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2015 (11) TMI 171 - ITAT AHMEDABAD

2015 (11) TMI 171 - ITAT AHMEDABAD - TMI - Unexplained investment made by the assessee in construction of industrial shed - CIT(A) deleted part addition - Held that:- Mere valuation report is not sufficient to conclude that the assessee has made unexplained investment. From perusal of the assessment, nowhere it reveals that inspite of search, Revenue was in a position to lay its hands on any material exhibiting the unexplained investment made by the assessee, over and above one stated in the boo .....

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me-tax Versus Jayendra N. Shah [2014 (11) TMI 47 - GUJARAT HIGH COURT]

As far as CO filed by the assessee is concerned, we are of the view that sub-section 4 of section 253 authorises the respondent to file cross-objection on receipt of notice in appeal. The CO is required to be filed within 30 days of receipt of notice and it is to be verified in the manner akin to an appeal, but, the CO is to be filed against any part of the order impugned in the appeal. In the CO filed by the asses .....

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ld.CIT(A)- II dated 17.6.2009 for the Asstt.Year 2002-03. 2. On receipt of notice in the Revenue s appeal, the assessee has filed cross-objections bearing no.CO No.235/Ahd/2009. The Revenue has taken five grounds of appeal, but the grievance revolves around a single issue whereby it has pleaded that the ld.First Appellate Authority has erred in restricting the addition of ₹ 5,03,200/- as against the addition of ₹ 24,59,822/- made by the AO on account of unexplained investment made b .....

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of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Income Tax Act dated 3.3.2008 was issued and served upon the assessee. The ld.AO has rejected the books result of the assessee. He found that the assessee had constructed a building at RS No.175, paiki, Block No.G-2, Bhestan, Surat. The AO was not satisfied with the cost of construction shown in the books of accounts. He formed an opinion that there was an under-invoicing of bills, and therefore, the ld.A .....

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, Surya Appt. City light, Surat. 1999-00: 2001-02 1429800 1938000 508200 2. Shri Kanakkumar J. Jariwala Plot S.No.90, FP No.55, Pvt. Plot- B, Bhestan, Surat. 2000-01; 2001-02 1600000 1889400 289400 3. Shri Kanakkumar J. Jariwala RS No.175 Paiki, Block A, Paiki Plot No.2, SI Patel, Bhesan, Surat. 2001-02 611111 3070933 2459822 4. Shri Kanakkumar J. Jariwala RS.No.175, Paiki, Block No.G-2, SI Patel Compound, Bhestan, Surat. 2003-04 0 272100 272100 4. On the strength of these details, the ld.AO has .....

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18,00,000/-. Further, the DVO as well as Assessing officer has not considered the various objection of the appellant like various common boundries, common wall etc. which will reduce the estimated cost of construction. Accordingly, after considering the assessee's submissions, in my view it will be reasonable to estimate cost (including land) at ₹ 23,03,200/- (i.e. 75% of ₹ 30,70,933/- the value determined by the DVO). After taking into account the correct cost disclosed in the b .....

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rely on the basis of DVO s report, the addition cannot be made. He relied upon the following judgments: i) Hon ble Gujarat High Court in the case of CIT Vs. Jayendra N. Shah, (2014) 52 taxmann.com 54 (Gujarat). ii) The Hon ble High Court in the case of CIV Vs. Vasudev Construction (2014) 44 taxmann.com 30 (Kar.) iii) CIT Vs. Berry Plastics P. Ltd., (2013) 35 taxmann.com 296 (Guj) iv) CIT Vs. Sadhna Gupta (IT Appeal No.434 of 2012) (Delhi HC); v) CIT Vs. Lahsa Construction P. Ltd., (2014) 42 taxm .....

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Gupta (supra) on the issue whether merely on the basis of the DVO s report, an addition can be made or not. The following finding is worth to note: 4. The only point to be considered is whether the valuation rendered by the DVO is to be taken into account or not. It has been argued by the learned counsel for the revenue that the assessing officer was justified in referring the matter to the DVO for an opinion with regard to the fair market value of the property and once that opinion has been ren .....

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ncome Tax Appellate Tribunal was right in holding that notwithstanding the report of the DVO the revenue had to prove that the assessee had received extra consideration over and above the declared value of the same. That question was answered by this Court in favour of the assessee and against the revenue. The Division Bench in the case of Puneet Sabharwal (supra) had also placed reliance on the decision of Supreme Court in K. P. Varghese (supra) as also on another decision of a Division Bench o .....

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ame decision of the Supreme Court in K.P. Varghese (supra) and also on a decision of this Court in CIT v. Smt. Shakuntala Devi [2009] 316 ITR 46. It was observed that there must be a finding that the assessee had received an amount over and above the consideration stated in the sale deed and for this the primary burden was cast on the revenue. It is only when this burden is discharged by the revenue that it would be permissible to rely upon the value as given in the valuation report of the DVO. .....

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ssessee and against the revenue. The appeal is dismissed. 9. Similarly, it is pertinent to note the observations of the Hon ble Gujarat High Court in the case of CIT Vs. Jayendra N. Shah (supra). The observations in para-8 and 9 are worth to note. They read as under: 8. We have no reason to interfere with the concurrent reasonings of the two authorities below. Firstly, taking the issue of cost of construction, it clearly emerges from the record that between the DVO's estimation of cost of co .....

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oever. Learned counsel, Shri K. M. Parikh, strenuously urged that the construction was carried out in three separate previous years relevant to different assessment years. The Assessing Officer had, therefore, divided the undisclosed investment in the cost of construction in these three years. Even if this be so, we fail to see how the total of these three years of expenditure could exceed ₹ 1.22 lakhs which was the difference between the DVO's valuation and that of the valuation of di .....

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ial. Moreover, the DVO had also substantially relied on jantri rates and had made other reference's for arriving at the valuation. 10. Both the issues are based primarily on factual aspects. No question of law, therefore, these appeals are dismissed. 10. Similarly, in the case of CIT Vs. Berry Plastics P. Ltd., (2013) 35 taxmann.com 296 (Guj), the Hon ble Gujarat High Court has made following observations: 9. We are of the opinion that CIT( Appeals) as well as the Tribunal committed no error .....

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