9911796707
TMI Blog2021 (9) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... y stated that in concluded assessment no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search. The ld CIT(A) also called for remand report where the ld AO records that no incriminating material was found during the course of search. We delete the addition made on account of purchase price of land as well as the addition on account of cost of construction for the reason that there is absence of any incriminating material found during the course of search supporting the above addition. - Decided in favour of assessee. Addition based on the DVO s report - Assessment Year 2010-11 - HELD THAT:- Reference to learned DVO was made without first verifying the cost of construction shown by the assessee and without first making a specific observation that assessing officer does not have any confidence in the cost of construction submitted by the assessee. Unless the assessee is found to have incurred some additional expenditure which are not recorded in the books of accounts or for which source of withdrawal from the bank or the cash available with the assessee is found to be not reliable, then only the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) THAT in the facts and circumstances of the case, the Learned CIT(A) erred in confirming the decision of the Learned A.O. to refer the matter to seek opinion of the Valuation Department regarding the cost of construction of residential house by the appellant 5) THAT in the facts and circumstances of the case, the Learned CIT (A) erred in confirming the decision of the Learned A.O. in not considering the cost of construction as mentioned in the Valuation Report obtained from Government Registered Valuer. 6) THAT in the facts and circumstances of the case, the Learned CIT(A) erred in confirming the decision of the Learned A.O. in not providing reasonable opportunity to the appellant. 7) THAT in the facts and circumstances of the case, the Learned CIT(A) erred in confirming the decision of the Learned A.O. in not considering the objections pointed out by the appellant. 8) THAT in the facts and circumstances of the case, Learned CIT(A) erred in confirming the decision of the Learned A.O. in not considering the details/dates of construction of the residential premise, over which construction was carried out. 9) THAT the Report pf the Valuation Officer suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch on 11.11.2010 certain book of account and cash was seized. The assessee was issued a notice u/s 153A on 08.02.2013. The assessment u/s 153A was passed wherein, there were an addition of ₹ 1,10,67,000/- on account of difference in the purchase of land during the year as well as a minor addition with respect to the construction cost of the house property.. The total income was assessed at ₹ 1,12,15,171/-. The assessee preferred an appeal before the ld CIT(A) who confirmed the addition. Therefore, the assessee filed appeal before us. 6. The brief facts of the addition was that the ld AO noted that there were substantial repair and alternation work was carrying out at the residence of the assessee C-59, Friends Colony (east), New Delhi. To ascertain the market value of the property, he referred the matter to the ld District Valuation Officer. The ld DVO noted that the land purchased by the assessee on 17.11.2005 having the transaction value at ₹ 3,10,00,000/- and its valuation as per DVO is ₹ 4,20,67,000/- and therefore, there is a difference of ₹ 1,10,67,000/-. The cost of construction of the property was also determined. 7. As per the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oborative evidence. 10. On merits, The addition based on the DVO s report cannot be sustained, and The reference to the DVO without finding an infirmity in the cost of construction and land acquisition cost disclosed by the assessee. Coming to the merits of the addition based on the report of the District valuation officer, He further pointed out several infirmities in the valuation report. Even otherwise he submitted a reconciliation of valuation shown by DVO as well as cost of construction incurred by the assessee. He submitted that for the stair case the valuer has estimated cost of ₹ 3 lakhs whereas the actual expenditure are only ₹ 1,16,000/-. Further, he submitted that there is no difference between the actual expenditure of architect of ₹ 2,23,113/- . He submitted that architect was also called by the ld CIT(A) and was examined. He further stated that sum of ₹ 5 lakhs incurred for generator expenditure which are already accounted for on the basis of bills. He referred to page No. 19 of the order of the ld CIT(A) for this. He further stated that actual self supervision reduction @10% should have been allowed to the assessee whereas the ld CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in CIT Vs. Kabul Chawla 380 ITR 573 categorically stated that in concluded assessment no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search. The ld CIT(A) also called for remand report where the ld AO records that no incriminating material was found during the course of search. In view of this, as per ratio laid down by the Hon'ble Delhi High Court, we delete the addition made by the ld AO to ₹ 1,10,67,000/- on account of purchase price of land as well as the addition of ₹ 1,04,941/- on account of cost of construction for the reason that there is absence of any incriminating material found during the course of search supporting the above addition. 14. Accordingly, ITA No. 2479/Del/2017 filed by the assessee and subsequently ground No. 1 and 2 of the assessee are allowed. 15. As we have held that there is no incriminating material found during the course of search the addition made by the ld AO is deleted hence other grounds does not deserve to be adjudicated. 16. Accordingly, appeal of the assessee for Assessment Year 2006-07 is allowed. Assessment Year 2007-08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the above CBDT circular it should be treated as final in respect of which no scrutiny are to be started. 19. Thus it is apparent that on the date of search i.e. 10/11/2010, no notice u/s 143 (2) of the act was issued to the assessee before the expiry of the time available for issue of such notice, therefore, the assessment for assessment year 2007 08 was a concluded assessment and could have been disturbed only on the basis of the incriminating material found during the course of search. 20. The ld CIT(A) confirmed the above addition as per order dated 28.02.2018. 21. As the argument of all these were same, the assessment for assessment year 2007 08 is a concluded assessment on the date of search, we hold that on the date of search and therefore, the additions could not have been made in the hands of the assessee in absence of incriminating material. Accordingly, appeal of the assessee for Assessment Year 2007-08 is allowed. Assessment Year 2008-09 22. ITA No. 2480/Del/2017 is filed by the assessee against the order of the ld CIT(A)-35, New Delhi dated 23.02.2017. The original return was filed by the assessee on 20.07.2008 declared income of ₹ 3,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which could have been disturbed by the ld AO only on account of any incriminating material found during the course of search. Admittedly, the addition has been made by the ld AO merely on the basis of the valuation report of DVO therefore, in this assessment year the addition has been made by the ld AO and confirmed by the ld CIT(A) deserves to be deleted. Accordingly, appeal of the assessee for Assessment Year 2009-10 for the reason given by us for Assessment Year 2006-07 and 2008-09 the appeal of the assessee is allowed. Assessment Year 2010-11 31. ITA 3157/Del/2018 is filed by the assessee for ay 2010-11 raising the following grounds of appeal:- 1. THAT in the facts and circumstances of the case, the Learned CIT(A) erred in confirming the decision of the Learned A.O. in initiating proceedings u/s 153C. 2. THAT in the facts and circumstances of the case, the Learned CIT(A) erred in confirming the decision of the Learned A.O. in initiating proceedings u/s 153 A. 3. THAT in the facts and circumstances of the case, the Learned CIT (A) erred in confirming the reference made by Learned A.O. and seeking opinion of Valuation Department u/s 142(2A) of cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of arbitrary rates for purchase of marble, other items. 17. THAT the CIT(A) erred in confirming the action of the DVO/A.O/ in not considering the amount of expenditure on the acquisition of Generator by company in which assessee s spouse is director. 18. THAT in the facts and circumstances of the case, the Learned CIT (A) erred in confirming the decision of the Learned A.O. in not considering the factum of money for acquisition/construction of residential house has been made through receipts from the appellant s spouse, Shri Madan Kukreja. 19. THAT in the facts and circumstances of the case, the Learned CIT (A) erred in confirming the decision of the Learned A.O. in taxing the investment in such residential property in the hands of appellant, and also again taxing the same in the hands of appellant s spouse, Shri Madan Kukreja. 20. THAT in the facts and circumstances of the case, the Learned CIT (A) erred in confirming the addition of ₹ 85,595/- made by Learned A.O. 21. THAT the appellant craves leave to add, alter, amend or drop any of the above grounds at the time of hearing. 32. The brief facts of the case shows that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... linth area rate is based on CP WD PAR 1959 and duly enhanced with the cost index. The respective rate for other miscellaneous items was also included. The learned assessing officer determine the cost of construction of buildings spread over in six different years at ₹ 1 96,37,000/ . The assessee has pointed out several infirmities and one of the glaring mistakes that was pointed out by the assessee that the generator valued at ₹ 5 lakhs was included in the cost of construction whereas the assessee purchased an old generator and bill was also submitted before the lower authorities for the reference where the actual cost was only ₹ 402,000. The assessee also objected that the horticultural work has been valued at ₹ 2 lakhs which was merely a small page of grass on the open area and some flowerpots. Assessee also claims that there are cash withdrawals from syndicate bank by the assessee amounting to ₹ 2,275,000 which was invested in the construction of house only in such details were also placed at page number 99 of the paper book, assessee claims that the above amount of expenditure has not been considered by the learned District valuation Officer. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst verifying the cost of construction shown by the assessee and without first making a specific observation that assessing officer does not have any confidence in the cost of construction submitted by the assessee. Unless the assessee is found to have incurred some additional expenditure which are not recorded in the books of accounts or for which source of withdrawal from the bank or the cash available with the assessee is found to be not reliable, then only the learned assessing officer would have been justified in referring the matter to the learned DVO. This is also the dictum of the decision relied upon by the learned authorised representative. 35. In view of the above-encompassed facts collectively, we do not find any reason to sustain the addition made by the learned assessing officer of ₹ 85,595/ because of difference in house property cost of construction. Accordingly, the orders of the lower authorities are reversed and the appeal of the assessee is allowed. Assessment year 2011 12 36. Similar to the facts of assessment year 2010-11, the assessee filed her return of income on 25/11/2011 declaring total income of ₹ 693,320/ which was processed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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