Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 587 - ITAT AMRITSARUnrecorded/unaccounted income - Validity of valuation report submitted by the DVO - Period of limitation - valuation difference of hotel building - difference in the cost estimated by the DVO and the cost declared by the assessee - Addition is only the valuation report furnished by the DVO which has been obtained by the Id. AO during the course of search assessment proceeding - since the assessee has not fully disclosed the above-mentioned transactions/receipts in its books of accounts, the same were treated as unrecorded/unaccounted and therefore, the difference was added to the income of the assessee as undisclosed income to be taxed u/s 115BBE - assessee has submitted that the Ld. CIT(A) has erred in not appreciating the fact that the overall difference in the valuation report for all the years taken together is less than 10% and cannot be taken as a base for making the addition as the valuation report is just an estimate and cannot be taken into consideration for making the addition HELD THAT:- Admittedly, the sole basis of the addition is only the valuation report furnished by the DVO which has been obtained by the Id. AO during the course of search assessment proceedings. As per the provisions of section 142A (6) of the Act, it apparently clear that the valuation report has to be furnished by the Id. DVO within six months from the end of the month in which reference is made by the Id. AO. This issue is now well settled in case of Sargam Cinema [2009 (10) TMI 569 - SC ORDER]and in the case of CIT vs. Nirmal Kumar Aggarwal [2018 (10) TMI 2002 - SC ORDER] - Admittedly, in the present case, the valuation report is dated 28.10.2016 which is beyond the prescribed time of 30.09.2016. Hence, it is evident that the said valuation report of Id. DVO is barred by limitation and, hence, cannot be relied upon by either party in the eyes of law. Consequentially, in our view, no addition per se can be made by the Revenue by placing reliance on an invalid valuation report. Alternative plea that the valuation report considered by the CIT(A) cannot be relied upon as the DVO report which has been made on the basis of CPWD rated instead of PWD rates - Counsel in this regard, placed reliance upon the binding judgment of Sunita Mansingha [2017 (4) TMI 303 - SUPREME COURT] wherein, it has been held that for the purpose of valuating the property, the local rate should be applied and not CPWD rates and normally, there is difference of about 25% with respect to rate of CPWD and PWD rates. Thus, the addition has been made without providing the benefit of rate difference between CPWD and PWD rate. Considering the factual matrix of the case and judicial pronouncements, we hold that the order passed by the Ld. CIT(A) is infirm and perverse to the facts on record in confirming the addition based on invalid report of DVO and further without allowing benefit of the difference in the value as per law. Accordingly, the addition sustained by the Ld. CIT (A) is bad in Law and as such, same is deleted. Assessee appeal allowed.
|