TMI Blog2016 (9) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... on the material found in the search. In case, no material found, the block assessment itself bad in law. No doubt, AO can refer to the DVO to complete the pending assessment. But in the given case, there is no adverse material to substantiate the assessment, therefore, there is no room for the AO to refer something which is not found during the search. Hence, in our view, the addition made was not proper and needs to be annulled. Accordingly, findings of the CIT(A) is upheld and ground raised by the revenue is rejected. - ITA Nos. 1112/Hyd/2015 - - - Dated:- 21-9-2016 - SMT P. MADHAVI DEVI AND SHRI S. RIFAUR RAHMAN, JJ. Appellant by : Shri A. Sitarama Rao Respondent by : Shri C.P. Rama Swamy ORDER S. RIFAUR RAHMAN, J. This appeal filed by the revenue is directed against the order of CIT(A)-XI, Hyderabad for AY 2008-09. 2. The brief facts of the case are that the assessee had jointly with Sri P. Shyam Sunder and his brother had constructed a building at Plot No. 62, 8-2293/82/A, Road No.5 1, Jubilee Hills, Hyderabad during the FYs 2005-06 to 2007-08, relevant to the AYs 2006-07 to 2008-09. The assessee's share in the building was 2/3rd, while S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for construction and if required, the builder's books should have been subjected to scrutiny. 2.1 The assessee also alleged defects in the District Valuation Officer's report because while he ignored the agreement, he did not allow the rebate for self-supervision. The cost of lift constructed by Sri P. Shyam Sunder was paid directly to the lift supplier was not included as a part of the cost but was added separately. The assessee also questioned the applicability of section 153A as no incriminating material was found and the assessment for the concerned year had also attained finality. Hence, according to him there was no question of abatement of any of his assessments. In support of his claim, he placed reliance on various ITAT judgments. 2.2 It was further stated that the transactions with the contractor was equivalent to one of purchaser by him and such practice could not be questioned unless there was some evidence that there was some suppression or concealment. For this, he placed reliance on decision of the Supreme Court in K.P.Varghese Vs. ITO (1981) 131 ITR 597 wherein it was held that the burden to prove understatement was on the revenue. He also stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the AY 2008-09 and added to the returned income. 4. During the course of appellate proceedings, the assessee reiterated the submissions made before the Assessing Officer and pointed out that the Assessing Officer had ignored the settled law in search cases that unless an incriminating material in form of additional income/investment was found during the search, the concluded assessments could not be re-opened. 5. After considering the submissions of the assessee, the CIT(A) observed that the basic premise for making the addition of ₹ 75,64,363/- as undisclosed investment by the Assessing Officer was that there was a difference in the cost of construction disclosed by the assessee and estimated by the Valuation Officer. He further observed that before going to the merits of the addition, it is necessary to examine as to what occasioned such reference to be made to the Valuation Officer. A search was conducted in the business and residential premises of the assessee and the Assessing Officer has brought nothing on record to show that any incriminating material was found during the search. The assessee in response to notice u/s 153A of the IT Act filed a let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make reference to a valuation officer to get correct value of any asset or property. 3) The Learned CIT(A) erred in deleting the addition made of ₹ 75,64,363/-. 6.1 The revenue has also raised an additional ground, which is as under: The Id. CIT(A) has also erred while pointing out that since no incriminating material was found, the assessment proceedings initiated u/s. 153A is itself liable to be quashed, without appreciating the fact that AO can assess the total income afresh, even in the absence of any seized material u/s. 153A, as held by (1) the Hon'ble jurisdictional A.P. High Court in the case of Mr. Gopal Lal Badruka vs. DCIT (2012) 27 taxmann.com 167 (AP) 346 ITR 106 and (2) Hon'ble Karnataka High Court in the case of Mis. Canara Housing Development Company and DCIT (2014) 49 taxmann.com 98 (Karnataka). 7. The ld. DR submitted that the AO had referred the valuation of the building to the Valuation Officer u/s 142A, are proper and AO has discretionary power to refer to the Valuation Officer to complete the assessment. He submitted that CIT(A) was wrong in quashing the assessment u/s 143(3) r.w.s. 153A. However, he relied on the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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