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2015 (10) TMI 2116 - ITAT DELHI

2015 (10) TMI 2116 - ITAT DELHI - TMI - Undisclosed investment in property purchased - addition confirmed purely on the basis of DVO report - Held that:- There was no evidence or material to suggest that the extra consideration has passed on from the assessee to the seller and no other material was available with the AO except DVO’s report for making addition under section 69B of the Act. Hence, respectfully following the judgments of the Hon’ble Jurisdictional High Court in the case of CIT Vs. .....

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(Appeals) - XXVIII, New Delhi raising following grounds of Appeal:- 1. The CIT [A] has erred in confirming the order of the learned AO making an addition of ₹ 1,43,26,000 as undisclosed investment in property purchased by referring to DVO without any material to substantiate more consideration has passed between the parties. 2 The learned CIT [A] has erred in ignoring the judgments of the Courts including jurisdictional High Court holding that addition for undisclosed investment in propert .....

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of addition of ₹ 1,43,26,000/- made by the learned Assessing Officer (in short ld. AO ) against undisclosed investment in property purchased, based on the valuation report of the District Valuation Officer (in short DVO ). The ground Nos. 4 and 5 of the assessee s appeal are being general in nature, no specific adjudication is required 3. The brief facts of this case are that the assessee filed its return of income on 31.10.2006 declaring income of ₹ 7,92,612/-. During the year unde .....

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e ld. AO has stated in his assessment order that local enquiries were conducted through the Inspector of his office wherein valuation of the property declared by the assessee was found on lower side and, therefore he referred the property for valuation to the DVO. The DVO determined the fair market value of the aforesaid property at ₹ 4,68,26,000/-. Based on the report of the DVO, the ld. AO proposed to the assessee, difference in valuation of the DVO and the value declared by the assessee .....

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22nd December, 2008 under section 143(3) of the Act. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals) [in short (CIT(A) ]. Before, the ld. CIT(A), the authorized representative of the assessee pleaded that no opportunity was provided to collect the evidences and therefore he filed additional evidence under Rule 46A of the Income Tax Rules, 1962. The ld. CIT(A) called for a remand report from the AO, who, in his remand r .....

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In view of the submission of the assessee, again a remand report was called for from the ld. AO calling for his comment. The ld. AO forwarded the submission of the assessee to the DVO, who in turn gave his comments on the various objections raised by M/s. K.D. Kohli and Associates and forwarded a detailed report to the ld AO. The ld AO then sent his remand report to the ld CIT(A). Both the remand reports were provided to the assessee for his comments. In his submission before the ld CIT(A), the .....

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ssee submitted that the there was no evidence or material in possession of the AO to come to the conclusion that the assessee has paid extra consideration over and above what was stated in the sale deeds. In support of this contentions the ld AR relied on the judgment of the jurisdiction High Court in the case of CIT Vs. Puneet Sabharwal (2011) 338 ITR 485(Delhi). He further relied on the judgment of the jurisdictional High Court in the case of CIT Vs. S.K. Construction Co. 167 Taxmann 171 (Delh .....

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rial on record. In ground no.1 the assessee has raised the issue that addition has been made by the ld. AO without any material to substantiate that more consideration has passed between the parties. In ground no.2 the assessee has raised that the ld CIT(A) has ignored the judgment of the jurisdictional High Court holding that the addition for undisclosed investment in property purchased cannot be made purely on the basis of the DVO s report. As the ground no. 1 and 2 are related to each other, .....

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er and above the amount stated in the sale deed. In the instant case also the lower authorities had not brought any evidence or material which could conclude that the assessee has paid any extra consideration over and above what is stated in the sale deed. Further in the case of CIT Vs. Shakuntala Devi 316 ITR 46, the jurisdictional High Court has decided as under:- ……………………. It has noted that the Department has failed to collect any inform .....

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he issue of reference to DVO u/s 142A of the Act and addition made u/s 69B of the Act that basis also came up before the ITAT Delhi A Bench in the case of ACIT, CC-5, Delhi Vs. Sh. Arvind Khanna in ITA No.1117/Del/2017 for the Assessment Year 2006-07, wherein the Tribunal after considering the arguments of both parties on this issue held as under:- 3. Ld DR supported the assessment order. It is also submitted by her that as per the provisions of Section I42A inserted by the Finance No.2 Act, 200 .....

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ehalf in the books of accounts maintained by the assessee. It was his submission that if some material is available with the A.O. on the basis of which, it is found by him that the actual payments made by the assessee is more than the declared value, then only an addition can be made u/s 69B and for that purpose, the matter may be referred to the DVO also u/s 142A. But in the present case, there is no material available with the A.O. to show that the actual value of the shares purchased by the a .....

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O to suggest/establish that the assessee had made expenditure more than what was declared or disclosed by him as a consideration to purchase the; impugned shares. It is also submitted that the purchase of shares in the present case is also supported by an agreement, copy of which is available on pages 40-51 of the Paper Book. It is submitted that this Tribunal decision is squarely applicable In the present case. Reliance was also placed on two judgments of Hon'ble High Court of Delhi rendere .....

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the declared amount of consideration for purchase of shares in question. As per the A.O., the matter was referred to the Valuation Officer : i.e. .DVO to determine the correct value of the property which was the only known asset of the company TDPL Hence, it is apparent that there was no adverse material available on record to establish/ suggest any extra payment by the assessee to acquire these shares. The facts of the present case are identical to the to the facts in the case of DCIT Vs Shri .....

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consideration to purchase the said asset. Hence, by respectfully following this Tribunal decision, we do not find any reason to interfere in the order of Ld. CIT(A) in the present case. 10. The judgements relied on by the assessee in the case of CIT Vs. S.K. Construction Co. (supra) and CIT Vs. Kalaivani (supra) also support the case of the assessee as there was no cogent material available with the ld. AO other than DVO s report, which could lead to inference that the investment declared by th .....

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