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2021 (5) TMI 957 - AT - Income TaxReopening of assessment u/s 147 - assessee had shown fixed assets but he had not offered any income from the said property except agriculture income - HELD THAT:- In our view this is a vague reason. Merely possession of a fixed asset does not mean that the assessee might have earned any income from the said asset which would have escaped assessment. Admittedly the assessee owns agricultural land where upon certain construction has been made by the assessee. It has been used for its own purposes. The reasons recorded by the Assessing Officer do not disclose that the assessee has used any of his assets for any business or rental purposes. The formation of belief by the AO in this case regarding the escapement of income of the assessee, in my view is based on just assumptions and presumptions and there was no reliable material available with the AO to form the belief that the income of the assessee had escaped assessment. In this view, re-opening of the assessment in this case, in my view is bad in law and the same is therefore quashed. Proportionate construction expenses - AO had adopted the Current Value of the construction exp. and added the proportionate const, exp.- AO not making any reference to DVO - HELD THAT:- First of all, it is seen that there was no evidence before the AO regarding the date of the construction of the property. Consequently, the value of the property has been made on estimation basis. Assessee has brought my attention to the report of the Valuer obtained from Punjab Vigilance Bureau upon which the AO has relied upon, wherein, the year of construction has been mentioned as 2008 to 2011. The value of the property, however, has been assessed as on 3.3.2015. Therefore, the value of the property has been estimated in the year 2015 and the addition has been made on proportionate basis taking the value of the property as on 3.3.2015, whereas, it is own case of the department that the property has been constructed from 2008 to 2011. The assessee had further requested the AO to get all the details in this respect from M/s. ICRMS company, however, the AO totally ignored the aforesaid request of the assessee and simply relied upon the report of the valuer attached alongwith the report of the Punjab Vigilance Bureau. As observed the said valuation was done as per the value of the construction in the year 2015. In this case, even the AO did not make any independent query. Moreover, the AO in the circumstances was supposed to refer the matter to the Departmental Valuation Officer to get approximate date of construction of the property as well as value of the property on the date of construction. No such exercise has been done by the AO. The addition has been made just on estimation basis on the borrowed satisfaction of the Punjab Vigilance Bureau without any independent investigation in the matter by the AO. Such an addition made on the basis of mere suspicion, in my view, is not sustainable in the eyes of law. This addition is accordingly set aside. Addition made by the AO as "income from other sources" as against declared by the assessee as 'agricultural income' - HELD THAT:- As before this Tribunal, assessee has submitted that the assessee has continuously been offering the agricultural land on Batai and that the aforesaid amount was earned by the assessee from agriculture operations. The ld. counsel has further submitted that during the subsequent years, the said lessee was examined by the AO and statement was also recorded and after having satisfied, no addition has been made in this respect in the subsequent years. Moreover, it has not been denied by the AO that the assessee is in possession of agricultural land and the lessee has admitted that he has paid aforesaid amount of ₹ 1.20 lacs as batai to the assessee. In view of this,we do not find any justification on the part of the AO to make the impugned addition. In view of this, the addition made by the AO on this issue is deleted.
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