AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1143
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.... 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 the properties/investment made in the building....
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......................... 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 of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanat....
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....wan 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 assumption of facts by the AO as the property belonged to father of the assessee Sh. Hari Gopal. As such, Addition was Deleted b. Difference valuation of Joint Shopat Gopal Leela Bhawan, Patiala (Share 14.93%) Rs.1442099/- Rs.....
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....ss 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 take the State Public Works Department (PWD) rates and that the State PWD rates were more than 25% lesser than the CPWD rates. That even the DVO has added a sum of Rs.4,90,600/- on account of Builder's Effort, whereas, no evidence that the assessee has given any contract of the construction/renovation of the property to any builder. That even as per the DVO, the properties in question were improved/renovated during diff....
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....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 FY 2008-09 in books of Gopal Sweets Pvt. Ltd. Difference Appellant Share 74,53,755/- 71,84,834/- 2,68,921/- 14.93% 40,150/- 9. The ld. Counsel has submitted that the difference of amount of investment in the said property at Gopal Leela Bhawan Chowk, Patiala even as per the DVO's report is a meagre figure Rs.40,150/- which is less than 10% and is liable to be ignored. The ld. Counsel has further submitted that if the difference of valuation on account of 25% less State PWD rates, 10% to 15% saving on account of self- supervision/self-purchase of material is taken and further Rs.250000/- on account of unforeseen expenditure is to be deducted then the resultant figure will be minus. Further that the property situated at SCO 118, Phase II, Urban Estate, Patiala since was owned by the father of the assessee namely Shri Hari Gopal, hence the....
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....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 assessee were not pending before Assessing Officer - Further, there was no whisper/mention of any incriminating material seized during search to justify addition in these unabated assessments valuation report of DVO could not be held to be incriminating material as it was not a fall out of any incriminating material un-earthed during search to suggest any investment in immovable property which was over and above investment shown by assessee in its audited books - Whether, on facts, impugned invocation of proceedings under section 153A followed by an addition were unjustified - Held, yes [Para 28] [In favour of assessee] [Para 28] (ii) [2017] 82 taxmann.com 243 (Ahmedabad - Trib.) IN THE ITAT AHMEDABAD BENCH 'A' Champaklal S. Kasat v. Deputy Commissioner of Income-tax, Cent. Cir. 1(3), Ahmedabad* Section 69 of the Income-tax Act, 1961 - Unexplained investments (Immovable property) - Assessment year 2004-05 - Addition m....
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....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 the Department on this issue also stands dismissed.[Para 8.3] (v) 2013 (1) TMI 629 - DELHI HIGH COURT Other Citation : (2013] 351 ITR 20 COMMISSIONER OF INCOME TAX VERSUS ABHINAV KUMAR MITTAL Additions u/s 69 - search conducted u/s 132 - notice u/s 153C - valuation of properties referred to District Valuation Officer (DVO) - ITAT deleted the addition - Held that:- No reason to differ from the view taken by the Tribunal as no material was found in the search and seizure operations, which would justify the A0'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 - in favour of assessee. [Para 5] (vi) 2021 (10) TMI 1150 - ITAT CHANDIGARH SMT. JATINDER KAUR, SMT. HARBHAJAN KAUR VERSUS THE DCIT CC-1, LUDHIA....
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....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/- shown by the assessee. Hence, there was difference of Rs. 30,74,700/-. This was added to the income of the assessee. CIT(A) deleted the addition as there was no evidence of adverse material regarding payment of under hand consideration - Held that:- As no other incriminating material was found during the course of search CIT(A) is correct in this regard. Addition in this case has been made pursuant to search on the basis of Valuation Report of the DVO. It has been settled that in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO. See K.P. Varghese vs. ITO, Ernakulam & Anr. [ 1981 (9) TMI 1-SUPREME Court],C.I.T. vs. Abhinav Kumar Mittal [2013 (1) TMI 629 - DELHI HIGH COURT], C.I.T. Vs. Mahesh Kumar [2010 (8) TMI 64 - DELHI HIGH COURT]. Thus in the absence of any evidence that the assessee has invested more than value declared in the registered sale deed of property purchased, the addition in this regard on the basis of Valuation Report by the DVO is not sustaina....
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....OF KARNATAKA Commissioner of Income-tax, Central Circle v. Vasudev Construction* Section 158BB of the income-tax Act, 1961 - Block assessment in search cases - Undisclosed income, computation of (DVO report) - Block period 1-4-1989 to 28-1-2000 - Assessee-firm was engaged in business of construction of building and development of properties - During search, certain documents like bills of materials purchased, labour charges paid, cheques relating to assessee-firm were found and seized- Notice was issued under section 158BD calling upon assessee to file return of undisclosed income for block period 1-4-1989 to 28-1-2000 - Thereafter, valuation of cost of construction of buildings constructed by assessee-firm was referred to DVO, for valuation under section 133(6) - Assessing Officer added difference in valuation of cost of construction adopted by assessee-firm and DVO as undisclosed income - Whether since no material was found during search to indicate that assessee had not recorded expenses incurred on construction in books of account, in absence of any seized materials and solely on basis of DVO's report addition of undisclosed income under section 158BB could not be made ....
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.....2.13 crore - In builder's books of account, it was Rs. 1.39 crore - Tribunal had accepted figure given in books of account of builder as most authentic figure as that was actual amount which was spent on construction - No discrepancies were found in books of account of builder - Whether DVO's Valuation report per se have an element of discretion and are a matter of opinion and sale consideration received on transfer could be computed at figure shown in books of account of builder - Held, yes (Para 7] [In favour of assessee]" 12. The ld. DR, on the other hand, has relied upon the findings of the lower authorities. 13. In view of the facts on the file coupled with the above submissions of the ld. Counsel for the assessee, it is revealed that the AO has taken into account three properties i.e. one at Leela Bhawan Chowk, Patiala, second at Urban Estate, Patiala and third the loose sheet of payment relating to House No.762, Sector 8B, Chandigarh. Out of the said properties, the second property i.e Urban Estate, Patiala was not owned by the assessee. The conveyance deed of the said property was in the name of Shri Hari Gopal, father of the assessee. The ld. CIT(A) has also cat....