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2015 (11) TMI 171 - AT - Income TaxUnexplained investment made by the assessee in construction of industrial shed - CIT(A) deleted part addition - Held that - Mere valuation report is not sufficient to conclude that the assessee has made unexplained investment. From perusal of the assessment, nowhere it reveals that inspite of search, Revenue was in a position to lay its hands on any material exhibiting the unexplained investment made by the assessee, over and above one stated in the books of accounts. The ld. First appellate Authority has not adjudicated this issue, rather, gave substantial relief on the ground that the DVO has erred in determining the fair market value of the investment. We do not find any reason to interfere in the order of the CIT(A), but we uphold his order for different reason i.e. the issue is covered in favour of the assessee by the decision of the Hon ble High Courts in CIT Vs. Sadhna Gupta 2013 (3) TMI 418 - DELHI HIGH COURT and Commissioner of Income-tax Versus Jayendra N. Shah 2014 (11) TMI 47 - GUJARAT HIGH COURT As far as CO filed by the assessee is concerned, we are of the view that sub-section 4 of section 253 authorises the respondent to file cross-objection on receipt of notice in appeal. The CO is required to be filed within 30 days of receipt of notice and it is to be verified in the manner akin to an appeal, but, the CO is to be filed against any part of the order impugned in the appeal. In the CO filed by the assessee, he has nowhere demonstrated his grievances against any part of the order of the CIT(A), as such, the CO is not maintainable in the present form.
Issues Involved:
Revenue's appeal against CIT(A)'s order restricting addition on unexplained investment in construction of industrial shed. Analysis: 1. The Revenue appealed against CIT(A)'s order limiting the addition on unexplained investment made by the assessee in constructing an industrial shed. The grievance centered around the discrepancy between the declared cost and the estimated cost of construction. 2. A search operation under section 132 of the Income Tax Act was conducted at the premises of a group, including the assessee, leading to scrutiny assessment. The Assessing Officer (AO) rejected the books' results and referred to a valuation officer, who determined the property's value. The AO made an addition based on this report. 3. CIT(A) deleted the addition, noting the discrepancies and directing the AO to verify the correct cost. The CIT(A) considered the appellant's submissions and restricted the addition to a specific amount, providing relief to the assessee. 4. The assessee's counsel cited various High Court judgments emphasizing the need for incriminating material to support additions based on valuation reports. The Revenue, represented by the DR, supported the AO's order. 5. The Tribunal reviewed the facts and referred to Delhi High Court and Gujarat High Court judgments emphasizing the necessity of evidence beyond valuation reports for additions. The Tribunal upheld CIT(A)'s decision based on the legal precedents cited. 6. The Tribunal dismissed the Revenue's appeal and the assessee's cross-objection, stating that the issue was factual and not a question of law. The cross-objection was deemed not maintainable as it did not challenge any part of CIT(A)'s order. 7. The judgment highlighted the importance of substantive evidence beyond valuation reports to justify additions on unexplained investments. Legal precedents from various High Courts were cited to support the decision, emphasizing the burden of proof on the Revenue to establish undisclosed income. 8. The Tribunal's decision was based on the lack of incriminating material post-search to support the addition, aligning with the legal principles outlined in the cited judgments. The judgment emphasized the need for concrete evidence to substantiate additions in such cases.
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