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Shri. Raj Kumar Mittal Versus DCIT, Central Circle, Agra

2017 (12) TMI 351 - ITAT AGRA

Additions u/s 69 - Unexplained investments - Undervaluation of property - addition based upon the DVO's report - absence of any corroborative evidence - Held that:- It is not disputed that a readymade building was purchased by the assessee; that no evidence was found during the course of search action conducted at the residential premises of the assessee and other family members warranting such assessment proceedings in the case of assessee; that the assessee had purchased a constructed resident .....

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- Thus we hold that the AO could not tax the said amounts merely based upon the DVO's report in the absence of any corroborative material to point out under-valuation of the property in question. Therefore, we accept the grievance of the assessee as justified. Accordingly, the impugned orders of the ld CIT(A) are reversed and the additions are hereby deleted, for all the Assessment Years, i.e., from A.Y. 2007-08 to 2013-14. - Decided in favour of assessee. - ITA Nos. 47 to 52/Agra/2017 - Dated .....

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all the 6 assessment years under appeal, i.e., regarding confirmation of additions on the basis of the Departmental Valuer s report that after purchase on 07.09.2007 assessee carried out alteration and addition work thoroughly of very richer specification ,which according to the assessee is based on no evidence. Therefore, all these appeals are being decided by this consolidated order, for the sake of convenience. 3. Briefly stated, the facts on record are that the assessee is an individual der .....

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nder section 153A of the Act, by making identical additions on the basis of the report of the Departmental Veluer ( the DVO in short), in respect of the same property from A.Y 2008-2009 to A.Y 2012-2013. 3.1 The assessee, alongwith his other family members, had purchased a residential house bearing House No.55 at Ganesh Nagar, Firozabad, vide purchase deed dated 16.09.2007, in the previous Year 2007-08, relevant to the Assessment Year 2008-2009, for a total consideration of ₹ 62,32,500/-, .....

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#8377; 22,500/- towards incidental expenses, aggregating to ₹ 62,32,500/-(APB, Pages,44-71).During the course of assessment proceedings, the AO referred the property for purpose of valuation to the DVO, who estimated the investment at ₹ 1,57,97,400/- as against ₹ 62,32,500/-shown by the appellant. The AO, accordingly, worked out the difference and made addition in respect of Assessment Years from 2007-08 to A.Y 2012-2013, based on DVO report (APB, Page 63),as follows: A.Y. Decl .....

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,32,500/- 95,64,900/- 4. The Ld. CIT(A) confirmed the addition made by the Assessing Officer referring Section 153A of the Act, interalia, observing as under: 4.4 I have carefully gone through the assessment order and written submission sent by post received in this office on 02.12.2016. I do not find merit in the various contentions of the appellant. It is relevant to mention here section 153A of the Act. Explanation for the removal of doubts, it is hereby declared that - (i) Save as otherwise .....

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the house from District Valuation Officer. In fact, it would be unfair, if the A.O does not do so. The house property in itself is a documentary evidence and the A.O. has rightly taken it into cognizance for the assessing its value and consequently the correct total income of appellant. Therefore, I do not find force the contention of appellant given in his written submission. The decision and material facts of the cases relied upon the appellant are distinguishable on facts. Thus, the addition .....

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appellate proceedings(APB 63-71); that the addition was made solely on the basis of the report of the DVO, as the assessee has purchased a residential house bearing No. 49 & 50 at Ganesh Nagar, Firozabad, fully constructed, without any evidence on records that after purchase, any amount of investment, was made by the assessee which is not recorded, or which remained unexplained; that the Valuation Report is based on the assumption that as mentioned in para 5.4 of the Report, A readymade buil .....

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ained unexplained; and that the DVO has mentioned in para 7.3 that Assessee purchased readymade building having built up area 343.63 M2 two storyed of very ordinary specifications. Then after purchase the assessee done additions and alteration works thoroughly and internal works (and a few works on second floor also) building of very richer specifications and of built up area approximately 66 M2 . The ld Counsel for the assessee submitted that the DVO has no evidence in support of his claim in t .....

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CIT Vs Bajrang Lal Bansal , (2011) 335 ITR 0572 (Del),where the Hon ble Delhi High Court directed for deletion of the addition made on the basis of the report of the DVO holding that the report of the DVO alone is not an information warranting addition, in the absence of any incriminating evidence discovered during search(APB,90-92). 6.1 The ld. Counsel for the assessee further placed reliance upon the ITAT decision in the case of DCIT(Central Circle), New Delhi vs. Abhinav Kumar Mittal , in IT .....

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an be made simply on the basis of valuation Report,(APB- 84-85). The Hon ble High Court held as under: Section 69, read with sections 142A and 153C of the Income tax Act, 1961 Unexplained investments Immovable properties Assessment year 200607 Assessing Officer as a result of search conducted under section 132 upon a company and its directors issued on assessee a notice under section 153C He, in course of assessment proceedings, considered valuation of three properties, which had been purchased .....

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parable sales Whether valuation arrived at by DVO was of no consequence Held, yes Whether, therefore, appellate authorities were justified in deleting impugned addition made by Assessing Officer Held, yes [Para 6] 6.2 A similar view was reiterated by the Hon ble Delhi High Court in the case of CIT Vs Nishi Mehra , reported as (2015) 56 taxman.com 89 (Del),emphasizing that no addition can be made only on the basis of DVO s Report in absence of any corroborative evidence. (APB, 86-89). The Hon ble .....

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cepted by income tax authorities as well as wealth tax authorities, Assessing Officer could not tax said amounts merely based upon DVO's report in absence of any material pointing to undervaluation in block assessment proceedings Held, yes. 6.3 The Counsel also relied on the case of CIT-I Vs. Berry Plastics (p.) Ltd , [2013] 35 Taxmann.com 296 (APB,93) wherein it was held that- Section 69B, read with section 142A of the Income-tax Act, 1961 - Undisclosed investments [Investment in land and b .....

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of DVO could not be a conclusive evidence and there had to be some clinching evidence in form of proof to show that additional consideration had passed between buyer and seller - Tribunal confirmed order of Commissioner (Appeals) -Whether DVO's report may be a useful tool in hands of Assessing Officer, nevertheless it is an estimation and without there being anything more, cannot form basis for addition under section 69B - Held, yes - Whether, therefore, in absence of any other material on .....

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u/s 142A to ascertain the alleged unexplained investment of the assessee in the said property. Thus, the addition in dispute on account of alleged unexplained investment in the aforesaid property was made by the Assessing Officer on the basis of the valuation report of the DVO,obtained by way of reference u/s 142A of the Act. 9. It is not disputed that a readymade building was purchased by the assessee; that no evidence was found during the course of search action conducted at the residential p .....

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