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2014 (2) TMI 1152 - ITAT DELHIUnexplained investment under sec. 69B - whether addition can be made on the basis of estimated value determined by the DVO? - Held that:- AO did not point out any defects in the books of account of the assessee. He simply observed that assessee was asked to explained the investment made in the properties. The assessee has produced the books of account and other details. AO observed that since assessee failed to give explanation about the investment, therefore, it was referred to the DVO. We could appreciate the case of the Assessing Officer, had he made reference to any documents indicating the alleged unexplained investment and thereafter confronted the assessee, but he has simply observed that assessee failed to explain the investment, therefore, he made a reference to the DVO. He has not rejected the book results of the assessee by pointing out defects. Thus the assessing authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. - Decided in favour of assessee. Royalty income - addition to income - Held that:- There is no basis to assume receipt of royalty income, more so, in assessment year 2003-04, in the case of Relax Pharmaceutical Pvt. Ltd.,a related concern, Learned CIT(Appeals) has deleted the exclusion of 1% of the net profit on account of alleged royalty payment. In the case of assessee, there is no such evidence on the record, therefore, this addition is not sustainable. Learned CIT(Appeals) has rightly deleted the addition in both the years. - Decided in favour of assessee.
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