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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI BHAVNESH SAINI, & SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - XXII, New Delhi dated 25.02.2014 pertaining to Assessment Year 2007-08.
The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the action of the Assessing Officer in initiating proceedings u/s 148 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] thereby confirming the addition of Rs. 1.61 crores u/s 69B of the Act on the basis of valuation report of the Valuation Officer – I, Delhi
Briefly stated, the facts of the case are that the assessee had purchased a plot at Civil Lines, Delhi. The cost of acquisition of the plot was declared at Rs. 34 lakhs. The Assessing Officer found that part of the plot was purchased by Smt. Sadhana Gupta, in whose case the matter was referred to the Valuation Officer and on the basis of the report of the Valuation Officer, value of the said property was taken at Rs. 48,762/- per sq yard. Taking a leaf out of the proceedings in the case of Smt. Sadhana Gupta, assessment was reopened.
During the course of reassessment proceedings, copy of the valuation report was confronted to the assessee and the assessee was asked to explain as to why the cost of acquisition of the plot may not be taken at Rs. 1.95 crores instead of Rs. 34 lakhs.
On receiving no plausible reply, the Assessing Officer made addition of Rs. 1.61 crores.
The assessee carried the matter before the ld. CIT(A) but without any success.
Before us, the ld. counsel for the assessee vehemently stated that the entire assessment was around the valuation report gathered by the Assessing Officer in the case of Smt. Sadhana Gupta. The ld. counsel for the assessee pointed out that the additions made in the hands of Smt. Sadhana Gupta were deleted by the Tribunal in which order has been affirmed by the Hon'ble High Court of Delhi in ITA No. 434/2012 vide order dated 06.03.2013.
Per contra, the ld. DR could not bring any distinguishing decision in favour of the Revenue.
We have given thoughtful consideration to the orders of the authorities below. We find force in the contentions of the ld. counsel for the assessee. The co-ordinate bench in the case of Smt. Sadhana Gupta [supra] vide order dated 30.11.2011, has decided a similar issue in favour of the assessee and against the Revenue. The relevant findings of the co-ordinate bench read as under:
We have considered the facts of the case and submissions made before us. The facts are that the assessee had shown purchase consideration of a property at Rs. 59.50 lakh. A reference was made to the DVO as the purchase consideration appeared to be too low. The DVO valued the pdroperty at Rs. 3,41,35,000/-. The difference in the two amounts of Rs. 2,81,'83,000/- has been added to the income of the assessee by relying on the provision contained in section 69B. Although a number of cases have been cited before us, we find that the facts of this case are similar to the facts in 703/2010 dated 18,08.2011, a copy of which has been placed before us. The judgment reads as under:-
“Present: Ms. Suruchi Aggarwal, Stf. Standing Counsel for the Revenue Mr. Piyush Kaushi, Advocate for the respondent/assessee
IT 689/2010 ITA 690/2010 ITA702/2010 ITA703/2010 (common orders)
In all these cases, assessment was carried out under section 153A of the Income-tax Act pursuant to search at the premises of the assessees carried out by the Department under section 132 of the Act. While carrying out the assessment, the Assessing Officer found that one of the properties, i.e., 101, Ground floor, Bangala Sahib Road, New Delhi, was acquired by Shri Bhagirath Agrawal and Suraj Devi at a cost of Rs. 62,50,000/-. This property was rented to Indian Overseas Bank. The said property was purchased in the joint names with different shares given to different assessees. The matter was referred to the Valuation Cell of the Department under section 142(1 A) .of the Act. The valuer valued the property at much higher rate than the consideration shown in the sale deed and on the basis additions were made in the hands of the assessee, under section 69 of the Act as ‘ unexplained investment’.
These additions were deleted by the CIT(A) and the order of the CIT(A) has been affirmed by the ITAT. Vide impugned order the ITAT decided the cases of all joint owners who purchased the said property which includes Smt. Suraj Devi, Shri Sushil Kumar Aggarwal, late Shri Shiv Narain Aggarwal etc. The Department had filed appeal in die case of Smt. Suraj Devi under section; 260-A of the Act to this Court which was registered as ITA 811/201Q and; has been dismissed by a Division Bench of this court vide orders dated 13th August, 2010 Following that order appeals of other co- owners/assessees i.e., ITA 155.1/2010, ITA 1370/2010 and IT&16&6/2610 were also dismissed.”
Similar is the decision in the case of CIT Vs. Puneet Sabharwal, dated 03.12.2010, 2011-TIOL-348-HC-DEL-IT. It has been held that in absence of any evidence coming into possession regarding payment of extra purchase consideration, the Tribunal was right in holding that no addition can be made notwithstanding the report of the DVO.”
The order of the Tribunal was challenged by the Revenue before the Hon'ble High Court of Delhi and the Hon'ble High Court, vide judgment dated 06.03.2013 [supra] dismissed the appeal of the Revenue by holding as under:
“5. The law seems to be well settled that unless and until there is some other evidence to indicate that extra consideration had flowed in the transaction of purchase of property, the report of the DVO cannot form the basis of any addition on the part of the revenue. In the present case there is no evidence other than the report of the DVO and, therefore, the same cannot be relied upon for making an addition. In these circumstances, the question which has been framed is decided in favour of the assessee and against the revenue. The appeal is dismissed.”
As mentioned elsewhere, the entire assessment revolves around the findings given in the case of Smt. Sadhana Gupta.
Therefore, respectfully following the decision of the co- ordinate bench and the Hon'ble Jurisdictional High Court of Delhi [supra], we direct the Assessing Officer to delete the impugned addition.
In the result, the appeal filed by the assessee in is allowed.
The order is pronounced in the open court on 08.01.2020.