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TMI Blog2011 (12) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer on account of bogus capital gain. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law and facts in deleting the addition of Rs. 6,09,000/- made by the Assessing Officer on account of unaccounted money paid for the purchase of immovable property. 2. The first issue relates to deleting the addition of Rs. 5,18,220/- made by the Assessing Officer on account of bogus capital gains. The facts of the case stated in brief are that the assessee had purchased 10,000 shares of M/s Betsy Growth Finance Ltd. on 03.04.2000 and the said fact was disclosed by the assessee in their return of income for assessment year 2001-02. The said return was filed by the assessee in regular course on 22.10.2001 u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said shares through Diwakar Securities Ltd. for Rs. 5,18,110/-. The sale contract note and bill of the said broker were also produced before the Assessing Officer and were available on record. The assessee had executed transfer deed in favour of the said share broker and the said shares were duly transferred to the Demat account of Diwakar Securities Ltd. maintained with Stock Holding Corporation of India. Further, it was also contended that Shri A.K. Goel in his statement had admitted that the said shares were transferred from the Demat A/c of the assessee to his account. The investigating team had also recorded statement of the other persons after the search. The said persons were not offered for cross examination of the assessee in spit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnet Ltd. was questioned. The statements of various persons were recorded including the directors of M/s. Diwakar Securities Ltd., who have denied the transaction having been entered with the assessee for sale of shares. The AO has recorded a finding to the effect that the assessee did not own these shares on 31.3.2001 as per details of investment in shares and debentures as on 31.3.2001 as per Page 11 of Annexure A-S of Panchnama drawn at the residence of the assessee at the time of search on 4.11.2004. By considering the statement of director or M/s. Diwakar Securities Ltd. the AO reached to the conclusion that since the shares were not held by the assessee as on 31.3.2001, there did not arise any occasion for its sale to M/s. Diwakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leting the addition made by the AO, and should have controverted the findings recorded by AO by mentioning his observation and comments thereon. The CIT(A) has also not given positive finding with regard to holding of shares by assessee on the date of sale. In all fairness and in the interest of justice, we restore the entire matter back to the file of the Assessing Officer and the Assessing Officer is directed to allow cross examination of the witnesses by the assessee and to decide the issue afresh after giving due opportunity to the assessee. We direct accordingly. 8. Since on identical issue, ITAT has set aside the matter to the file of the Assessing Officer, respectfully following the order of ITAT, we restore the issue to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged undisclosed payment of Rs. 6,09,600/-. The report of DVO was merely an opinion and would not become an evidence of any undisclosed investment. The CIT(A) deleted the addition on the ground that the addition was made based on valuation report of the departmental valuer. He noted that onus was on the department to prove that there was undisclosed investment in the property. No such evidence was brought on record to justify the addition. The CIT(A) relying on the decision of Hon ble Supreme Court in the case of K.P. Varghese vs. ITO, 131 I.T.R. 597 and CIT vs. Shivakami Co. Pvt. Ltd., 159 I.T.R. 71 has held that addition merely on account of valuation report could not be made. 11. We have heard both the parties. Admittedly, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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