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2019 (9) TMI 628 - AT - Income TaxUnexplained cash credit u/s 68 - share capital of the company which was treated as unexplained investments - HELD THAT:- Section 68 allows the assessing officer to make the addition of unexplained cash credit. As per section 68, the sum should be credited in the books of accounts of the assessee and the source of which remained unexplained. In the instant case, land and building was constructed by the co-owners and the same was transferred - no credit for which the source was remained unexplained. Since the assessee has furnished all the details of the co-owners with confirmation letters, income tax assessment particulars and produced all the directors except 4 mentioned in the assessment order, the burden of the assessee got discharged and shifted to the AO. AO has not conducted the enquiries, did not give any finding that the company infused cash credits in the books and made the investments from unexplained sources. In the instant case, since all the promoter directors / co-owners are assessed to tax, explained the sources for investment in land and building in their hands, there is no case for making addition u/s 68 of the Act in the hands of the company and if at all any unexplained investment remained, the same required to be examined in the hands of individual share holders / co-owners in the respective assessment years of investment. - Decided against revenue. Capital gain computation - validity of valuation report and the assessment made by the AO on the basis of the report of Departmental Valuation Officer (DVO) - CIT(A) held that the report submitted by the DVO is non-est in law and has no value in the eyes of the law. Accordingly deleted the addition made by the AO - HELD THAT:- Though the assessee raised objection before the AO, the AO ignored the objection raised by the assessee and discussed the issue of time limit available for completion of assessment and justified the assessment without considering the actual objection raised by the assessee. Since there is no extension of time for submission of report is allowed under the Act and no concession was made available to the DVO for non cooperation of the assessee, the report submitted by the DVO beyond the time limit is invalid and is to be treated as non-est. The Ld.CIT(A) rightly held that the report of the DVO cannot be relied upon or considered by the AO to frame the assessment u/s 143(3). In the grounds of appeal, though the department contended that AO has not fully relied upon the DVO's Valuation report and taken as a guidance, it is found from the order of the AO that the assessment was framed on the basis of the DVO’s report. From plain reading of the assessment order it evidenced that the AO has made the addition purely relying on the DVO’s report. Since the report of the DVO is non-est the assessment made on the basis of invalid report is unsustainable. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. Allowance granted CIT(A) on account of self-supervision and the rate difference - objection of the department is that the CIT(A) has taken inconsistent stand with regard to validity of the report and the concessions granted to the assessee on the same report relating to rate difference and self supervision - HELD THAT:- CIT(A) rightly adjudicated the grounds raised by the assessee both on validity of assessment made on invalid valuation report and also on rebates requested by the assessee. Thus we do not find any error in the order of the Ld.CIT(A) in adjudicating the alternate grounds. In this regard, we confine ourselves in holding that the Ld.CIT(A) is right in adjudicating the alternate grounds, but we are not going into merits of the order of the Ld.CIT(A) with regard to allowances granted by the Ld.CIT(A) in respect of rebate for rate differences, savings for self supervision etc. and the said issues are kept open. Since we have held that the additions made on the basis of invalid report are unsustainable, we uphold the order of the Ld.CIT(A) and dismiss the appeals of the revenue. Therefore, we consider it is not necessary to adjudicate the grounds raised by the revenue with regard to allowances granted by the Ld.CIT(A) in respect of rate differences and self supervision.
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