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2018 (5) TMI 2096 - AT - Income TaxValidity of Assessment u/s 153A - incriminating documents found in search or not ? - HELD THAT:- In the instant case, we find that there is no dispute to the fact that no incriminating material was found pertaining to assessment year 2007-08 and only the purchase documents in the shape of registered sale deed were found which were duly disclosed in the regular books of accounts. Assessing Officer could not have reopened the assessment if in case the assessment has been completed earlier u/s 143(3) of the Act for the assessment year 2007-08 but this is not so in the case of the assessee because for the assessment year 2007-08 the return of the assessee was merely processed u/s 143(1)(a) of the Act which by no canon can be accepted as regular assessment and, therefore, the Assessing Officer had no occasion to examine the related transactions for the assessment year 2007-08. During the course of search, documents were found relating to purchase of property as well as incriminating material for undisclosed investment in construction of property which was sufficient enough for the Assessing Officer to initiate the assessment proceedings for the assessment year 2007-08 to assess the correct income of the assessee. We, therefore, set aside the findings of the learned Commissioner of Income Tax (Appeals) and hold that the assessment for the assessment year 2007-08 u/s 153A r.w.s. 143(3) of the Act was valid. The relevant grounds of the revenue for the assessment year 2007-08 are allowed. Addition for the undisclosed investment in land and building - HELD THAT:- On the objections raised by the assessee, learned Commissioner of Income Tax (Appeals) again directed for a fresh valuation. Vide Departmental Valuation Officer’s valuation report dated 17.5.2016 the fair market value of the property was valued assessment ₹ 70,05,000/-. As a result, the addition was sustained at ₹ 7,05,000/-. These facts clearly show that there was variation in the valuation report of the Departmental Valuation Officer. This is not the revenue’s case that there was any objection by the Registrar for payment of stamp duty and the purchase consideration was also not questioned. The alleged addition is also within the range of 10% of the cost of land and building shown by the assessee. We, therefore, are of the considered opinion that no addition was called for towards unexplained investment in purchase of property.
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