TMI Blog2015 (10) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... This view is settled by Hon'ble Supreme Court in the case of Sargam Cinema Vs. CIT (2009 (10) TMI 569 - Supreme Court of India ), wherein it is held that the AO could not have referred the matter to the DVO without rejecting the books of account. Here, in the present case also, the books of account are not rejected by AO. Hence, reference is bad in law. In the present case, the AO has not given any finding and has not brought on record any evidence to justify the undisclosed investment in the acquisition of these properties i.e. two flats. In such circumstances, we are of the view that the AO has not rightly proceeded for invocation of the provisions of section 69B of the Act. Accordingly, the unexplained investment added by the AO is wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,53,750/-. The AO required the assessee to explain as to why the circle rates as adopted by Stamp Duty Valuation by the Sub-Registrar be not added as the unexplained investment of the assessee because the assessee has shown lower consideration than the circle rates. On objection, the AO referred the matter to DVO, who submitted his report wherein the value of two flats were made at ₹ 26,53,500/- and ₹ 25,14,000/-. The AO rejected the explanation of the assessee and treated the excess amount of ₹ 31,67,500/- as deemed income of the assessee u/s. 69B of the Act (excess amount being the value declared by the assessee of both the flats at ₹ 19 lacs and valuation made by DVO at ₹ 51,67,500/- = ₹ 31,67,500/-). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this section the value would be deemed to be the value as taken the Stamp Authorities and in case of the same being challenged by an assessee the matter could be refrrred by the A.O. to the Valuation Officer for determining the Fair Market Value of the property. It may be mentioned that there is no provisions under the law for taking the deemed sale price as determined above for the purpoe of addition in the hands of the purchaser of the property. The provisions of law only provide for deemed value for computing capital gains in the hands of the seller. The reliance of the Appellant in the two dec sions citd by it i.e. in the case of Rupee Finance Management Pvt. Ltd. v. ACIT and K.P. Varghese v. ITO, supra is found to be justif ed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Law for using such Valuation Report in taxing the deemed consideration both in the hands of the seller (by virtue of provision 50C) and as well as in the hands of the purchaser. At most the A.O. could have passed on the information regarding the deemed consideration arrived t on the basis of such a Valuation Report in respect of the seller of the property to the jurisdictional Assessing Officer. In fact the invocation of Section 69B is also misguided as this section cannot be invoked to make the addition on the basis of the Report of the Valuation Officer and taking the value as determined only for the purpose of deeming provisions of section 50C and using the same to make addition u/s.69B. In fact, Section 69B provides for ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory requirements. According to assessee, the investments are declared in the books of account, which are not rejected by the AO for making reference to DVO. Neither the AO has brought on record any evidence regarding any investment made by assessee in the properties in excess of the amount mentioned in the sale deeds. The Ld. Sr. DR has not disputed these facts. Admittedly, the correctness of the figures incorporated in the books of account are not disputed by the AO, so there cannot be any reference to DVO within the premise of section 142A of the Act. This view is settled by Hon'ble Supreme Court in the case of Sargam Cinema Vs. CIT (2010) 328 ITR 513 (SC), wherein it is held that the AO could not have referred the matter t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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