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TMI Blog2015 (7) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... etical and imaginary addition has been made by the A.O.The departmental Valuation Officer has on reference made u/s 142A of the Act valued the property at ₹ 46.96 lakhs, which is marginally higher than the purchase consideration of ₹ 45 lakhs disclosed by the assessee. The difference is negligible. Taking evaluation report value, arrived at 2 years after the date of transaction and then arbitrarily modified the value and thereafter treating this amount as sale. Under the circumstances no addition can be sustained on the ground that banker’s valuer, after two years after the date of transaction, valued the property at a particular amount when no material is found in support of the AO’s conclusion that the assessee had made unaccounted investments in purchase price. The AO can not ignore the DVO’s report. The addition has been made on conjectures and surmises and without any basis. Hence the First Appellate Authority has rightly deleted the said addition.- Decided against revenue. - I.T.A.No. 505 and 506/DEL/2012 - - - Dated:- 29-6-2015 - Shri H.S. Sidhu and Shri J.Sudhakar Reddy, JJ. For the Petitioner : Sh. Salil Kapoor, Adv. For the Respondent : Sh. Sanja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal at or before the time of hearing. ITA 506/Del/12 for the AY 2005-06: 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in addition of ₹ 2,87,00,000/- made by the AO on account of unexplained investment in property. 2. The order of the Ld.CIT(A) is erroneous and is not tenable on facts and in law. 3. The appellant craves leave to add, alter, amend or vary the above grounds of appeal at or before the time of hearing. 2.3. The assessee invoked Rule 27 of ITAT Rules but during the course of hearing, he did not press the same. Thus this is dismissed as not pressed . 3. Heard Shri Salil Kapoor, the Ld.Counsel for the assessee and Shri Sanjay Prasad, Ld.CIT, D.R. on behalf of the Revenue. 4. ITA 505/Del/2012 (AY: 2004-05):- The only addition that is disputed before us for the A.Y. 2004-05, is addition made u/s 68 of the Income Tax Act, 1961 (the Act). The findings of the AO are recorded at para 19, 20 and 21 of the assessment order which is extracted for ready reference. 19. Perusal of the details furnished by the assessee company shows that the assessee has shown to have sold the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. That valuation made u/s 142A of the Act is only for the purpose of estimating the cost of investment u/s 69/69A 69B of the Act and therefore, the scope of this section cannot be extended for determining the sale consideration of an asset. In the facts of the case it is not the value of the investment which is to be estimated in this case. That during the present assessment year the property has been sold by the assessee and therefore it is capital gain or unaccounted income earned out of such sale which is to be computed. Therefore for such purpose the reference to the DVO should have been legally made u/s 55A which has been in enacted with a view to ascertaining the fair market value of a capital asset for the purposes of chapter IV of the Act Under these circumstances there has been legal infirmity in making of reference by the AO. It is further noted from the copy of sale deed dated 26.06.2003 in appellant's case that the same has been registered by registration authorities at Delhi and there is no reference in this sale deed as to higher stamp duty having been charged as compared to the stamp duty as mentioned on the declared sale consideration by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has actually received cash, over and above the amount declared by it for the sale of this property. This is not a case where Sec.50C has been invoked. It is an addition made u/s 68. It is not a case of computation of capital gains. The factual finding of the Ld.CIT(A) could not be controverted by the Revenue. Thus both legally and factually the order of the First Appellate Authority is to be upheld. 8. In view of the above discussion we uphold the findings of the First Appellate Authority and dismiss the appeal of the Revenue for the A.Y. 2004-05. 9 . ITA 506/Del/2012 (AY: 2005-06):- For the A.Y. 2005-06 an addition u/s 68 amounts to ₹ 2,87,00,000/- has been made based on property valuation done by a Bank empanelled valuer, of property which was purchased by the assessee, in Plot no.217, Block C, Rewari Line Industrial Area, Phase II, New Delhi 110 064. The sale deed of the transaction discloses that the property was purchased for ₹ 45 lakhs on 31.8.2004. The property was valued by an approved Panel Valuer of Punjab National Bank on 1.9.2006 i.e. two years after the transaction of purchase, for ₹ 4,86,00,000/- and the net realisable value was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and then arbitrarily modified the value and thereafter treating this amount as sale. Under the circumstances no addition can be sustained on the ground that banker s valuer, after two years after the date of transaction, valued the property at a particular amount when no material is found in support of the AO s conclusion that the assessee had made unaccounted investments in purchase price. The AO can not ignore the DVO s report. The addition has been made on conjectures and surmises and without any basis. Hence the First Appellate Authority has rightly deleted the said addition. In coming to this conclusion we draw strength from the following judgements of the Jurisdictional High Court. (1) CIT vs. Aerens Infrastructure Technology Ltd. (2011) reported in 16 Taxmann.com 400 (Delhi) where it is held as follows. Section 142A of the Income Tax Act, 1961 Assessment Estimate by Valuation Officer. Assessee purchased a property for certain consideration. Since valuation was found to be on lower side, A.O. made reference to DVO u/s 142A and made addition of amount of difference between valuation made by DVO and value declared by assessee. On appeal, CIT(A) gave part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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