TMI Blog2020 (2) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... as estimated by the DVO by replacing the value shown in the purchase deed. assessing officer has not given sufficient opportunity of being heard to the assessee. It cannot be said that by giving opportunity of being heard for hearing immediately one day assessing officer has discharged his obligation of giving opportunity of being heard. Thus Ld. CIT(A) was right in observing that the AO has erred in making the addition on account of unexplained income of the assessee and accordingly rightly directed the AO to delete the addition in dispute - Decided against revenue - I.T.A. No. 3823/Del/2014 And I.T.A. No. 3820/Del/2014 - - - Dated:- 24-2-2020 - Shri H.S. Sidhu, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Sh. Nagesh Bahel, Advocate For the Department : Sh. R.K. Gupta, Addl. CIT(DR) ORDER PER H.S. SIDHU : JM These are the separate appeals filed by the Revenue emanate out of the respective Orders passed by the Ld. CIT(A)-XXIV, New Delhi pertaining to assessment years 2005-06 2009-10. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the sake of convenience, the relevant portion of the same is reproduced as under:- 9. We have heard both the parties and perused the records, especially the orders of the revenue authorities and the submissions and precedents submitted by both the parties. We find considerable cogency in the submissions of the Ld. Counsel of the assessee and the judgment rendered by Hon ble Delhi High Court by which issue involved in ground no. 1 in the Revenue s appeal is squarely covered in favor of the Assessee and against the Revenue. 10. We find that in the case CIT vs. Smt. Nilofer I. Singh [2009] 176 TAXMANN 252 (Delhi), the Hon ble High Court has held expression full value of consideration used in section 48 does not have any reference to market value but only to consideration referred to in sale deeds as sale price of assets which have been transferred. 10.1 We further find that in the case of - CIT vs. Aerens Inrastructure Technology Ltd. vs. DCIT [2011] 16 taxmann.com 400 (Delhi), the Hon ble High Court has confirmed the order of the ITAT wherein the Tribunal deleted the addition of ₹ 48,68,774/- made by the AO on account of difference between the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of assessment proceedings vide her submission dated 22.11.2012, and on being asked to explain further source of deposits in the bank account, the assessee explained the source of investment in the aforesaid property as follows:- S.No. Date Ch. No. Amount Name of the party Particulars Bank 1 5.5.2008 017903 44,30,000 Gagan Preet Singh J-1/161 Rajouri Garden New Delhi Axis Bank Ltd. West Punjabi Bagh. 2 5.5.2008 017904 44,30,000 Rishi Preet Singh J-1/161 Rajouri Garden New Delhi Axis Bank Ltd. West Punjabi Bagh. 3 19.5.2008 Paid by cash ₹ 3,54,400 Stamp duty paid J-1/161 Rajouri Garden New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank accounts at Axis Bank, West Kirti Nagar Branch, Delhi Bank of India, Kirti Nagar Branch, Delhi. It was explained that during the relevant assessment year, the assessee sold a property at 20C/72, West Punjabi Baqh, New Delhi and utilized the sale proceeds for the purchase of property at J-1/161, Rajouri Garden, New Delhi. However, it seems that the Assessing Officer has ignored all the explanations given by the assessee during the course of assessment. From the assessment order, it is also evident that the Assessing Officer has not controverted the explanation given by the assessee regarding the investments made in the aforementioned property. Further, no material has been brought on record by the Assessing Officer to show that the assessee has made any excess investments in the aforesaid property over and above the value recorded in the sale deed. Therefore, we are of the view that the Assessing Officer has grossly erred in making addition of ₹ 3,53,30,OOO/- on account of investment in the properties at J-1/161, Rajouri Garden, New Delhi and Ld. CIT(A) has rightly appreciated all the evidences filed by the Assessee before AO. The AO without bringing any ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminary formation of mind by the AO is necessary which requires him to make a reference to DVO uls 142A. In other words, it is only during the course of pendency of the assessment that the AO can frame his mind to refer the property to DVO. Such mind can be framed if there is a basis to think that the assessee may have understated the cost of construction or whatever is declared by him in this regard is not believable. Ld. CIT(A) has rightly appreciated the all evidences as well as provisions of law and decided the issue in favor of the assessee. 10.7 On perusal of the assessment order, we find that there was no reference whatsoever made by the AO to any material/evidence/information on the basis of which it could be said that the said that the investment shown by the appellant was understated and that anything above what was disclosed by the appellant. Thus, the condition precedent for making reference to the DVO by invoking the provisions of Sec. 142A was not satisfied in the present case. Moreover, on perusal of the assessment order, it is noted that nowhere the AO has mentioned that what are the mistakes and unreliability has been found out by the AO in the books of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 60,53,700 the Assessing Officer had treated the difference between the purchase consideration shown by the assessee and the fair market value as on the date of purchase determined by the ova as unexplained money paid by the assessee for the purchase or the property. 10.9 We further note that there was no finding by the Assessing Officer that the assessee had incurred any expenditure in excess of what had been declared but he had referred the issue of valuation to the ova only on the basis of speculation alleging information in the form of newspaper report about enhanced property prices in the area. In these circumstances, the reference made by the Assessing Officer by invoking the provisions of section 142A was without justification and, consequently, no addition could be made on the basis of valuation made by the DVO. 10.10To support our finding, we place reliance on the decision of the Hon ble Supreme Court of India in the case of Sargam Cinema vs. CIT [2011] 197 Taxman 203 (SC) wherein it was held as under:- 4. In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt obtained from the DVO in response to the said reference, in our opinion, was sustainable in Jaw as rightly held by the learned Commissioner of Income-tax tax (Appeals). 10.12 We further find that similar views were taken in the cases of Commissioner of Income-tax v. Ambience Developers and Infrastructure(P.) Ltd, [2012] 25 taxmann.com 210 (Delhi), CIT vs Gulshan Kumar [2002] 257 ITR 703 (Delhi), CIT v. P .V. Kalyanasundaram [2007] 294 ITR 49 (SC) Subhash Chand Chopra v. Asst. CIT [2005] 92 TTJ (Delhi) 1087) and K.P Varghese. v. ITO [1981] 131 ITR 597 (SC). 10.13 Under these circumstances, We are of the opinion that the Assessing Officer has erred in referring the matter to the DVO and consequently the DVO's report on the value of investment in the property cannot replace the actual purchase value shown in the purchase deed of the aforesaid property at J-1/161, Rajouri Garden, New Delhi. Hence, the Assessing Officer has erred in adopting the value of the property at J-1/161, Rajouri Garden, New Delhi estimated by the DVO by replacing the value shown in the purchase deed. Ld. First Appellate Authority has rightly appreciated the all evidences as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's property as per circle rates was ₹ 2 crores as against sale consideration of ₹ 2.90 crores admitted by assessee - Further, there was nothing on record to suggest that assessee had received more than what was stated in sale deed - Whether in aforesaid circumstances, Assessing Officer had to adopt amount received by assessee as full value of sale consideration for calculating capital gain liable to tax - Held, yes - Whether even otherwise, adoption of report of ova without providing an opportunity of being heard to assessee was against principles of natural justice - Held, yes - Whether, consequently, impugned addition made by Assessing Officer was rightly deleted - Held, yes 10.15In the background of the aforesaid discussions and respectfully following the precedents as aforesaid, we are of the considered view that the Ld. CIT(A) was right in observing that the AO has erred in making the addition ₹ 3,53,30,000/- on account of unexplained income of the assessee and accordingly rightly directed the AO to delete the addition in dispute, which in our opinion, does not need any interference on our part, hence, we uphold the same. Accordingly, the Ground no. 1 ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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