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2015 (7) TMI 250 - ITAT DELHIUnderstatement of investment - Assessing Officer had treated the difference between the purchase consideration shown by the assessee and the fair market value as on the date of purchase determined by the DVO as unexplained money paid by the assessee for the purchase or the property - CIT(A) deleted the addition - Held that:- There was no reference whatsoever made by the AO to any material/evidence/information on the basis of which it could be said that the said that the investment shown by the appellant was understated and that anything above what was disclosed by the appellant. Thus, the condition precedent for making reference to the DVO by invoking the provisions of Sec. 142A was not satisfied in the present case. Moreover, on perusal of the assessment order, it is noted that nowhere the AO has mentioned that what are the mistakes and unreliability has been found out by the AO in the books of accounts of the appellant. Thus, the AO has not pointed out any defects in the books as far as related to the investment made by the appellant. Assessing Officer has erred in referring the matter to the DVO and consequently the DVO's report on the value of investment in the property cannot replace the actual purchase value shown in the purchase deed of the aforesaid property at J-1/161, Rajouri Garden, New Delhi. Hence, the Assessing Officer has erred in adopting the value of the property at J-1/161, Rajouri Garden, New Delhi estimated by the DVO by replacing the value shown in the purchase deed. Ld. First Appellate Authority has rightly appreciated the all evidences as well as the relevant provisions of law and deleted the addition in dispute. It is further observed that even after the receipt of the valuation report from the DVO, the Assessing Officer had given only one day time to the appellant to explain the difference in the value of the property as estimated by the DVO and the value shown by her in the purchase deed. This is against the principle of natural justice. In this regard it is seen that the AO had issued a show cause notice dated 21-03-2013 for submitting reply on 22-03- 2013 i.e. immediately next date, Therefore, assessing officer has not given sufficient opportunity of being heard to the assessee. It cannot be said that by giving opportunity of being heard for hearing immediately one day assessing officer has discharged his obligation of giving opportunity of being heard. Thus Ld. CIT(A) was right in observing that the AO has erred in making the addition ₹ 3,53,30,000/- on account of unexplained income of the assessee and accordingly rightly directed the AO to delete the addition in dispute - Decided against revenue. Additional evidence without giving the opportunity to AO under Rule 46A - Held that:- No additional evidence have been filed by the Assessee before the Ld. CIT(A), which required to be sent to the AO under Rule 46A and also in the Ld. CIT(A)’s order there was no mention about the admission of additional evidence - Decided against revenue. Claim of assessee u/s. 54 - CIT(A) rightly directed the AO to consider the claim u/s 54 - Held that:- As during the relevant assessment year, the assessee has sold a property at 20C/72, West Punjabi Nagar, New Delhi for the consideration of ₹ 95,00,000/- as per the registered value of the property (whereas during the course of survey, the same property was found to be valued at ₹ 3,87,00,000/- by a registered valuer). The assessee has claimed that the sale proceed of the aforesaid property at 20C/72, West Punjabi Bagh, New Delhi was invested in the purchase of property in the same assessment year at J-1/161, Rajouri Garden, New Delhi. We observed that the assessee was entitled for deduction u/s. 54 of the I.T. Act in respect of capital gain on the sale of property at 20C/72, West Punjabi Bagh, New Delhi. We further note that the assessee has also relied upon the decision of the Hon’ble Supreme Court of India in the case of National Thermal Power Co. Ltd. vs. CIT [1996 (12) TMI 7 - SUPREME COURT]. The AO has not considered the claim of exemption of the assessee u/s. 54 in respect of the capital gain arose in respect of the sale of property at 20C/72, West Punjabi Bagh, New Delhi. In view of the above, in our considered opinion, the Ld. CIT(A) rightly directed the AO to consider the aforesaid claim of the assessee of exemption u/s 54 of the I.T. Act, while computing the income of the assessee. We also find considerable cogency in the assessee’s counsel that Ld. DR itself was saying that the assessee has sold one property and purchased another, then there is no question why exemption u/s. 54 should not be given.- Decided against revenue.
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