TaxTMI 
TaxTMI 
2015 (10) TMI 2848
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....but the grievance revolves around a single issue whereby it has pleaded that the ld.First Appellate Authority has erred in deleting the addition of Rs. 6,31,300/- made by the AO on account of unexplained investment made by the assessee in construction of residential building. 3. The brief facts of the case are that a search operation under section 132 of the Income Tax Act was carried out at the premises of Colourtex Group of Surat on 26.7.2006. The assessee is a member of this group and his premises were also searched on 26.7.2006. A notice under section 153A was issued upon the assessee. To this notice, the assessee has filed his return of income on 31.3.2007 declaring total income at Rs.63,45,634/-. The case of the assessee was select....
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....leted the addition by observing as under: "6. I have considered the facts and submissions of the appellant. I agree with the appellant's view. The property are residential flats and plots of land which were purchased by the appellant and on which no further expenses for addition or improvement was carried out by the appellant. No incrementing documents and evidences were found during the search. The property under consideration is registered with stamp authorities and is recorded in the books of accounts of the appellant and Assessing Officer not having found out any other defect or discrepancies, merely on the basis of valuation report of the VO/DVO, the investment in the property cannot be considered as unexplained and unaccounte....
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....s a purchaser. In view of the above facts and the ratio of the various decisions cited above it is held that Assessing officer was not justified in making the addition. Therefore, the addition made by the assessing officer is deleted." 6. Before us, at the very outset, the ld.counself or the assessee contended that various Hon'ble High Courts are unanimous on the point that if during the course of search, no incriminating material was found, exhibiting unexplained investment by an assessee, then merely on the basis of DVO's report, the addition cannot be made. He relied upon the following judgments: i) Hon'ble Gujarat High Court in the case of CIT Vs. Jayendra N. Shah, (2014) 52 taxmann.com 54 (Gujarat). ii) Th....
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....d 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. Puneet Sabharwal [2011] 338 ITR 485. In that decision a specific question had been raised as to whether the Income Tax Appellate Tribunal was right in holding that notwithstanding the report of the DVO the revenue had to prove that the assessee had received extra consideration over and above the declared value of the same. That question was answered by this Court in favour of the assessee and against the revenue. The Division Bench in the case of Puneet Sabharwal (supra) had also placed reliance on the decision of Supr....
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....tion. In these circumstances, the question which has been framed is decided in favour of the assessee and against the revenue. The appeal is dismissed." 9. Similarly, it is pertinent to note the observations of the Hon'ble Gujarat High Court in the case of CIT Vs. Jayendra N. Shah (supra). The observations in para-8 and 9 are worth to note. They read as under: "8. We have no reason to interfere with the concurrent reasonings of the two authorities below. Firstly, taking the issue of cost of construction, it clearly emerges from the record that between the DVO's estimation of cost of construction without furniture and fixture and that of the assessee's valuer, there is a minor difference of Rs. 1.22 lakhs. When we are considering....
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....rimarily on factual aspects. No question of law, therefore, these appeals are dismissed." 10. Similarly, in the case of CIT Vs. Berry Plastics P. Ltd., (2013) 35 taxmann.com 296 (Guj), the Hon'ble Gujarat High Court has made following observations: "9. We are of the opinion that CIT( Appeals) as well as the Tribunal committed no error in deleting the additions made by the Assessing Officer. It is undisputed that the sole basis for making the addition was the DVO's report. DVO's report may be a useful tool in the hands of the Assessing Officer, Nevertheless it is an estimation and without there being anything more, cannot form basis for additions under Section 69B of the Act. In absence of any other material on record, addition w....