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TMI Blog2024 (9) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee chargeable to tax which has escaped assessment for the AY 2011-12 and 2010-11. There is no statement or discussion by the AO as to what was the basis and why he should proceed on the valuation report, its contents and why he should rely on the same. The reasons do not reflect that AO has applied his mind to the facts of the case to ascertain as to whether in fact the assessee had already declared the value of the aforesaid property under Fixed Assets and Capital WIP or whether such valuation is correct and proper and not. Case of the petitioner is squarely covered by the ratio laid down by the Apex Court in the case of Dhariya Construction Company [ 2010 (2) TMI 612 - SC ORDER ] - Thus impugned notice (s) u/s 148 are unsustainable - Decided in favour of assessee. - HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petitioner Through: Mr. Salil Aggarwal, Sr. Adv. with Mr. Madhur Aggarwal and Mr. Uma Shankar, Advs. For the Respondent Through: Mr. Vipul Agrawal, Sr.SC with Mr. Gibran Naushad and Ms. Sakashi Shairwal, Advs. JUDGMENT RAVINDER DUDEJA, J. 1. These two writ petitions, W.P. (C) 2516/2016 W.P. (C) 2530/2016 pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for the belief that income has escaped assessment:- A reference was made to the valuation cell during Assessment Proceedings to find out the cost of the property situated at Plot No. 4, District City Center, Sector-13, Dwarka, New Delhi vide reference dated 20.02.2013. Subsequently, valuation cell report dated 30.01.2015 was received in this office. After perusal of the valuation report, it was found that the DVO has estimated the investment made in renovation/reconstruction in the property situated at Plot No. 4, District City Center, Sector-13, Dwarka, New Delhi at Rs. 2,11,99,57,449/- for the period August 2009 to 31'' March. The valuation report also mentions that the assessee has declared total investment as NIL. Since, the report of the DVO was not before the Assessing Officer during the assessment proceedings for the AY 20 11-12 and 2010-11, the issue of investment in the above mentioned property was not examined. Therefore, I have reason to believe that this amount of Rs. 2,11,99,57,449/- represents income of the assessee chargeable to tax which has escaped assessment for the AY 2011-12 and 2010-11. 10. Petitioner filed objections dated 30.03.2015 to the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel placed strong reliance on the decision of Supreme Court in Bawa Abhai Singh v. Dy. Commissioner of Income-Tax (2002) 253 ITR 83 , wherein, reopening done on the basis of valuation report was upheld. With regard to the argument of the petitioner regarding non-consideration of the books of accounts prior to making reference to the DVO, it has been submitted that Section 142A does not mandate such a requirement. It is submitted that reasons recorded reveal that AO had applied his mind to the contents of the report of the DVO before forming a prima facie view and therefore reopening in the present case cannot be said be illegal or bad in any manner whatsoever. 14. Having heard the learned counsels for the petitioner and respondent, we are of the view that the writ petitions have merit and the reassessment proceedings initiated by the respondent are not sustainable for the reasons set out below. 15. The power of Income Tax Officer to reopen assessment though vide are not plenary, the words of statute are reason to believe and not reason to suspect . The reopening of assessment after lapse of many years is a serious matter. The Act, no doubt contemplates the reopening of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to apply his mind to the information, if any, collected and must form a belief thereon. 18. Dealing with an identical issue, this Court in the case of Mahashay Chunnilal vs. Deputy Commissioner of Income-Tax and Others (2014) SSC OnLine Del 561, while referring to the decisions of the Supreme Court in Bawa Abhai Singh (supra) and Dhariya Construction Company (supra) observed as under:- 16. The valuation report of this nature requires some statement or an averment by the Assessing Officer as to what was the basis and why he should proceed on the valuation report, its contents and why he should rely on the same while recording reasons to believe. This in the present case is lacking and absent. 17. The contention of the Revenue that the report submitted by the District Valuation Officer was material on the basis of which the reopening proceedings could be initiated in the facts of the present case is not sustainable. 18. In the case of CIT v. Puneet Sabharwal (2011) 338 ITR 485 (Delhi), a Division Bench of this court relying on the decision of CIT v. Smt. Suraj Devi (2010) 328 ITR 604 (Delhi) held that the primary burden of proof to prove understatement or concealment of income is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said property under the head Fixed Assets and Capital WIP at Rs. 592,13,59,681/-. Simply relying upon the report/estimate of the Valuation Officer, AO jumped to the conclusion that the amount of Rs. 211,99,57,449/- represents the income of the assessee chargeable to tax which has escaped assessment for the AY 2011-12 and 2010-11. 21. There is no statement or discussion by the AO as to what was the basis and why he should proceed on the valuation report, its contents and why he should rely on the same. The reasons do not reflect that AO has applied his mind to the facts of the case to ascertain as to whether in fact the assessee had already declared the value of the aforesaid property under Fixed Assets and Capital WIP or whether such valuation is correct and proper and not. In these circumstances, we are therefore, of the opinion that the case of the petitioner is squarely covered by the ratio laid down by the Apex Court in the case of Dhariya Construction Company (supra). 22. In view of the aforesaid proposition of law, impugned notice (s) under Section 148 of the Income Tax Act dated 30.03.2015 for the AY 2011-12 and 2010-11 are unsustainable. Both petitions are accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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