....AT CHANDIGARH THE DCIT, CENTRAL CIRCLE-1 LUDHIANA VERSUS M/s. RAJAN ENTERPRISES AND VICE- VERSA Addition on account of difference in cost of construction as per the books of account and as per the report of the DVO - As it is an undisputed fact on record that no incriminating material or evidence was found during the course of search which could indicate that the assessee had made investment towards cost of construction outside the regular books of account. We also note that the Ld. CIT(A) had deleted the addition in this year by following the order of the Ld. CIT(A) for the immediately preceding assessment year. Since no material was found in the search and seizure operations which could justify the Assessing Officer's action in referring the matter to the DVO for his opinion on valuation of the said properties, then the valuation arrived at by the DVO would be of no consequence. Accordingly, in view of the above cited judicial precedents as well as the factual finding recorded by the Ld. CIT(A) in assessment year 2016- 17, which, in our opinion, is both sound as well as logical, we have no hesitation in upholding the same. Accordingly, the ground raised by t....
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.... AND M/S. NARULA EDUCATIONAL TRUST VERSUS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-1 (3), KOLKATA [2021 (2) TMI 459 - |TAT KOLKATA] From the perusal of panchnama and the assessment orders, it can be safely inferred that the reference made by DDIT (Inv.) for valuation of the properties was without any incriminating materials found during search [oral or documentary which could have suggested that the assessee has shown less investment in its books for building construction] Therefore, no addition was permissible in the assessment order u/s 153A of the Act in the case of un-abated assessments unless it is based on relevant incriminating material found during the course of search qua the assessee and qua the AY. - Decided in favour of assessee. [Para 15] (viii) 2013 (5) TMI 637 - ITAT DELHI ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-11, NEVW DELHI VERSUS MS. ASHA KATARIA Addition made upon the valuation done by the DVO - value of the property in this case as reflected in the registered sale deed was Rs. 33,00,000/-. Reference u/s. 142A was made to the DVO who determined the value of the property at Rs.63,74,700/- as against Rs. 33,00,000/- sh....
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....aterial in the course of the search or collected during the proceedings post search, pointing to under valuation of the assessees' properties which were ultimately held to have been the subject of under valuation. Again, significantly the assessees had at relevant time when the actual purchases were effected disclosed the transactional value of those assets; the AO has then unreservedly accepted them. Wealth Tax authorities too had accepted the valuation. - Decided in favour of assessee. (x) (2008] 166 Taxman 75 (Delhi) HIGH COURT OF DELHI Commissioner of Income-tax, Delhi-VII, New Delhi v. Ashok Khetrapal* Section 158B of the Income-tax Act, 1961 - Block assessment in search cases Undisclosed income - Assessment year 1999-2000- Whether where no incriminating material whatsoever was found during search that might show that assessee had made more investment in properties than their declared value, addition could not be made by treating investment as undisclosed on basis of any DVO's report - Held, yes (xi) (2014] 44 taxmann.com 30 (Karnataka) HIGH COURT OF KARNATAKA Commissioner of Income-tax, Central Circle v. Vasudev Construction* ....
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....ller - Tribunal confirmed order of Commissioner (Appeals) - Whether DVO's report may be a useful tool in hands of Assessing Officer, nevertheless it is an estimation and without there being anything more, cannot form basis for addition under section 69B - Held, yes - Whether, therefore, in absence of any other material on record, impugned addition was correctly deleted - Held, yes [Para 9] [ln favour of assessee] b) (2014] 41 taxmann.com 148 (Delhi) HIGH COURT OF DELHI Commissioner of Income-tax - VIII v. National Co-operative Consumers Federation of India Ltd.* Section 48 of the Income-tax Act, 1961 - Capital gain - Computation of [Full value of consideration] - Assessment year 2002-03 - Assessee was owner of lease hold land allotted by Delhi Development authority - Assessee entered into an agreement with builder for construction of a building and it was decided that on completion 50 per cent of building was to be handed over to assessee - In addition, builder paid Rs. 30 lakhs to assessee - Assessee submitted valuation report showing cost of its 50 per cent share as Rs. 1.14 crore - While value determined by DVO was Rs.2.13 crore - In builder's books of ....