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2021 (10) TMI 1150 - AT - Income TaxAssessment u/s 153A - Undisclosed investment in the residential buildup house - difference in values as declared by the assessee and as opined by the DVO, - Whether no incriminating evidence was found during the course of search relating to the part additions as confirmed by the Worthy CIT(A)? - Tribunal in the second appeal reversed the findings of the Ld. CIT(A) and deleted the addition holding that since no material was found during the search to justify the reference to the DVO, the action was not in accordance with law - HELD THAT - As in the present case, the authorities below have not pointed out any corroborative evidence to show that the assessee had made investment in question more than the amount declared by the her during assessment proceedings. Hence respectfully following the judgment of Abhinav Kumar Mittal 2013 (1) TMI 629 - DELHI HIGH COURT we allow the appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Undisclosed capital gain - Addition merely on the basis of the statement of Shri S.S. Bindra, one of the co-owners of the house in question - HELD THAT - AO has even not examined Shri Iqbaljit Singh to ascertain the actual sale consideration of the said house. As pointed out by the Ld. counsel even the other co-owners were not examined. As per the law laid down in the case of Daulat Ram Rawat Mal 1972 (9) TMI 9 - SUPREME COURT in the present case the documentary evidence would prevail over the oral statement relied upon by the AO. Hence, we find merit in the contention of the Ld. counsel for the assessee that the Ld. CIT(A) has wrongly upheld the addition made by the AO. Accordingly, we allow this ground of the appeal of the assessee and set aside the findings of the Ld. CIT(A). Addition of low household expenses - HELD THAT - As no incriminating material was recovered during the course of search and seizure action, the Ld. CIT(A) has wrongly sustained the addition made by the AO on account of house hold expenses.CIT(A) has not given any cogent and convincing reason for sustaining the addition on account of the household expenses. In our considered view the addition sustained by the Ld. CIT(A) is not based on any evidence on record. - Decided in favour of assessee.
Issues Involved:
1. Legality of the addition made on the basis of a valuation report in the absence of incriminating evidence. 2. Confirmation of additions on account of undisclosed investments in residential property. 3. Confirmation of additions on account of undisclosed capital gains. 4. Confirmation of additions on account of low household expenses. Detailed Analysis: 1. Legality of the Addition Made on the Basis of a Valuation Report in the Absence of Incriminating Evidence: The core issue was whether the addition made by the Assessing Officer (AO) based on a valuation report, without any incriminating evidence found during the search, was sustainable. The Tribunal referred to the precedent set by the Hon'ble Delhi High Court in CIT vs. Abhinav Mittal (351 ITR 0020) and CIT vs. Kabul Chawala (380 ITR 573), which held that in the absence of incriminating material, the action of referring the matter to the Valuation Officer (DVO) was not justified. The Tribunal concluded that since no corroborative evidence was found during the search, the addition based on the valuation report was not sustainable. The Tribunal allowed the appeal and set aside the impugned order passed by the Ld. CIT(A). 2. Confirmation of Additions on Account of Undisclosed Investments in Residential Property: The AO had made additions for unexplained investments in the renovation of a jointly owned house by the assessee and her mother-in-law. The Tribunal noted that no incriminating evidence was found during the search to justify these additions. The Tribunal relied on the Delhi High Court's judgment in CIT vs. Abhinav Kumar Mittal, which emphasized that valuation reports without supporting evidence are inconsequential. Consequently, the Tribunal allowed the appeals for both assessment years 2014-15 and 2015-16, setting aside the additions confirmed by the CIT(A). 3. Confirmation of Additions on Account of Undisclosed Capital Gains: The AO had made additions based on the statement of a co-owner, claiming a cash receipt from the sale of a property. The Tribunal observed that the AO did not corroborate this statement with any documentary evidence or examine other co-owners and the purchaser. The Tribunal cited the Supreme Court's judgment in Daulat Ram Rawat Mal vs. CIT (87 ITR 349), which held that documentary evidence prevails over oral statements. The Tribunal found that the addition of ?3,75,000/- as undisclosed capital gain was based on surmises and conjectures, and thus, it set aside the findings of the CIT(A). 4. Confirmation of Additions on Account of Low Household Expenses: The AO had made additions on the grounds of low household expenses without any incriminating evidence. The Tribunal noted that the CIT(A) had sustained these additions without providing any cogent reasons. The Tribunal referred to the Delhi High Court's judgment in CIT vs. Kabul Chawala, which held that additions without incriminating evidence found during the search are not justified. The Tribunal found the addition of ?1,50,000/- on account of household expenses to be baseless and set aside the CIT(A)'s findings. Conclusion: The Tribunal allowed all four appeals filed by the assessee for the assessment years 2014-15 and 2015-16, setting aside the orders of the CIT(A) and holding that the additions made by the AO were not sustainable in the absence of incriminating evidence. The Tribunal emphasized the importance of corroborative evidence and adherence to legal precedents in making additions during assessment proceedings.
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