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2016 (8) TMI 1500 - AT - Income TaxValidity of Reopening of assessment - Reopening on the basis of the DVO’s report and valuation - valuation given by the DVO - HELD THAT:- It is settled proposition of law that the information of the DVO per se is not an information for the purpose of reopening of assessment under Section 147 of the Act. It is mandatory requirement that the Assessing Officer has to apply his mind to the information if any collected and must form the belief thereupon. unless and until there is some other evidence to indicate that extra consideration had flown in the transaction of purchase of property, the DVO report cannot form the basis of any addition on the part of the revenue. In the case on hand apart from the DVO’s report there is no other evidence to indicate that the assessee has invested in the residential property during all these years as alleged in the DVO’s report. Therefore the same cannot be the basis of reopening of the assessment until and unless an independent corroborative material is available with the Assessing Officer to form the belief that the income assessable to tax being the investment made in the residential house during all these years has escaped assessment. Unexplained investment in construction of residential house while framing the reassessment - HELD THAT:- It is clear from the reassessment order that instead of making addition under Section 69 of the Act being the reason for reopening of assessment, the Assessing Officer himself has changed his mind and made the addition only on account of unexplained credit in the capital account. Therefore the basis of reopening itself was not found to be correct reason making any addition of income or reassessment of income when the Assessing Officer has finally framed the reassessment order. In the case of CIT Vs. Jet Airways (I) Ltd [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has held that the condition precedent to exercise on the jurisdiction under Section 147 is the forming of reason to believe by the AO that income chargeable to tax has escaped assessment and subsequently if the Assessing Officer found that as a matter of fact the same is not escaped assessment, it is not open to him independently to assess some other income. Accordingly, the reassessment of these five years is also not sustainable when the Assessing Officer has not made any addition of income on account of unexplained investment but made some other addition. In view of the above discussion, the reassessment for the Assessment Years 2004-05 to 2008-09 is not sustainable. LTCG on sale of gold - HELD THAT:- Assessee has shown the credit in his capital account of ₹ 1,80,000 as sale of gold and insurance of ₹ 51,244. The Assessing Officer made the addition by allowing only ₹ 10,000 as value of the gold as on the date of sale and consequently the balance amount of ₹ 1,70,000 was brought to tax which was claimed by the assessee as LTCG. It is apparent from the record that the Assessing Officer has not conducted a proper enquiry to find out actual market value of the gold and further whether the assessee has offered to tax the LTCG of ₹ 1,80,000. It is manifest from the assessment order that the Assessing Officer has made these additions purely on the basis of estimate and without conducting any enquiry about the actual amount realized by the assessee from these transactions. Accordingly in the facts and circumstances of the case, the matter is set aside to the record of the Assessing Officer for conducting a proper enquiry and giving an opportunity of being heard to the assessee and then decide the matter as per law.
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