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TMI Blog2016 (1) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... Sitaram Dhemse. The sale consideration of the land as per registered sale deed is Rs. 12,50,000/-. The assessee filed his return of income for the assessment year 2007-08 on 29-10-2007 declaring income of Rs. 30,33,797/-. During the course of scrutiny assessment the Assessing Officer held that the assessee had made cash payment of Rs. 25,28,000/- as 'on-money' over and above the sale consideration of Rs. 12,50,000/- to Shri Dhemse. Shri Dhemse allegedly admitted the receipt of cash Rs. 25,28,000/- from the assessee as part of sale consideration. The assessee denied any cash payment of Rs. 25,28,000/- for purchase of the agricultural land. The matter was referred to DVO to determine the cost of land. The DVO determined the cost of land at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptions and estimations. The ld. AR further contended that one of the reasons for making addition was that Shri Dhemse from whom the assessee had purchased the land had admitted the receipt of Rs. 25,28,000/- in cash from the assessee. However, no opportunity was given to the assessee to crossexamine Shri Dhemse. Without affording opportunity to the assessee to cross-examine Shri Dehemse, penalty u/s. 271(1)(c) cannot be levied. The ld. AR further submitted that in quantum proceedings the addition has been made on the difference between the DVO's valuation report and the sale price quoted by the assessee, whereas, if the contentions of the Revenue are to be accepted, the addition should have been of Rs. 25,28,000/- i.e. the amount allegedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 12,50,000/-. The DVO in his report has determined the value of land as Rs. 33,30,000/-. In the assessment order, the Assessing Officer has given a finding that the assessee has paid Rs. 12,50,000/- through cheque and Rs. 25,28,000/- in cash as consideration for purchase of land. Thus, the total consideration allegedly paid by the assessee for purchase of land is Rs. 37,78,000/-. However, the addition has been made only to the extent of difference between the value determined by the DVO and the purchase price mentioned in the registered sale deed. It would be pertinent to mention here that the assessee has also obtained valuation report from the Government approved valuer. He has determined the value of land in question at Rs. 12,21,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross-examine the person on whose confession penalty was levied, the Hon'ble High Court held: "6. We have already stated the facts and circumstances of this case as appearing from the order of the Tribunal. The Tribunal has found that the department has not proved by any cogent evidence that the amount credited as loan taken from Raj Kumar Jain & Co. was the income of the assessee and that the assessee failed to disclose that income in his return. The Tribunal, on the facts, came to the finding that there was no case for levying penalty. That apart, the order of penalty is vitiated because of non-compliance of the principles of natural justice. The assessee was not afforded any opportunity to cross-examine the partner whose confession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans to the assessee. The assessing authority surely did not expect all the parties to come forward with records which by that time were about 15/16 years old. Despite that four of the parties who had given loans to the assessee in the assessment year 1966-67 and whose loans were treated as bogus loans in the original assessment came forward with the documents and satisfied the taxing authorities about the genuineness of the loans given by them to the assessee. Even for the assessment year 1967-68 only two parties who had given loans to the assessee aggregating to Rs. 75,000 were disbelieved on the ground that they were not produced before the tax authorities. The penalty proceedings were admittedly initiated in the year 1985. We are, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in a case where the DVO has enhanced the valuation of property. The DVO's report is merely an expression of opinion. Thus, on the basis of opinion and assumption no penalty u/s. 271(1)(c) is leviable. Offence of concealment is not proved in such situation which is the co-requirement for levy of penalty u/s. 271(1)(c) of the Act. Similarly, in the case of Sathe Biscuits Vs. DCIT (supra) the Co-ordinate Bench has held that no penalty can be levied on the addition made on the basis of DVO's report. 10. Thus, in view of the facts of the case and well settled law, we are of the considered view that no penalty is leviable u/s. 271(1)(c) in the present case. Therefore, the impugned order is set aside and the appeal of the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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