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2023 (4) TMI 208 - ITAT INDOREUnexplained investment - AO observed that the assessee has made investments in construction of certain colleges - reference made u/s 142A - AO observed that the valuation shown by DVO was higher than the investment recorded by assessee in its books of account - Assessee argued AO made reference u/s 142A dated 24.09.2014 to DVO without rejecting books of accounts of assessee - HELD THAT:- As observed that the Ld. AO has not rejected books of assessee. We further observe that the Ld. AO made reference to DVO on 24.09.2014 and the DVO submitted report on 04.03.2015. Thus, the event of making reference to DVO had taken place before 01.10.2014 and that too without rejecting books of account. In such a situation, we suffice it to say that the Ld. AO was not justified to make a reference in the light of decision of Sargam Cinema [2009 (10) TMI 569 - SC ORDER] and the provision of sub-section (2) of section 142A. Assessment u/s 153A - Addition has been made in an unabated assessment year without having incriminating material, hence the same is not sustainable - HELD THAT:- As respectfully following the decision of Hon’ble jurisdictional in Gahoi Dal & Oil Mills [2019 (7) TMI 1050 - MADHYA PRADESH HIGH COURT] we find merit in the submission of Ld. AR that the addition made by Ld. AO without having any kind of incriminating-material is unsustainable. Decided in favour of assessee. Exemption u/s 11 - Denial of claim as activities of assessee were not genuine - HELD THAT:- We find merit in the submission of Ld. AR that the Ld. AO has not made any comment in the assessment-order for assessee’s ineligibility to exemption. CIT(A) has called for a specific remand-report from AO on this issue but the Ld. AO has not made any reporting on this issue, which clearly showed that there was nothing to justify denial of exemption. Weightage in the submission of Ld. AR that there is neither any kind of illegality in the working of society observed by revenue-authorities nor any kind of infringement of section 11 or 13 is available on record. Faced with such situation, we are of the considered view that the assessee was entitled to exemption u/s 11 and the Ld. CIT(A) has rightly directed the Ld. AO to grant the same. Unexplained investment - As per AO impugned land had been purchased/registered which was below the “prevailing market price” of land in that area and hence the assessee must have paid on-money @ 110% - HELD THAT:- Firstly, we observe that the Ld. AO had no evidence or material to establish the factum of payment of on-money. He has simply framed a view that the assessee must have paid on-money and such view was framed on the basis of so-called “prevailing market price”. Secondly, we note that the Ld. AO had no basis to estimate the “prevailing market price”. He has simply presumed on-money payment @110% and thereby made a mathematical working of prevailing market price - Thus, we fully agree with the findings made by Ld. CIT(A) that the Ld. AO has made addition on the basis of mere presumption, conjecture and guesswork. Needless to mention that there is no provision in Income-tax Act, 1961 which authorizes the AO to make such hypothetical addition. Being so, we have no hesitation in holding that the Ld. CIT(A) has rightly deleted the addition. Unexplained expenses - Assessee strongly claims that the impugned excel-sheet was not found from the hard disc of assessee as alleged by Ld. AO and despite repeated request of assessee, the source of excel-sheet had not been provided - HELD THAT:- On a careful scrutiny of assessment-order, we also observe that the Ld. AO has himself mentioned in Para 12.1 “The excel sheet does not contain the year wise breakup. A reasonable estimate of these year wise is as under”. This categorical mention by Ld. AO clearly admits that there was no basis for attributing the transactions to AY 2009-10 under consideration. CIT(A) has also held that there is no corroborative evidence qua the alleged transactions noted in the excel-sheet. Thus, there are serious infirmities in the addition made by Ld. AO. CIT(A) has considered those infirmities in the light of decided rulings and thereafter taken a conscious view to delete the addition. We do not find anything wrong in the action of Ld. CIT(A). Therefore, this ground of revenue is also dismissed.
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