TMI Blog2023 (8) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... ] as referred to supra in the contentions of the ld. AR. We find that the provisions of section 142A(6) of the Act categorically state that the valuation report has to be furnished by the ld. DVO within six months from the end of the month in which reference is made by the ld. AO. Admittedly, the valuation report is dated 28.10.2016 which is beyond the prescribed time of 30.09.2016. Hence, it is clearly evident that the said valuation report of ld. DVO is barred by limitation and, hence, cannot be relied upon by any party in the eyes of law. Consequentially no addition per se can be made by the Revenue by placing reliance on an invalid valuation report.- Decided in favour of assessee. Addition u/s 68 - unsecured loan - HELD THAT:- The transactions have been routed through regular banking channels details of which were already submitted hereinabove and, hence, the genuineness of the transaction is also proved. Merely because the bank statement of the lender company (which is the personal property of the lender company) is not furnished by the assessee, that would not automatically disprove the creditworthiness of the lender. Nothing prevented the ld. AO by either issuing no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n violation of the statutory conditions and the procedure prescribed under the law and as such the same is bad and liable to be quashed. 3. On the facts and circumstances of the case, the proceedings initiated under Section 153A and assessment framed thereafter under Section 153A are bad in the eye of law in the absence of any incriminating material being found during the course of the search. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 50,00,000/- made by the AO on account of unsecured loan received during the year treating the same as unexplained under section 68 of the Income Tax Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the abovesaid addition despite the assessee bringing on record all evidences and explanation to prove the identity and creditworthiness of the lenders as well as the genuineness of the transaction. 6. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in not confirming the addition despite the fact that the addition has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1956. The assessee had filed the return of income together with computation of income, audited accounts, etc. The assessee was searched u/s 132 of the Act on 23.05.2013. The assessee owned an immovable industrial property situated at Plot No. B-6, Sector-4, Noida and had duly declared the cost of construction of building on the plot of Rs. 82,79,077/- in its books plus air-conditioning expenses in the building of Rs. 26,50,000/- totalling to Rs. 1,09,29,077/- upto 31.03.2010. During the course of search assessment proceedings, the ld. AO asked the assessee to submit purchase deed of plot and details of investments, source of investments with documentary evidence, date of investment made in the construction of the property, source of investment thereof and copy of valuation report of the approved valuer. All these documents were duly submitted by the assessee except the valuation report. Copy of details of investment along with documentary evidences comprising ledger-wise summary sheet along with bills were submitted during the course of assessment proceedings. During the course of assessment proceedings, the ld. AO referred the valuation of construction cost of building u/s 142A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee were not sought to be rejected by the ld. AO. No deficiencies were pointed out in the said books of account by the ld. AO. The valuation report of the ld. DVO suffers from multiple defects and deficiencies. The said valuation report u/s 142A of the Act was furnished by the ld. DVO on 28.10.2016 which is beyond the maximum period allowed to the ld. DVO to furnish the same to the ld. AO in terms of section 142A(6) of the Act. The assessee also pointed out that this addition is not supported by any incriminating material found during the course of search and since the assessment for AY 2008-09 is a concluded assessment, this addition could not be made in the search assessment in the absence of incriminating material. The ld. CIT(A), however, proceeded to hold that the assessee was unable to substantiate the investment made in immovable property and accordingly the books of account were rejected by him u/s 145(3) of the Act. The ld.CIT(A) in para 6.3 of his order had duly recorded the objection of the assessee that the report of the ld. DVO cannot be acted upon as it was furnished beyond the period of six months from the end of the month in which reference u/s 142A of the Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before 30.09.2016. Admittedly, the DVO s report was dated 28.10.2016 which has been relied upon by the ld. AO for framing the addition towards cost of construction in the hands of the assessee. This is in gross violation of provisions of section 142A(6) of the Act. Reliance was placed on the decision of the coordinate Bench of Hyderabad Tribunal int eh case of Shri Zulfi Revdjee vs. ACIT, ITA No. 2415/Hyd/2018 dated 05.09.2019. (d) The provisions of section 69B of the Act uses the word find. The ld. AO is bound to find something by way of some material that the assessee had made investment in cost of construction over and above the value disclosed in the books of account. The ld. AO directly cannot apply the provisions of section 69B of the Act and make an addition. The assessee is not even supposed to submit a valuation report when the audited books of account are presented before the ld. AO. In any case, the assessee had also furnished a valuation report from the registered valuer dated 08.07.2016 before the lower authority. (e) The valuation report of ld. DVO suffers from various inconsistencies and deficiencies practically numbering to 20 defects, which were pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent from the perusal of the orders of the lower authorities. The sole basis of the addition is only the valuation report furnished by the ld. DVO which has been obtained by the ld. AO during the course of search assessment proceedings. Then, the said report cannot constitute incriminating material found during the course of search. Hence, we have no hesitation to hold that no addition could be made by placing reliance on the said valuation report while framing the assessment u/s 153A of the Act in the hands of the assessee. This issue is now well settled by the recent decision of Hon ble Supreme Court referred to supra in the contentions of the ld. AR. 14. We find that the provisions of section 142A(6) of the Act categorically state that the valuation report has to be furnished by the ld. DVO within six months from the end of the month in which reference is made by the ld. AO. Admittedly, the valuation report is dated 28.10.2016 which is beyond the prescribed time of 30.09.2016. Hence, it is clearly evident that the said valuation report of ld. DVO is barred by limitation and, hence, cannot be relied upon by any party in the eyes of law. Consequentially no addition per se can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. AO, vide order sheet entry dated 22.11.2016, asked the assessee to furnish the details in respect of Creative Capital Services Pvt. Ltd., from whom loan of Rs. 78 lakhs was received during the year and Rs. 28 lakhs had been returned during the year. The ld. AO observed that the assessee, had filed the copy of ITR along with balance sheet and Profit Loss Account of the said lender, but, did not file their bank statements. Hence, the source and nature of availability of money in the creditors bank account could not be ascertained. The ld. AO further observed that the assessee company has not carried out any business activities during the year. The assessee company has not paid any interest on the loan received from Creative Capital Services Pvt. Ltd. Therefore, genuineness and credit worthiness of the transaction remains unverified. With these observations, he proceeded to treat the receipt of unsecured loan of Rs. 78 lakhs from Creative Capital Services Pvt. Ltd. as unexplained cash credit u/s 68 of the Act and added the same to the total income of the assessee for the AY 2008-09. Before the ld.CIT(A), the assessee prima facie submitted that the actual receipt of loan fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is only Rs 50 lakhs. This clearly proves the credit worthiness of the lender. The said person is duly assessed to income-tax and copy of ITRs were duly filed before the ld. AO together with the PAN. Hence, the identity is also proved. The transactions have been routed through regular banking channels details of which were already submitted hereinabove and, hence, the genuineness of the transaction is also proved. Merely because the bank statement of the lender company (which is the personal property of the lender company) is not furnished by the assessee, that would not automatically disprove the creditworthiness of the lender. Nothing prevented the ld. AO by either issuing notice u/s 133(6) of the Act to the lender company to ascertain the said details. Admittedly, no examination whatsoever was carried out by the ld. AO in the instant case after the receipt of documents from the assessee. Hence, the assessee cannot be fastened with a tax liability for non-furnishing of a particular document which is not even expected to be in possession of the assessee. When this was pointed out to the ld. DR before us, he merely relied on para 5.3 of the order of ld. CIT(A). The contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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