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TMI Blog2010 (2) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the property purchased by the assessee had been shown by the assessee as stock in trade. It was also the submission that the assessee had sold the property during the relevant Assessment Year itself. It was the submission that the DVO had valued the fair market value of the property at Rs.60,53,700/- and consequently the A.O. 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 of the property. It was the submission by the Ld. A.R. that in appeal before the Ld. CIT(A), the assessee had pointed out various defects in the valuation report of the DVO. He drew our attention to page 19 of the Paper Book, which was the copy of the letter addressed to the DCIT in the course of assessment pointing out the defects. It was the submission that these defects pointed out by the assessee have not been considered by the A.O. but have been accepted by the ld CIT(A) and the Ld. CIT(A) had consequently reduced the addition made by the A.O. by an ad-hoc amount of Rs.10 lacs. It was the further submission that when the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions raised were forwarded to the DVO for this opinion. Now, the DVO has forwarded his report vide his letter dated 11.12.2006. In this letter the DVO has dismissed all the objections put-forth by the assessee in respect of his valuation report in respect of property No.G-25, Green Park (main), New Delhi (second floor). The assessee company has shown Rs.11,84,926/- as the purchase/investment in the said property, whereas the value of the property has been determined by the DVO at Rs.11,84,926/-. As such, the difference between two valuations is Rs.48,68,774/-. This difference represents the unexplained investment, in the shape of unexplained/unaccounted expenditure, made by the assessee company on account of acquiring of the said property, which is not recorded in the books of accounts maintained by the assessee company. Since, the said amount is not appearing in the books of accounts, the said expenditure is met by the assessee company by way of deriving income from undisclosed sources. As such, I am of the opinion that income at least to the extent of Rs.48,68,774/- has escaped assessment within the meaning of the provisions of clause (c)(i) appended below expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have been sustained partly even on merits. It was the submission that the addition confirmed by the CIT(A) is liable to be deleted. 3. In reply, the Ld. D.R. submitted that the reference to the DVO had been made u/s 142A as the A.O. was of the opinion that the purchase price as declared by the assessee was low on the basis of information available in the print media such as newspapers about the enhanced prices of the property in the area where the assessee had purchased the property. It was the submission that the CIT(A) had upheld the comparative case method for the purpose of computation of the fair market value of the property and consequently the ad hoc reduction of Rs.10 lacs given by the CIT(A) was liable to be deleted and the order of the A.O. restored. He vehemently supported the order of the A.O. 4. We have considered the rival submissions. A perusal of the provisions of Section 142A shows that for the purpose of assessment or reassessment where an estimation of the value of any investment in bullion, jewellery and other valuable articles refers to Section 69, 69A, 69B was required to be made the A.O. may require the valuation officer to make an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation alleging information in the form of newspaper report about enhanced property prices in the area. Here also the information is lacking clarity in so far as what does the newspaper report talks of. Does it refer to the assessee's case and does it talk of earlier rates and the new rates. Does the report relate to the period during which the assessee purchased the property. One should keep in mind here that the assessee had purchased and sold the same property during the relevant Assessment Year itself and had declared the income from the business of purchase and sale of the property also during the relevant Assessment Year itself. This view of ours finds support from the decision of Coordinate Bench of this Tribunal in the case of Rajeshwar Nath Gupta referred to supra wherein the Coordinate Bench of this Tribunal has held as follows: "A perusal of the aforesaid provisions shows that Section 142A is attracted, inter-alia, where the assessee is found to have made investment outside the books of account or where any such investment made by him is not fully disclosed in the books of account. The condition precedent for making the reference by invoking the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there being no material on record to show that the sale consideration was understated or that the assessee had received anything directly or indirectly over and above the declared value of the shares, the addition made on account of deemed capital gains was not sustainable." In these circumstances, the reference made by the A.O. by invoking the provisions of Section 142A is found to be without justification and consequently no addition can be made on the basis of valuation made by the DVO. 5. In respect of the merits of the addition, which has a bearing to the revenue's appeal, it is noticed that the assessee did represent before the A.O. that the valuation report of the DVO contains various defects. This was done by a letter-dated 17.11.2006. A perusal of the assessment order shows that the A.O. has not considered the objection filed by the assessee. It is further noticed that the CIT(A) has considered the objection and has found weight in the objection and had consequently made an ad hoc reduction of Rs.10 lacs from the addition made by the A.O. which was on the basis of the difference between the value as declared by the assessee and the value as estimated by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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