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TMI Blog2020 (10) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... and on facts in confirming the order of Assessing Officer without appreciating the law that reference to DVO was made after completion of assessment proceedings. The re-opening should be held as null and void. III. The learned CIT(A) has grievously erred in law and on facts in confirming the additions of Rs. 44,65,300/- on the basis of Valuation Report of DVO without appreciating the facts of acceptance of books of accounts and ignoring the Provision of Section 50C(3) of the Act. The addition should be deleted. IV. The learned CIT(A) has grievously erred in law and on facts in confirming the re-opening of assessment us . 147 of the Act when reference to DVO was made by CIT(A), Assessing Officer had no jurisdiction for re-assessment. The re-opening be held as null & void being non-jurisdictional. V. The learned CIT(A) has grievously erred in law and on facts in confirming the addition of Rs. 44,65,300/- without appreciating the facts and detailed explanation of market value of adjacent properties. The addition should be deleted. 3. Brief facts of the case are that the assessee is a building contractor engaged in construction of raw houses. The assessee filed his return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by the ld.CIT(A), the ld.CIT(A) deleted the addition.Aggrieved by the deleting various additions, including addition on account of undisclosed investment, the Revenue filed appeal before Tribunal. However, the Revenue has not challenged the order in deleting the undisclosed investment in three plot of land. 5. Subsequently, the valuation report was received in the office of AO. The DVO valued the value of three plot of land at Rs. 79,38,000/-. On the basis of valuation of DVO, AO took his view that value of three plots were of Rs. 79,38,000/- and that the assessee has shown investments in land at Rs. 34,73,700/- only. The AO made a reason to believe that assessee made undisclosed investment of Rs. 44,65,300/- in three properties. On the basis of the aforesaid reason, the ld.AO reopened case u/s.147 of the Act. Notice u/s.148 dated 12.03.2013 was served upon the assessee. In the notice under section 148, the assessee was required to file revised return of income within 30 days of receipt of notice. The AO recorded that no return in response to notice under section 148 of the Act was furnished by the assessee till 16.07.2013. The AO served notice under section 142(1) dated 29.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter. The valuation of land in question is covered by the provision of section 142A(1) of the Act. The AO further took his view that the contention of assessee that purchase price was in accordance with the Jantri price is not acceptable, because the real value of the investment is more important for taxation purpose. The old Jantri price was not revised for so many years, which does not show the true value of land. The Government revised Jantri price in 2008 and as per Jantri price per square meter, the price of agricultural land in the concerned area was Rs. 7000 PSM. The assessee in its return of income disclosed his investment in three land at Rs. 34,73,700/- only. Therefore, the difference between the two values (Rs. 79.39,700/- minus Rs. 34,73,700/-) being Rs. 44,65,300/- was treated as undisclosed investment and added to the income of assessee in the assessment order passed by 143(3) r.w.s 147 on 28.02.2014. 9. On appeal before the ld.CIT(A), the action of ld.AO in reopening as well as in making addition on account of undisclosed investment was upheld. Further, aggrieved the assessee has filed this appeal before this Tribunal. 10. We have heard the submissions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Jantri rate on 2008. However, the assessee purchased the land in A.Y. 2006-07 and Jantri rate of A.Y. 2006-07 is applicable. The ld.AR of the assessee submits that copy of Jantri rates applicable during the relevant period showing the rate is placed on record.In support of his submissions, the ld.AR relied upon the decision of Hon'ble Jurisdictional High Court in Gayatri Enterprises vs. ITO in Tax Appeal No.399 of 2019,Bombay High Court in CIT Vs TulsidassKalichand (supra), Rajasthan High Court in SardarKehar Singh Vs CIT (supra) and Calcutta High Court in Reliance Jute Industries Ltd Vs ITO (supra) and decision of Tribunal in ACIT Vs Balkishan Poddar (supra). 12. On the other hand, the ld.DR for the Revenue submitted that reopening was not beyond the four years from the end of relevant assessment year. The AO has sufficient material for reopening of the case under section 147. The DVO in his report has mentioned that there is variation in the purchase value. The real value of the three plots were higher, which is certainly a fresh material on the basis of which the AO has reason to believe that income of the assessee has escaped assessment by not disclosing fully and truly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2013. Notice under section 148 was served on the assessee. The AO recorded the following reasons of reopening; "Reasons recorded for reopening of assessment The assessee has filed his return of income on 04.08.2006 declaring total income at Rs. 26,11,857/- and assessment was completed u/s 143(3) of the Act on 15.12.2008 determining total income at Rs. 56,25,860/-. It is noticed from the assessment record that assessee purchased immoveable properties, the details of the report of the Asstt. Valuation Officer in a tabular form is as under Sr. No. Description of property Date valuation Declared Value Assessed for his Share excluding stamp duty and other charges (Rs.) Difference (Assessed value-Declared Value) 1 Old S No. 379 & Block No. 358 Pal Surat 03.06.2005 22,66,200/- 36,83,000/- 14,16,800/- 2 Old RS No. 394 & Block No. 347 Pal Surat 28.02.2006 7,00,000/- 19,90,000/- 12,90,000/- 3 S No. 409/2 Block No. 387 Pal Surat 17.02.2006 5,07,500/- 22,66,000/- 17,58,500/- Total 34,73,700/- 79,39,000/- 44,65,300/- From the above table, it is seen from valuation report that the assessee has invested in property Sr No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record to prove that the assessee has paid more amounts while purchasing these three pieces of land, than what has been recorded in his books of account. The AO has neither recorded such averments in the reasons recorded nor raised any question the assessee during the assessment. The AO directly came on the conclusion on the basis of the report of DVO that assessee made investment which is not recorded in the books of assessee. The AO without discharging his onus directly concluded on unexplained investment. In our view section 142A merely speaks about the estimate of the valuation of investments. Estimate cannot take the place of actual investment. 18. The Hon'ble Jurisdictional High Court in Akshar Infrastructure (P) Ltd Vs CIT (2017) 79 taxmann.com 239 (Guj) held that where AO completed assessment under section 143(3) making certain addition in respect of unexplained investment, he could not reopen said assessment for enhancement of said addition merely on basis of report of DVO. It was also held that the opinion given by DVO was not per se information for purpose of reopening of assessment (Emphasis added by us). 19. The Hon'ble Rajasthan High Court in Sardar Kehar Singh Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of search carried out in case of another person, and came to know about loan transactions of assessee with a finance company, were bogus as said company was engaged in providing accommodation entries, it being a fresh information, the AO was justified in initiating reassessment proceeding in that case. In our view in the said case that AO has sufficient material and direct evidence for reopening. However, in the present case the AO made opinion on the basis of report of DVO, which is based on presumption. In R.K. Malhotra ITO Vs Kashturbhai Lalbhai (supra) and in CIT Vs PVS Beedies (supra) the intimation form Audit department was treated as valid 'information'. However, the facts in the instant appeal are quite differ as discussed above, the AO made reopening solely on the basis of report of DVO. In Rajesh Jhaveri Stock Broker (P) Ltd (supra) the intimation under section 143(1) was issued. The assessee in that case has not disclosed the primary facts. Thus, the facts of Rajesh Jhaveri Stock Broker (P) Ltd (supra) are not applicable with the instant case. The assessee in the instant case has disclosed all facts necessary for assessment. In Yuvraj Vs UOI (supra), held that points w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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