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2012 (9) TMI 437 - ITAT AHMEDABADAddition on account of construction of building – Whether revenue can refer valuation of asset to DVO under any section other than section 55A & 269L under I.T. Act 1961 - The factory premises was referred to DVO by the ADIT – There was vast difference between the estimated cost of construction as per valuation report and the investment in construction of the factory as per the books - AO made an addition on the basis of as unaccounted investment u/s 69 – Held that:- As decided by the Hon’ble Supreme Court in the case of Smt. Amiya Bala Paul Vs CIT (2003 (7) TMI 4) held that the DVO would not have jurisdiction to give a report to the AO under the Income Tax Act except in terms of Section 55A or to Competent Authority u/s 269L. Appeal decided in favour of assessee. Addition on the basis of actual purchase consideration was more that registry rate of asset as unexplained investment u/s 69 – Assessee made investment in purchase of Land – AO found during search u/s 132 that, actual purchase consideration was higher than property registry rate - Addition was made on the basis of statements made by seller and broker that unaccounted payment received by them - Assessee contended that the statements were made under coercion which was endorsed by both the persons by retracting from their statements during cross examination - Held that:- The addition made merely on the basis of statements which allegedly given under pressure. The assessee filed sufficient material in support of retraction. There is no other material on record basis of which it can be said that on money was paid in transaction. Appeal decided in favour of assessee Addition made on account of unaccounted cash u/s 69A – During course of Search cash seized by AO from assessee residence - The assessee filed cash flow statement without supporting with evidence – The assessee could not maintain the personal book account - Held that:- No one has appeared before us even proper notice has been served on the assessee’s legal heir. Assessee submitted before the AO cash was found withdrawal made by him as a Director from the company. As per balance sheet submitted before the A.O., the assessee had shown hardly cash balances. Appeal decide in favour of revenue. Addition on account of household valuables - Assessee did not submit any explanation during the course of search u/s 132 & assessment proceeding - The assessee had not admitted the ownership of these valuable items - Held that:- It is the primary duty of the assessee to explain the source of things/valuables found during the course of search. Assessee even did not file any evidence regarding purchase of these household. Appeal decide in favour of revenue. Disallowance on account of Interest on deposit – The A.O. has noticed interest free advances whereas the assessee claims interest expenditure on deposit – Held that:- As the advance given prior to 3 years under year under consideration. In past, it appears that there was no disallowance under this head made by the A.O. Further, the A.O. has not established the nexus between interest free advances and interest bearing loans taken. Therefore appeal decides in favour of assessee. Addition on account of household expenses – Assessee had not withdrawn any amount for household purposes – Held that:- It is undisputed that he was having independent establishment for running the kitchen at his house. The assessee had not withdrawn a single penny for household purposes. There is no evidence produced by the assessee that he had received food from factory canteen. Appeal decides in favour of revenue
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