TaxTMI 
TaxTMI 
2025 (8) TMI 836
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....018 for AY 2016-17. All the appeals have same nature of facts and common issue; therefore, all the appeals were heard together and are disposed of by this consolidated order. ITA No.526 & 527/Mum/2024 are taken together. ITA No.526 & 527/Mum/2024 2. The assessee, in individual capacity, filed the return and return was processed under section 143(1) of the Act. The case was selected for scrutiny under CASS and notices under section 143(2) was issued. It was noticed that the assessee had purchased House Property, which is below the stamp duty valuation. The stamp duty valuation of the property was Rs. 9,98,65,550/- whereas the assessee's purchase cost was Rs. 3,06,00,000/-. So the difference amount of Rs. 6,92,65,550/- was added back with the total income of the assessee. The assessee purchased three properties for two different agreements on dated 23/10/2013. The assessee vide letter dated 15/12/2016 has requested the Ld.AO to refer the case to the DVO. Accordingly, the case was referred to the DVO on dated 16/12/2016. But the assessment was completed before 31/12/2016. So, the Ld.AO completed the assessment and confirmed addition amount to Rs. 5,40,10,760/-. Finally, the D....
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.... made Investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory the value of the investments may be deemed to be the income of the assessee of such financial year." Thus, considering the above-mentioned facts & discussion and language of Section 43CA, 50C & 69 of the income-Tax act 1961, this Appellate authority upholds the addition made by the Assessing Officer amounting to Rs 6,92,65,550, but with a slight change that, this amount be considered as unexplained investment made by the Appellant towards the said purchase of property. B. DECISION W.R.T THE GROUND OF APPEAL NO.-4: This ground of appeals without adjudication as it is of a general nature and doesn't necessitate further consideration. In the result, the appeal of the assessee is NOT ALLOWED" 4. The Ld.AR further invited our attention to assessment order, the observations of the Ld.AO which is reproduced as below:- "4 The assessee during the year und....
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....ict Valuation Officer. Penalty proceedings u/s 271(1)(c) is being initiated separately for filing inaccurate particulars and concealment of income." ITA No.526/Mum/2024 5. After getting the rectification order, the demand U/s 143(3) of the Act was reduced, but the said order was duly challenged before the Ld.CIT(A) and the Ld.CIT(A) took an observation that the issue is already settled in the order pursuant to the assessment order under section 143(3) of the Act. So the section 154 demand is upheld and the appeal petition is duly rejected. The observation of the Ld.CIT(A) is reproduced below: - "Considering the above facts and discussion and language of Section 43CA And 50C of the Income-tax Act,1961 this Appellate authority has already passed the decision in the same matter in Assessee's own quantum appeal against the AO's assessment Order u/s 143(3) for this very AY 2014-15. The order passed by this Appellate authority dated 18.12.2023 in the said quantum appeal matter, upholding the addition, has thus decided the matter in the favor of the department and against the Appellant assessee and has accepted the full value as per stamp valuation authority / gover....
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....ta [2013] 32 taxmann.com 185 (Delhi), wherein it was held that: "4. The only point to be considered is whether the valuation rendered by the DVO is to be taken into account or not. It has been argued by the learned counsel for the revenue that the assessing officer was justified in referring the matter to the DVO for an opinion with regard to the fair market value of the property and once that opinion has been rendered, the same has to be taken into account and if that were to be so, the addition of Rs. 2,81,83,000/- would be fully justified. Consequently, it was submitted 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 485/16 taxmann.com 320/[2012] 204 Taxman 16 (Delhi) (Mag.). 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 qu....
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....rse of assessment proceedings. In this regard, it is relevant to state that the Hon'ble Supreme Court of India has held in the case of Smt. Amiya Bala Paul (supra) that reference to DVO, other than for the purpose of section 55A and section 269L was illegal. It was held by the Apex Court that the Assessing Officer cannot refer the matter to the Valuation Cell for estimating the cost of construction of the house property for the purpose of assessment. Since the Departmental Valuer could not be called upon by the Assessing Officer to estimate the cost of construction of the property, the report, if any, submitted by the Departmental Valuer cannot be relied upon by the Assessing Officer in estimating the cost of construction as the said report, in view of the above decision of the Apex Court, cannot be said to be a valid report. The Hon'ble Jurisdictional High Court in the case of Dr. Avinesh Kumar Agarwal (supra) has also held that the Assessing Officer does not have the power to refer a matter to the Valuation Cell under section 55A of the Act for making investigation under section 131(1)(d). Since the Assessing Officer merely made the above addition of Rs. 1,43,094 based on the DVO....
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....ained and it would not be prudent for the Tribunal to direct the income-tax authorities to make an inquiry in a particular manner, as the Tribunal is an appellate authority and is required to decide the issue on the basis of the material before it." Applying the ratio of Sadhna Gupta (supra) and Rohtas Projects Ltd. (supra) to the facts of the present case, we hold that the Ld. AO had correctly applied the provisions of law while framing the assessment, whereas the Ld. CIT(A) erred in invoking section 69 to confirm the addition. We find no justification to sustain the impugned appellate order, which is accordingly quashed. Consequently, as the order passed under section 154 is entirely dependent upon the order under section 143(3), and the latter has been quashed, the rectification order under section 154 also fails and is hereby set aside. The Ld. DR has not cited any contrary judicial precedent to rebut the submissions of the Ld. AR. So, both the appeals of the assessee are succeeded. 8. In the result, the appeal of the assessee bearing ITA No.526 & 527/Mum/2024 are allowed. ITA No.528/Mum/2024 9. In the present appeal, the assessee had sold certain properties, and....
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....tion on the observations of the Ld.CIT(A). The relevant part of the said order is reproduced as below:- "vi. It is pertinent to mention here that, the Appellant Assessee has not provided any of the sale deed or purchase papers of the said property to this Appellate authority. vii. Further, no copy of the said DVO report have been filed by the assessee before this Appellate authority. It had been questioned to the Appellant that the AO has mad additions us 43CA of the Act. And that made to understand that, the sale of immovable property is one which is not a capital asset. Further. Phat the assessment order is subject to the DVO's report and which does not seem to have been received during the assessment proceedings. It was also queried whether any father orders may have been passed by the AO in this case (AY) s. 155(15) rw section 154 of the Act. No satisfactory responses were filed by the Appellant assessment. Further even the AO was asked to file its response towards these queries, but no such replies were received till date of this order. viii. The Assessing Officer on page no-2 of its Assessment Order stated that, the income tax Act is very clear ....