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TMI Blog2016 (6) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for the assessment year 2006-07 declaring his total income at Rs. 18,11,187/-. The return was thereafter taken in scrutiny and Assessing Officer made an addition of Rs. 51,69,458/- under Section 69 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') as unexplained investment in a residential house at Shimoga. The addition was made with regard to purchase of residential house for a consideration of Rs. 66,56,142/- which included the stamp duty payment. The value of the property by the Assessing Officer was taken at Rs. 90,51,000/- as against actual consideration reflected in the sale deed at Rs. 60,07,377/-. It appears that after document was presented for registration, the objection was raised by the stamp department for the deficit stamp duty. As per the value fixed for the purpose of stamp duty, the assessee paid difference of the stamp duty on the basis of the valuation made for the stamp duty. The same was one of the aspects considered by the Assessing Officer and then the matter was referred to the valuer for the purpose of valuation and consequently the difference of Rs. 51,69,458/- was added by applying the provisions of Section 69 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilding after allowing depreciation. Hence, it is not guess work or estimate as relied upon by the assessee. It is based on the rate of the property sold during the relevant time in that area which was collected from the office of the Sub-registrar, Shimoga. Since the unexplained investment on the basis of value determined by the stamp duty authority is less than the value determined by the Departmental Valuation Officer, the addition under this head u/s. 69 of the Income-tax Act, 1961 is done considering the difference between the value determined by the Departmental Valuation Officer and the value shown by the assessee in the return of income filed i.e., Rs. 51,69,458/- (Rs.1,18,25,600/- - Rs. 66,56,142/-). The amount of Rs. 51,69,458/- is added to the total income of the assessee u/s. 69 of the Income-tax Act, 1961." 9. The Commissioner (Appeals) while considering the said aspect observed at para 8.2 as under:- "8.2 I have carefully considered the submissions of the appellant and judicial decisions relied upon and the material facts emanating from the order of the AO and the remand report on this issue. In this case a remand report was called for from the AO. The AO after givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and Rs. 20,26,793/- for the building. The assessees's registered valuer has valued the building at Rs. 18,53,113/- and that of the land at Rs. 51,40,964/-, total of Rs. 69,94,000/-. The valuation of the property was also considered by the District Registrar/the appellate authority. When the matter of under valuation of the property was initiated against the assessee, the District Registrar/the appellate authority has determined the value of the land at Rs. 79,61,525/- and that of the building at Rs. 21,60,000/-. 13. On going through the three sets of valuation reports available with us, we find that more effective and realistic valuation was that of the District Registrar, Shimoga. So, we direct the assessing authority to re- compute the capital gains on the basis of the valuation decided by the District Registrar, Shimoga through his proceedings dated 18.05.2006." 11. The principal contention raised by the learned counsel for the appellant-assessee was that while invoking power under Section 69 of the Income Tax Act, the initial burden would be upon the revenue to prove that unexplained investment has been made by the assessee. It is only after the initial burden is dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be added to the income for the purpose of taxation. He submitted that it cannot be said that the Tribunal has committed any error which may call for interference by this Court. 13. Before we consider further case, it would be appropriate to refer to certain case-laws having direct bearing on the invoking of the power under Section 69 of the Act. The High Court of Delhi in case of Commissioner of Income Tax vs Puneet Sabharwal reported in (2011) 338 ITR 485, had an occasion to examine the question as to whether the Appellate Tribunal was right in holding that notwithstanding the report of the District Valuation Officer, the Revenue had to prove that the assessee had in fact received extra consideration over and above the declared value of the sale in the sale deed. While answering the said question at para Nos.8 and 9, it was observed thus:- "8. As far as question No.2 is concerned, as already indicated above, the Assessing Officer solely relied upon the report of the District Valuation Officer. Apart from this, there was admittedly no evidence or material in his possession to come to the conclusion that the assessee had paid extra consideration over and above what was stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng upon the District Valuation Officer's Report under Section 142A and thereby deleting addition of the income based on the said report. The High Court of Delhi after considering the aforesaid question, observed at para Nos. 4 and 5 as under:- "4. Only point to be considered is whether the valuation rendered by the DVO is to be taken into account or not. It has been argued by the learned counsel for the revenue that the assessing officer was justified in referring the matter to the DVO for an opinion with regard to the fair market value of the property and once that opinion has been rendered, the same has to be taken into account and if that were to be so, the addition of Rs. 2,81,83,000/- would be fully justified. Consequently, it was submitted by the learned counsel for the revenue that the Tribunal had erred in deleting the addition. On the other hand the learned counsel for the respondent referred to a Division Bench decision of this Court in the case of CIT v. Shri Puneet Sabharwal: (2011) 338 ITR 485. In that decision a specific question had been raised as to whether the Income Tax Appellate Tribunal was right in holding that notwithstanding the report of the DVO the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in favour of the assessee against revenue and the appeal of the revenue was dismissed. 17. We need not burden our judgment with other case-laws, since in our view the aforesaid two decisions of the High Court of Delhi throws light on the settled legal position for the purpose invoking power under Section 69 of the Act. 18. Examining the matter further on facts, in the present case, it appears that it is not a case of the revenue that there was any independent or corroborative material for consideration paid or received in addition to than mentioned in the sale deed. The basis of the addition is only valuation report of the District Registrar under the Stamp Act and the Departmental valuer. As such, there is no independent material which had come on record for such purpose. The payment of additional stamp duty may be on the basis of the valuation of the valuer of the stamp Act authority but same ipso facto cannot be said to be a valid ground to initiate the proceedings under Section 69 of the Act or to invoke power under Section 69 of the Act on the premise that additional consideration was paid or received. Further, if such could not be the basis, subsequent valuation re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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