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TMI Blog2024 (9) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... als. 3. We have considered the reasoning for the delayed filing of the appeals before the Chandigarh Bench of the Tribunal and we find that the Assessees were prevented by genuine reasons for delayed filing of the appeals. The ld. DR did not object to this condonation of delay. Accordingly, the delay is condoned and we proceed to hear the appeals on merits. 4. Since the facts and issue involved in the captioned appeals are identical and are relating to same search action, therefore, these captioned appeals were heard together and are disposed of with this common order. First, we take up the Assessee Shri Shamsher Singh appeal, ITA Nos. 382/Chd/2022. 5. ITA Nos. 381 & 382/Chd/2022 for AYs 2009-10 & 2011-12 : The brief facts of the case, as extracted from the assessment order for A.Y 2009-10, are that a search & seizure operation u/s 132 of the Income Tax Act (hereinafter referred to as "the Act") was carried out on 25.10.2017 at the properties, business & residential premises of the assessee. During the course of search and seizure operation, several incriminating documents were found and seized from the premises of the assessee, which showed that the assessee had made substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith in six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years: ............................................... Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; b) the income referred to in clause (a) or pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation of shop at Gopal Leela Bhawan Chowk, Patiala. (on the basis of valuation report of DVO) 10,73,229 Unexplained investment in purchase of house property 762, Sector 8B, Chandigarh. (on the basis of loose sheet) 45,00,000 Total 82,98,356 6.2 The Ld. Assessing Officer, therefore, arrived at the satisfaction that the aggregate of income of the assessee which has escaped for the relevant assessment years was more than 50 Lakhs (Rs. 8298356/-), hence he reassessed the income of the assessee u/s 153A for the relevant assessment years as under: a) Addition of Rs. 15,44,838/- for AY 2009-10 in respect of difference in valuation of SCO 118 Urban Estate Patiala and joint shop at Gopal Leela Bhawan Chowk Patiala. b) Addition to the tune of Rs.18,39,475/-for A.Y.2010-11 in respect of difference in valuation of SCO 118 Urban Estate Patiala. c) Addition of Rs. 51,27, 402/- (Rs. 627402/- and Rs. 4500000/-) for AY 2011-12in respect of valuation difference of SCO 118 Phase 2 and amount paid for purchase of joint house no 762 Sector 8B, Chandigarh. 7. That against the said assessment orders of the Ld. AO, the assessee filed appeals with the CIT(A) for relevant assessment years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found, which amount was less than the prescribed limit of Rs.50,00,000/- as provided under 4th Proviso to section 153A(1) of the Act. He has contended that no other incriminating document or evidence was available to the A.O showing the escapement of income for the 'relevant assessment years' as defined in Explanation 1 to 4th Proviso to section 153A(1) of the Act. He has contended that the evidence referred to in the Explanation 1 should be tangible evidence and the report obtained of the DVO after the search action, would not fall in the definition of evidence under 4th Proviso to section 153A(1). He has further relied upon various case laws to stress the point that even in the absence of any corroborating evidence, the addition solely on the basis of the report of the DVO cannot be made even in the normal course or even in case of abated assessment years on the date of search. He has further submitted that the report of the DVO was a mere estimation of investment and would not constitute as conclusive evidence of investment. That even the value of investment estimated by the DVO was highly disputed and cannot be formed basis for reopening of the assessment beyond six years fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DVO's report that even out of the additional items Rs.250000/- have been added on account of unforeseen items/work. The ld. Counsel has submitted that the A.O in calculating the difference on valuation has taken the entire figure of Rs.16843900/-, where as, as noted above the DVO had covered only Rs.7453755/- for the financial year 2008-09 and that the amount of investment of the earlier years cannot be taken for calculating the difference. The ld. Counsel, therefore, has submitted that if the amount taken by the DVO of Rs.7453755/- for F.Y 2008-09 is taken then the difference will be of Rs.40150/- only. The ld. AR in this respect has furnished the following chart of calculation of difference: Calculation as per AO Total valuation Amount as per books of accounts for FY 2008-09 in books of Gopal Sweets Pvt. Ltd. Difference Appellant Share 1,68,43,900/- 71,84,834/- 96,59,066/- 13.32% 12,86,588/- Correct Calculation Valuation pertaining to F.Y. 2008-09 Amount as per books of accounts for FY 2008-09 in books of Gopal Sweets Pvt. Ltd. Difference Appellant Share 74,53,755/- 71,84,834/- 2,68,921/- 13.32% 35,820/- 11. The ld. Counsel has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material)- Assessment year 2008-09 - A search and seizure operation under section 132 was conducted at office/residence of assessee - Pursuant to search, DDIT (Investigation) made a reference to DVO in respect of valuation of immovable properties held by assessee - DVO furnished valuation report showing value of properties at higher amount than what was shown by assessee - Thus, Assessing Officer invoked assessment for six assessment years 2008-09 to 2012-13 under section 153A and, further, passed an assessment order making addition on account of difference in valuation of properties as submitted by DVO Assessee contended that in absence of any incriminating material found in course of search at premises of assessee, invocation of assessments of assessee under section 153A which were unabated on date of search was unjustified It was noted that on date of search admittedly assessments for said six assessment years 2008-09 to 2012-13 of assessee were not pending before Assessing Officer - Further, there was no whisper/mention of any incriminating material seized during search to justify addition in these unabated assessments valuation report of DVO could not be held to be incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was found during the course of search which could indicate that the assessee had made investment towards cost of construction outside the regular books of account. We also note that the Ld. CIT(A) had deleted the addition in this year by following the order of the Ld. CIT(A) for the immediately preceding assessment year. Since no material was found in the search and seizure operations which could justify the Assessing Officer's action in referring the matter to the DVO for his opinion on valuation of the said properties, then the valuation arrived at by the DVO would be of no consequence. Accordingly, in view of the above cited judicial precedents as well as the factual finding recorded by the Ld. CIT(A) in assessment year 2016-17, which, in our opinion, is both sound as well as logical, we have no hesitation in upholding the same. Accordingly, the ground raised by the Department on this issue also stands dismissed.[Para 8.3] (v) 2013 (1) TMI 629 - DELHI HIGH COURT Other Citation: (2013] 351 ITR 20 COMMISSIONER OF INCOME TAX VERSUS ABHINAV KUMAR MITTAL Additions u/s 69 - search conducted u/s 132 - notice u/s 153C - valuation of properties referred to District Valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch [oral or documentary which could have suggested that the assessee has shown less investment in its books for building construction] Therefore, no addition was permissible in the assessment order u/s 153A of the Act in the case of un-abated assessments unless it is based on relevant incriminating material found during the course of search qua the assessee and qua the AY. - Decided in favour of assessee. [Para 15] (viii) 2013 (5) TMI 637 - ITAT DELHI ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-11, NEVW DELHI VERSUS MS. ASHA KATARIA Addition made upon the valuation done by the DVO - value of the property in this case as reflected in the registered sale deed was Rs. 33,00,000/-. Reference u/s. 142A was made to the DVO who determined the value of the property at Rs.63,74,700/- as against Rs. 33,00,000/- shown by the assessee. Hence, there was difference of Rs. 30,74,700/-. This was added to the income of the assessee. CIT(A) deleted the addition as there was no evidence of adverse material regarding payment of under hand consideration - Held that:- As no other incriminating material was found during the course of search CIT(A) is correct in this regard. Addition in this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted them. Wealth Tax authorities too had accepted the valuation. - Decided in favour of assessee. (x) (2008] 166 Taxman 75 (Delhi) HIGH COURT OF DELHI Commissioner of Income-tax, Delhi-VII, New Delhi v. Ashok Khetrapal* Section 158B of the Income-tax Act, 1961 - Block assessment in search cases Undisclosed income - Assessment year 1999-2000- Whether where no incriminating material whatsoever was found during search that might show that assessee had made more investment in properties than their declared value, addition could not be made by treating investment as undisclosed on basis of any DVO's report - Held, yes (xi) (2014] 44 taxmann.com 30 (Karnataka) HIGH COURT OF KARNATAKA Commissioner of Income-tax, Central Circle v. Vasudev Construction* Section 158BB of the income-tax Act, 1961 - Block assessment in search cases - Undisclosed income, computation of (DVO report) - Block period 1- 4-1989 to 28-1-2000 - Assessee-firm was engaged in business of construction of building and development of properties - During search, certain documents like bills of materials purchased, labour charges paid, cheques relating to assessee-firm were found and seized - Notice was issued u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HIGH COURT OF DELHI Commissioner of Income-tax - VIII v. National Co-operative Consumers Federation of India Ltd.* Section 48 of the Income-tax Act, 1961 - Capital gain - Computation of [Full value of consideration] - Assessment year 2002-03 - Assessee was owner of lease hold land allotted by Delhi Development authority - Assessee entered into an agreement with builder for construction of a building and it was decided that on completion 50 per cent of building was to be handed over to assessee - In addition, builder paid Rs. 30 lakhs to assessee - Assessee submitted valuation report showing cost of its 50 per cent share as Rs. 1.14 crore - While value determined by DVO was Rs.2.13 crore - In builder's books of account, it was Rs. 1.39 crore - Tribunal had accepted figure given in books of account of builder as most authentic figure as that was actual amount which was spent on construction - No discrepancies were found in books of account of builder - Whether DVO's Valuation report per se have an element of discretion and are a matter of opinion and sale consideration received on transfer could be computed at figure shown in books of account of builder - Held, yes (Para 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than ten years can be reopened u/s 153A of the Act only if the AO is in possession of evidence depicting the escapement of income of aggregating Rs.50,00,000/- or more in such relevant assessment years beyond six years from the date of search. These provisions extending the assessment beyond six years and upto ten years put a stringent condition of possession of evidence with the AO of escapement of income of Rs.50,00,000/- or more. Such provisions extending the scope of assessment beyond six years from the date of search has to be construed strictly and the evidence relied upon by the AO in such assessments of extended period must be a tangible evidence. As noted above, it has been held time and again by various courts of law that the DVO's report on standalone basis without any corroborating material cannot be construed as incriminating material and hence the additions solely on the basis of the DVO's report are not sustainable. In the case of the assessee, even there is no difference found out between the investment disclosed by the assessee in the books of account as compared to the DVO's report in respect of property at Leela Bhawan Chowk, Patiala. Under the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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