TaxTMI 
TaxTMI 
2024 (9) TMI 1438
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....done one-day delay in all the captioned appeals. 3. We have considered the reasoning for the delayed filing of the appeals before the Chandigarh Bench of the Tribunal and we find that the Assessees were prevented by genuine reasons for delayed filing of the appeals. The ld. DR did not object to this condonation of delay. Accordingly, the delay is condoned and we proceed to hear the appeals on merits. 4. Since the facts and issue involved in the captioned appeals are identical and are relating to same search action, therefore, these captioned appeals were heard together and are disposed of with this common order. First, we take up the Assessee Shri Shamsher Singh appeal, ITA Nos. 382/Chd/2022. 5. ITA Nos. 381 & 382/Chd/2022 for AYs 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 assesse....
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....otice, the return of income in respect of each assessment year falling with in six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and 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 ye....
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....i Hari Singh who expired on 5.4.2011 for the A.Y 2009-10 to 2011-12 (On the basis of valuation report of DVO) 27,25,127 Difference in valuation of shop at Gopal Leela Bhawan Chowk, Patiala. (on the basis of valuation report of DVO) 10,73,229 Unexplained investment in purchase of house property 762, Sector 8B, Chandigarh. (on the basis of loose sheet) 45,00,000 Total 82,98,356 6.2 The Ld. Assessing Officer, therefore, arrived at the satisfaction that the aggregate of income of the assessee which has escaped for the relevant assessment years was more than 50 Lakhs (Rs. 8298356/-), hence he reassessed the income of the assessee u/s 153A for the relevant assessment years as under: a) Addition of Rs. 15,44,838/- 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 jo....
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....as submitted that no incriminating material except the loose sheet relating to the unaccounted investment of Rs.45,00,000/- (1/4 share of assessee out of total investment of Rs.16000000/-) in House No.762, Sector 8B, Chandigarh relevant to A.Y 2011-12 was found, which amount was less than the prescribed limit of Rs.50,00,000/- as provided under 4th Proviso to section 153A(1) of the Act. He has contended that no other incriminating document or evidence was available to the A.O showing the escapement 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....
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.... 4,90,600/- 129 Total 1,68,43,900- 10. The ld. Counsel pointing out to the above table has submitted that the DVO has himself noted that the construction has been made from F.Y 1993-94 to 1996-97 and that only on account of additional items/accessories a sum of Rs.7453755/- has been 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/-, where as, 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 ....
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....inating evidence found in support of such addition. The relevant part of the case laws/ submissions of the ld. Counsel for the assessee in this respect is reproduced as under: "(i) [2021] 126 taxmann.com 158 (Kolkata - 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 asses....
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....ion of Sargam Cinema vs. (2009 (10) TMI 569 - SC ORDER] and in the case of CIT Vs. Nirmal Kumar Aggarwal (2018(10) TMI 2002- SC ORDER] as referred to supra in the contentions of the ld. AR. (iv) 2022 (5) TMI 1376 - ITAT 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....
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.... Assessment u/s 153A - Unexplained investment u/s. 69 - valuation report of the District Valuation Officer (DVO) - Estimation of value of assets by Valuation Officer - HELD THAT:- As relying on M/S. NARULA EDUCATIONAL TRUST 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 - va....
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....ion given by the DVO. As apparent from the factual narrative, the materials collected in the search operations impelled the A0 to complete the block assessment in this case. Conspicuously, however, there was no material 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 A0 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 investme....
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....ted addition holding that valuation report of DVO could not be a conclusive evidence and there had to be some clinching evidence in form of proof to show that additional consideration had passed between buyer and seller - 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 addit....
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....unt. The only evidence available to the AO was relating to the loose sheet where by the unexplained investment of the assessee has been taken by the AO at Rs.45,00,000/-. The provisions of section 153A are in itself a separate code. After the search action u/s 132 of the Act, the assessment/reassessment is reopened for the six years preceding the date of search. However, as laid down by the Hon'ble Supreme Court of PCIT vs. Abhisar Buildwell P Ltd. (supra) no addition can be made in respect of completed/unabated assessment years in assessments carried out u/s 153A in the absence of any incriminating material found during the search action. The assessment years beyond six years but not more than ten years can be reopened u/s 153A of the Act only if the AO is in possession of evidence depicting the escapement of income of aggregating Rs.50,00,000/- or more in such relevant assessment years beyond six years from the date of search. These provisions extending the assessment beyond six years and upto ten years put a stringent condition of possession of evidence with the AO of escapement of income of Rs.50,00,000/- or more. Such provisions extending the scope of assessment beyond six yea....