TMI Blog2018 (10) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue in the grounds of appeal will not be applicable to the facts of the present case. We find identical issue had come up before the Tribunal in the case of Aditya Narain Verma (HUF) (2017 (6) TMI 542 - ITAT DELHI) Tribunal after considering the various submissions made by the assessee rejected such request of the Revenue as held Assessing Officer should have referred the valuation of the capital asset to a valuation officer instead of adopting the value taken by the state authority for the purpose of stamp duty. The very purpose of the Legislature behind the provisions laid down under sub section (2) to section 50C is that a valuation officer is an expert of the subject for such valuation and is certainly in a better position than the Assessing Officer to determine the valuation. Thus, non-compliance of the provisions laid down under sub section (2) by the Assessing Officer cannot be held valid and justified - decided against revenue - ITA No.6005/Del/2017 - - - Dated:- 8-10-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Department : Shri N. K. Bansal, Sr.DR For The Assessee : Mrs. Rano Jain, Adv. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the name of Rachit Garg and myself. v. That, I and Rachit Garg are now legally separated vide court order dated 21.04.2014. vi. That after divorce, I have transferred the 50% of share of the property to Shankar Fin Invest Private limited, through its director Mr. Subhash Chander Garg, a family run company of my ex-spouse Mr. Rachit Garg vide sale deed dated 26.05.2014. vii. That, Mr. Rachit Garg was the beneficial owner of the aforesaid property under the Income Tax Act, 1961. Hence, he will be responsible for any taxes if any levied by the income tax department against the aforesaid property. 4. Subsequently, the assessee filed an affidavit of Shri Rachit Garg, the contents of which have been reproduced by the Assessing Officer in the body of the assessment order and which read as under :- I, Rachit Garg, S/o Shri Ramesh Chander aged 28 years, Resident of BQ-57, Shalimar Bagh, Delhi-110088 do hereby solemnly affirm and declare as under :- i. That I am a regular income tax assessee having PAN: AKWPG6234G and having my jurisdiction with the Assessing Officer, Ward- 34(1), New Delhi. ii. That I had filed my income return for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that other properties in the area were also sold likewise. Two instances of such sale were brought to the notice of the ld. CIT(A). The valuation done by the Government approved valuer valuing the property at ₹ 75,40,000/- was also filed before the ld. CIT(A). It was further stated that at the time of making the addition the Assessing Officer did not issue any showcause notice to the assessee. The Assessing Officer had not given any opportunity to the assessee to file the relevant documents. It was accordingly submitted that the addition made by the Assessing Officer should be deleted. 7. The ld. CIT(A) forwarded all the evidences to the Assessing Officer for his comments. The Assessing Officer confirmed that the various documents filed before the ld. CIT(A) such as copy of valuation report and the letters written to the then Chief Minister of Delhi were filed during the course of assessment proceedings but the Assessing Officer had not considered the same. However, the sale instances of the two properties in the nearby areas were not produced before the Assessing Officer during the course of assessment proceedings wherein the properties were sold well below the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office letter F.No. CIT (A)- 14/ 17 -18/71 dated 15.06.2017 for his comments u/s 250(4) of the Act who vide his office letter No. ITO Ward 41(1)/2016-17/255 dated 29.06.2017 has submitted his report which has been reproduced above. The Addl. CIT Range-41, New Delhi while forwarding the said remand report of the Ld. AO vide his office letter F.No. Addl.CIT/Range-41/Remand Report/2017-18/203 dated 29.06.2017 has mentioned that additional evidences U/R 46A of IT Rules 1962 should not be admitted as none of the conditions given in the rules are fulfilled by the appellant. It is worth to mention here that the comments of the Ld.AO were called u/s 250(4) of the Act and not U/R 46A of IT Rules 1962 as the copy of valuation report from the registered valuer and the letters written to the Chief Minister, Delhi were also filed by the Ld. AR of the assessee during the course of assessment proceedings, but the Ld. AO had not considered the same. The AO in his remand report had admitted that a Valuation report of the property under question from a registered Valuer was furnished on behalf of the assessee during the course of assessment proceedings and thus, it is clear that the Circle Rate Valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sand rupees, the stamp duty value of such property; ( ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property; ( c) any property, other than immovable property,- ( i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; ( ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence which would warrant the addition impugned. The appellant' case is covered by the provisions of the Proviso to section 56(2)(vii) of the Act and thus being so, the Ld. AO was mandated to make a reference to the DVO in accordance with the provision of the Act and in the manner and circumstances referred u/s 50C(2) of the Act. In view of the above discussion, provisions of the Act and respectfully following the judicial pronouncements mentioned above in my opinion the addition of ₹ 1,02,50,000/- u/s 56(2)(vii)(b) of the Act on account of difference between value of property as per stamp valuation and value as per purchase deed of the property under consideration deserves to be deleted. I order accordingly. Hence, the ground Nos. 2, 3, 4 and 6 are allowed. 10. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds :- 1. On the facts and circumstances of the case, the Ld. CIT (A) is not justified in deleting the additional of ₹ 1,07,00,000/- made by the AO on account of difference between value of property as per stamp valuation and value as per purchase deed of the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Trade Organizations before the then Chief Minister of Delhi, however, the order of the Assessing Officer is silent on this issue. She submitted that before the ld. CIT(A) the assessee filed two comparable cases in the nearby areas which were forwarded by the ld. CIT(A) to the Assessing Officer for his comments. At that time also, the Assessing Officer, instead of referring the matter to the DVO, preferred not to do so. Thus, the Assessing Officer has lost two opportunities for referring the matter to the DVO. She accordingly submitted that the Assessing Officer should not be given a third opportunity for referring the matter to the DVO. Relying on various decisions, she submitted that when the assessee submitted numerous documentary evidences to support the contention of the assessee and when the Assessing Officer never confronted the same to the assessee and did not make any further enquiry and merely on the basis of the difference between the circle rate adopted by the stamp valuation authority and the purchase price made the addition, therefore, the same cannot be sustained. 13. Referring to the decision of the Delhi Bench of the Tribunal in the case of ITO vs. Aditya N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry adoption of circle rate by the stamp valuation authority, the Assessing Officer, instead of referring the matter to the DVO proceeded to make the addition on the basis of the valuation adopted by the stamp valuation authority. Further, during the appellate proceedings, the assessee had filed sale instances of two comparable cases in the nearby area which were forwarded by the ld. CIT(A) to the Assessing Officer and the Assessing Officer at that time also did not refer the matter to the DVO. Therefore, the order of the ld. CIT(A) being in accordance with law should be upheld. 16. We find merit in the above argument of the ld. counsel for the assessee. It is an admitted fact that during the course of assessment proceedings the assessee had filed a valuation report of Captain Suresh Dutt Associates, Government of India approved and registered valuers, who valued the property at ₹ 75,40,000/- vide their report dated 07.06.2013, copy of which is placed at pages 33 to 37 of the Paper Book. It is also an admitted fact that the assessee during the course of assessment proceedings had filed the representations made by the Narela Industrial Complex Welfare Association to the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Minister of Delhi Smt. Sheila Dixit dated 09.12.2010 and to Shri Arvind Kejriwal dated 30.01.2014,1, stating that the circle rates of industrial plots in Narela Industrial area are much higher than the actual market rates and circle rates are enhanced arbitrarily without any logic were also filed. The submission of AR of assessee has been considered and documents now furnished has been examined and placed on records. The copy of valuation report and the letters written to the Chief Minister were also filed by the AR of assessee during the course of assessment proceedings, but the Assessing Officer had not considered the same. Now at the remand report stage the AR of assessee filed copies of two sale deed i.e. dated 13.07.2013 and 08.11.2015 of the same locality and area of the property. These new evidences were not produced before the AO during the assessment proceedings where the properties were sold well below the Circle Rates. The AR argued that due to slump in the property market, the properties in the Narela Industrial area are being sold well below the Circle rates. The documentary evidences now furnished by the AR of assessee is placed on records. In view of ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). 39. The further inquiry envisaged under Section 250(4) quoted above is generally by calling what is known as remand report . The purpose of this enabling clause is essentially to ensure that the matter of assessment reaches finality with all the requisite facts found. The assessment proceedings re- opened on the basis of preliminary satisfaction that some part of the income has escaped assessment, particularly when some unexplained credit entries have come to the notice (as in Section 68), cannot conclude, save and except by reaching satisfaction on the touchstone of the three tests mentioned earlier; viz. the identity of the third party making the payment, its creditworthiness and genuineness of the transaction. Whilst it is true that the assessee cannot be called upon to adduce conclusive proof on all these three questions, it is nonetheless legitimate expectation of the process that he would bring in some proof so as to discharge the initial burden placed on him. Since Section 68 itself declares that the credited s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer and instead of referring the matter to the DVO he made addition being the difference between the circle rate and actual sale consideration. When the assessee submitted various details including two sale instances below the circle rate in the same area, the ld. CIT(A) called for a remand report from the Assessing Officer and the Assessing Officer at that time also did not refer the matter to the DVO. Therefore, under these circumstances, the decision of the Hon ble Delhi High Court in the case of Jansampark Advertising and Marketing Ltd. (supra) as relied on by the Revenue in the grounds of appeal will not be applicable to the facts of the present case. 19. We find identical issue had come up before the Tribunal in the case of Aditya Narain Verma (HUF) (supra). In the said decision also, the Department had requested the Tribunal for setting aside the matter to the file of the Assessing Officer for referring the case to the valuation officer. However, the Tribunal after considering the various submissions made by the assessee rejected such request of the Revenue and upheld the order of the ld. CIT(A) by observing as under :- 4.1 On the very perusal of the provisions lai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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