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TMI Blog2014 (2) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... e - Held that:- There is no basis to assume receipt of royalty income, more so, in assessment year 2003-04, in the case of Relax Pharmaceutical Pvt. Ltd.,a related concern, Learned CIT(Appeals) has deleted the exclusion of 1% of the net profit on account of alleged royalty payment. In the case of assessee, there is no such evidence on the record, therefore, this addition is not sustainable. Learned CIT(Appeals) has rightly deleted the addition in both the years. - Decided in favour of assessee. - ITA Nos. 2139 & 2140/Del/2013 - - - Dated:- 14-2-2014 - SHRI G.D. AGRAWAL AND SHRI RAJPAL YADAV, JJ. For The Appellant : S/Shri Raj Kumar Gupta Sumit Goel, CAs For The Respondent : Shri Gunjon Parshad, CIT(DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER The present two appeals are directed at the instance of the revenue against separate orders of even date i.e. 07.01.2013 passed by the Learned CIT(Appeals) in assessment years 2004-05 and 2007-08. The issues involved in both the appeals are common, therefore, we heard them together and deem it appropriate to dispose of them by this common order. The grounds of appeal taken by the revenue in both the assessment years a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r u/s. 142A for estimating the value of investment on purchase of property at E-32, Okhla, Industrial Area, Phase-II, New Delhi vide this office letter F.No.ACIT/CC-142A/GZB/2011-12/ dated 03.11.2011. The DVO has sent his valuation report vide letter DVO/ND/I.T10/142A/2011- 12/131 dated 21.12.2011. In this report, the DVO has valued the above property at ₹ 14,24,66,112 as against ₹ 2,50,00,000 shown by the assessee. The assessee was requested to give its comments on the valuation who vide letter dated has submitted as under: x x x x x 6. The above contention of the assessee is not accepted because vide letter dated 27.04.2011 the assessee was specifically asked explain the investment made in the properties. However, till the reference to the DVO on 03.11.2011 the assessee did not produce any details of investment even after lapse of considerable time. Therefore, it was due to the non-compliance of the assessee which on those full details of investment was not available along with books of account and the time for referring and getting report was running out as the matter was going to be barred by limitation on 31.12.2011. Therefore, non-furnishing of information t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of possession of material/evidence and rejection of books of account. The assessee has relied on the value accepted by the registrar for stamp duty purposes and sec. 50C which is not appropriate because it is for the purposes of cal calculating Capital Gains in the hands of seller and not in the case of the purchaser i.e. the assessee. The assessee has stated that the property located at Kalkaji cannot be compared with the property located in Gr. Kailash and East of Kailash as the rates are different. However, the assessee has not substantiated as to how the rates are significantly different. 7. Keeping in view of the above the contention of the assessee is rejected and the difference between the value estimated by the DVO and that shown by the assessee i.e. ₹ 5,90,34,000, ₹ 3,50,00,000 = ₹ 2,40,34,000 is added to the income of the assessee as unexplained investment u/s. 69B of the Income-tax Act, 1961. Addition ₹ 2,40,34,000 4. On appeal, Learned CIT(Appeals) has deleted the addition. 5. The learned counsel for the assessee at the very outset submitted that the issue in dispute is squarely covered in favour of the assessee by the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. In the present case, a categorical finding is recorded by the Tribunal that the books were never rejected. This aspect has not been considered by the High Court. In the circumstances, reliance placed on the report of the DVO was misconceived. 5. For the above reasons, the impugned judgment of the High Court is set aside and the order passed by the Tribunal stands restored to the file. Accordingly, the assessee succeeds. 6. Civil appeal is allowed. No order as to costs. 7. The facts in assessment year 2007-08 are also similar. In this year, assessee has not sold the property but made further investment of ₹ 1.46 crores on renovation and leased out the property. The Assessing Officer did not reject the books by specifically pointing out the defects. Therefore, respectfully following the order of the Hon'ble Supreme Court, we are of the view that Learned CIT(Appeals) has appreciated the facts and circumstances in right perspective and no i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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