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2019 (7) TMI 88 - HC - Income TaxAddition in respect of the cost of construction of the residential building - addition of undisclosed expenditure based of valuation of property u/s 158BC - whether the investment in the house property represents undisclosed income and is liable to be included in the block assessment? - HELD THAT:- We are dealing with a case where it is a block assessment pursuant to a search and we are guided by the legal principles set out in the above mentioned decisions which clearly and consistently held that in the absence of any material found during the course of search regarding the undisclosed investment, the assessee cannot be penalized solely based on the valuation report provided by the Department. Valuation report was prepared much earlier to the search conducted in the assessee's premises and therefore, this valuation report obviously is a material which is very much available with the Department and the same could not have been the basis for holding that there has been an undisclosed investment. In the case of Bimla Singh [2008 (10) TMI 62 - PATNA HIGH COURT] the Court found that if the difference between the value given by the assessee and that of the DVO was less than 15%, it can be assumed to be a bonafide difference. In the case before us, the difference is less than 4%. The construction of the house commenced in October, 1997 and even on the day of the inspection by the Department valuer i.e., on 12.08.1999, the construction was in progress. Therefore, we would be well justified in holding that this difference of less than 4% has to be held as a bonafide difference. Assessee is entitled to succeed and the substantial question of law is required to be answered in favour of the assessee.
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