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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: SHRI R. S. SYAL & SMT SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessese against the order dated 28/01/2014 passed by CIT(A)- XXVIII, New Delhi.
The issue in this appeal is whether the report of the DVO can be a sole basis to sustain the addition u/s 69B of the Income tax Act, 1961 without any further substantial material brought on record by the Assessing Officer?
The assessee is an individual and by profession an advocate having income from profession and income from other sources. During the year under consideration, the assessee had purchased a property consisting of 1/4th share of ground floor at Plot No. 18, Babar Lance, Bengali Market, New Delhi for a consideration of Rs.60,50,000/-. The Assessing Officer observed that as per local enquiries made by the Inspector value of the property declared by the assessee was on the lower side, and therefore reference was made to District Valuation Officer, New Delhi on 24/10/2008 requiring him to make a proper valuation regarding investment in the property. Vide his report dated 26/12/2008 the Valuation Officer sent the valuation report in respect of above property determining the fair market value in respect of above property at Rs.1,23,58,000/- as against declared value of Rs.60,50,000/-. The assessee’s AR was given the copy of the valuation report and was asked to explain as to why the value determination by the Valuation Officer be not taken as the true investment in the property instead of the declared value of the property. And why the difference of Rs.63,08,000/- be not treated as undisclosed investment by the assessee as per the provisions of Section 69B of the Income tax Act, 1961.
Vide letter dated 29/12/2008, assessee filed her submissions which have been examined and kept on record. The Assessing Officer held that submissions made by the assessee’s counsel were not tenable as the assessee deliberately entered into purchase transactions at lower
value in order to evade tax. As such the amount of Rs.63,08,000/- was treated as unexplained investment as per provisions of Section 69B of the I.T Act, 1961 and this amount was added to the income of the assessee by the Assessing Officer .
Aggrieved by the said assessment order, the assessee filed appeal before the CIT(A). The CIT(A) sustain the addition of Rs. 63,08,000/- made by the Assessing Officer under Section 69B of the Act.
The Ld. AR submitted that Section 142A of the Act was not properly invoked by the Assessing Officer. The Assessing Officer has not taken any proper inquiry related to the valuation of the land purchased. Only relying on DVO’s report cannot be the sole ground for the addition made by the Assessing Officer. The Assessing Officer without considering the objections filed by the Assessee, passed the Assessment Order. The Assessing Officer erred in arriving at the finding that there is an excess expenditure incurred by the Assessee in acquiring the property.
The Ld. DR relied on the orders of the Assessing Officer and CIT(A).
We have heard both the parties. There are various judgments which states that DVO’s report solely cannot be taken into account for making an addition u/s 69B of the Act. There is no material or any enquiry as such through proper channel has been made by the Assessing Officer.
The entire purpose of Section 142A of the Act was not taken into account by the Assessing Officer as well as by the CIT(A). Hence, the order of the CIT(A)is set aside.
In result, the appeal of the assessee is allowed.
The order is pronounced in the open court 03rd of August, 2016.