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TMI Blog2014 (11) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 142A of the I.T. Act, 1961. 2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer restored. 3. The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary". 2. In addition to the above ground raised by the department, the assessee has moved an additional ground under Rule 27 of the ITAT Rules, which reads as under: "1. On the facts and circumstances of the case, the notice u/s 148 r.w.s. 147 is void, illegal and without jurisdiction a it is based upon reason to suspect/making fishing inquires". 3. The assessee's case was processed u/s 143(1) of the Income Tax Act. Subsequently, the AO issued a notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,164/- and the entire LTCG has been claimed exempt u/s 54 F being invested in residential flat. The valuation of gold purchase and sale price for claiming LTCG has to be verified". 4. The facts in brief are that the assessee purchased a property for Rs. 99,00,000/- on 14.02.2005, whose stamp duty valuation was reported at Rs. 1,65,90,000/-. The AO called for an explanation as to why an addition under section 69B should not be made. The assessee objected to the valuation of the property, based on stamp duty, he, therefore, referred the issue to DVO, who made the valuation at Rs. 1,29,10,999/-. The AO, adopting the valuation done by the DVO, made an addition of Rs. 30,10,999/- (1,29,10,999 - 99,00,000). 5. On this addition on merits as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions Sec. 50C are deeming provisions and hence these provisions cannot be imported for any other purposes for computation of income under any other section such as 69B. The provisions of Section 50C cannot be extended to the case of purchaser unless the fact of understatement is established by the AO as held in Sangam Towers 31 DTR (JP) Tribunal 172. The stamp duty rates are the ready reckoner rates applicable to particular area whereas the actual consideration may be more or less than the stamp valuation rates. The mere fact that the purchase consideration is less than the stamp valuation rates does not by itself leads to a conclusion that the assessee had paid the difference over and above. In case of Sanjay Cháwla 89 ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was understatement of investment, addition solely on basis of report of Valuation Officer cannot be upheld. Even otherwise there is huge difference between stamp valuation and the DVO's valuation, which itself suggest that the DVO's report is also an estimate which cannot be taken as gospel truth and straightaway be considered to substitute the actual cost unless there is some evidence to suggest that the assessee was indulging in making payments over and above recorded in the books of accounts. In fact if the stamp duty paid by the assessee is included in the agreement value then the cost recorded by the assessee would be 1,07,44,080/- which is much higher than the value of the property valued by the Registered valuer at Rs. 1,03,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the orders of the revenue authorities, we have find that the material available with the AO was report of the DVO, and the report of the registered valuer. As seen from the impugned order, the remand report does not talk about any thing factual but it only says that since the DVO valuation is closer to stamp duty valuation, hence DVO's report is being adopted. As such there is nothing in the report of the DVO. The only acceptable document is the report of the registered valuer, which has same basis. 13. We find that the observation of the CIT(A) that the AO must have some reasonable material to put the leash on the assessee. But the only material available with the AO was the DVO's estimated report, which is based entirely on comparat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent. In either cases, the notice is barred, because as per the proviso the notice should have been issued within the period of expiry of twelve months from the date of filing of the return.
17. In such a circumstance, the issue of notice u/s 143(2) beyond the period of 1 year is barred by limitation, which makes the entire proceedings vitiated.
18. We, therefore, hold that the reassessment proceedings and assessment order passed u/s 143(3) read with section 148 is bad in law, which we quash.
19. We, therefore, allow the ground raised by the assessee under Rule 27 of the Income Tax Rules.
20. In the result, the appeal by the department is dismissed.
Order pronounced in the open Court on 8th October, 2014. X X X X Extracts X X X X X X X X Extracts X X X X
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