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2023 (4) TMI 555 - AT - Income TaxInvestment in purchase of property - addition on basis of valuation report - applicability of provisions of Section 142A - assessee did not offer to tax the sum declared by him at the time of survey - As per assessee declaration given at the time of survey was under pressure and confusion and to buy peace - HELD THAT:- As clear from the order of the NFAC that there is no proper application of the mind. AO has made the addition u/s 69 of the Act. A careful perusal of the provision divulges that in order to invoke this provision, it is sine qua non that the assessee must have made investments which are not recorded in the books of account. The factum of the assesses having made investment should be first proved by the AO, only then the burden shifts on the assessee to prove the source of investment. Such investment outside the books of account must be positively proved by the AO and not only inferred from the attending facts. If such an investment outside the books is not proved, the assessee cannot be called upon to prove the source of such a hypothetical investment. Adverting to the facts of the instant case, we find that apart from relying on the DVO's report, the AO has not brought anything on record or any other material to indicate that the assessee did make investment in purchase of property over and above that declared in the books of account. Addition made by the OA and confirmed by the NFAC is unsustainable - Also provisions of section 142A of the Act are applicable only when the assessee has made investment in construction. In the present case, the assessee purchased a ready built house and therefore the provisions of section 142A of the Act are not attracted to the facts and circumstances of the present case. Hence, reference to the DVO by the AO was not valid and consequently, the addition made by the AO on the report of the DVO cannot be sustained. The same is directed to be deleted and the appeal of the Assessee is allowed.
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