DCIT, CENTRAL CIRCLE AJMER vs. VIJAY GRANIMARMO PRIVATE LIMITED, NAYA GHAR GULAB BARI AJMER

2. (ii) Whether on the facts and circumstances of the case for the assessment year under consideration, the ld CIT(A) is justified in Law in deleting the addition of Rs. 1,39,76,229/- without appreciating the settled principle that when there is a difference between the book value of investment recorded by the assessee and the actual investment made, the matter is considered on merits; thereby ignoring the registered valuer’s report that proves beyond doubt that the value of investment recorded in the books were not correct.

3(iii) The appellant craves leave to add, amend or withdraw any of the ground of appeal during the proceedings.”

Grounds of assessee’s C.O.: “1. That the appeal filed by the Ld DCIT Central Circle Ajmer challenging the decision of the Ld CIT(A)- Jaipur 5 of deleting the addition of alleged unexplained investment in construction of factory premises, simultaneously accepting the decision of the Ld CIT(A) of holding reference to the private valuer as without any authority of law and valuation report relied upon by Ld AO as illegal, is not maintainable.

2. That the appeal filed by the Revenue without disclosing the basis of assertion made in ground no 2 regarding settled position of law is completely misdirected and misleading, when settled position of law 4 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited stands to the contrary, which has duly been followed by the Ld CIT(A) in discountenancing the absolutely illegal exercise of power by the authorised officer during search and Ld Assessing Officer thereafter.

3. That the approval granted by the Additional CIT u/s 153 D is absolutely illegal as the same has been granted in complete mechanical manner without any application of mind and also without quoting DIN which is a mandatory requirement.

4. That appropriate costs be awarded to the respondent for not only perpetuating the acts of malfeasance by the Revenue but also indulging in malicious prosecution, firstly in making reference to the private valuer malafidly in defiance to statutory provisions of Income Tax Act, making huge illegal additions to the income of the appellant basing thereon, and in filing baseless and frivolous appeal.”

5. The fact as culled out from the records is that the search and seizure action 132 of I.T. Act, 1961 was carried out on 13.02.2020 at the residential and business premises of the assessee group and her family members i.e “Saini Gupta Jain Somani Malpani Group” of Ajmer. Various assets had been found at the time of search and some of them were also seized at various places of the group at the time of action u/s 132 of IT. Act. Certain incriminating documents/Loose papers/Books of accounts etc. were also found, inventorized and some of them also seized or impounded at the time of search/survey u/s 132/133A of the IT. Act. The assessee is engaged in business of Manufacturing Activities of Natural Stones like Granite, Sand Stone, Tiles etc. issued on 06.03.2021 which was duly served upon the assessee by E mail. In response to the notice u/s. 153A, the assessee submitted return of income on 15.08.2021 declaring income of Rs. Nil.

5.2 During the course of search proceeding conducted at the premises of the assessee. It has been observed that valuation of the property being land, construction work and extra items was undertaken as there was significant difference noticed in the valuation shown by the assessee in its books of accounts as well as the physical over view of the property. Accordingly, the matter was referred to the registered valuer Shri Nagendra Choudhry who submitted his report on 14.02.2020, as per the said valuation report the property was valued at Rs. 6,03,61,486/-. During the assessment proceeding vide notice u/s 142(1) dated 14.08.2021 the assessee was asked to explain the source of the investments made over and above its books value. In response to the same the assessee vide its letter dated 21.09.2021 has made its submissions which have been carefully gone through by the ld. AO and after taking into accounts all the fact and circumstances the valuation of the property has been calculated by considering that the construction work was started in the F.Y 2018-19 and completed in the F.Y 2019-20. While calculating the cost of construction and cost of extra items have only been considered and the cost of land has been ignored. The registered valuer has valued the property on the fair market value as on 14.02.2020.

Therefore, the reverse calculation method has been adopted by applying the indexed cost of improvement for the F.Y 2018-19 to 2019-20. Based on these facts and after allowing the self- supervision charges @ 7.5 % the ld. AO calculated the difference of cost of construction and extra items comes to Rs. 1,39,76,229/- for the F. Y. 2018-19 relevant to A. Y. 2019-20 and the same represents that the assessee had made unexplained investments of Rs. 1,39,76,229/- in construction of the immovable property which is over and above the figure mentioned in the balance sheet.

Based on these addition the assessment was completed.

6. Feeling dissatisfied from the order of the assessing officer, the assessee filed an appeal before the ld. CIT(A). A propose to the grounds so raised by the assessee the relevant finding of the ld. CIT(A) is reiterated here in below:

“Decision on Ground no. 1

6.3 I have considered the facts of the case and written submission of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration from which following facts comes out:

1. No evidence in any form of documents/paper/diary etc were found during the course of survey/ search action relating to construction expenses which were incurred but the same was not recorded in books.

2. No evidence for any unrecorded expenditure was found during search for purchasing the land on which construction was made.

3. Search was conducted in the year 2020 (13/04/2020)

4. Reference was made to Valuer on the basis of physical overview as written by AO in its assessment order para 7.

5. The factory building was referred for valuation to a private registered valuer Shri Nagendra Chaudhary. He submitted his report on 14.02.2020. The search date was 13.02.2020. Thus, the report had submitted within one day. The appellant had claimed that the valuation officer has not got any explanation or information from the appellant company on the valuation facts, which seems to be on merit.

6. Provision of section 142A has not been followed.

7. The AO had Not made any reference to Valuation officer following the section 142A in which "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957.

8. No incriminating document was during found course the of search for undisclosed investments. No document / evidences were found or seized regarding out of books investment in the factory building during the course of search & survey.

9. It is observed that the addition is neither based on any single loose paper found/seized nor on any statement recorded during the course of search conducted in the case of the appellant who can be considered as corroborative evidence.

10. There are two types of Valuer (1) Registered Valuer and (2) Valuation Officer. Registered Valuer work in private capacity and can be termed as Private Valuer. Registered Valuer i.e. Private Valuer work in private capacity under a license issued by the Board. Valuation officer can be termed as Departmental Valuer. They are recognised by the Income-tax Department and are authorized valuer of Income-tax Department. Departmental valuer i.e. valuation officers are the valuation officer approved/ authorised by the Income-tax Department.

8 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited The tax authorities will take the recourse of the value estimated by these valuers. In other words, if the tax authorities need to ascertain the value of an asset, then they will request the Valuation officer to ascertain the value of the capital asset and the value determined by them will be taken into consideration by the tax authorities.

11. The reference was made by the DDIT to the Private registered valuer during the course of search. No fresh reference was made to Valuation Officer (Department valuer) u/s 142A either during search, post search or during the course of assessment proceeding and assessment order has been passed without referring to Valuation officer.

12. The appellant had argued and contended that other than private valuer report no corroborative evidences were found during the search regarding unrecorded expenditure of factory building

13. Addition made by the A.O. was without their being any supporting material found during the search and the addition has been made only based on private valuer report. Further the appellant had also relied upon the judgment in the case of CIT Vs Nishi Mehra', reported as (2015) 56 taxman.com 89 (Del) in which it was held that no addition can be made merely only on the basis of valuation Report in the absence of any corroborative evidence. In view of the above, the AO could not tax the said amounts merely based upon the valuation report in absence of any incriminating and corroborative material to point out under-valuation of the property in question.

14. In search assessment, any undisclosed income, which can ultimately be added, is only to the extent of any unrecorded assets/material found or any corroborative or supporting evidences document found as representing undisclosed income earned. Further, the facts of the present case remains that AO had not gathered any evidences and there is no supporting evidence related to unaccounted expenditure. Thus, the addition made by the A.O. on the basis of private valuer report in the absence of any incriminating material found during the search operation conducted u/s 132 of the Act is liable to be deleted. TAX DEPA

6.4 Considering the above discussion the addition made by AO based upon the valuation report is hereby deleted. Thus, the ground of appeal on this issue is herby allowed.

Decision on Ground no. 2 & 3 before the ld. CIT(A)

“7.2 I have considered the facts of the case and written submission of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration from which following facts comes out:”

2. Registered Valuer work in private capacity and can be termed as Private Valuer. Registered Valuer i.e. Private Valuer work in private capacity under a license issued by the Board.

5. The factory building was referred for valuation to a private registered valuer Shri Nagendra Chaudhary. Thus, the AO had not made any reference to Valuation officer following the section 142A in which "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957.

7.3 An overview of the provision of section 55A of the Income tax Act is as under :-

Section 55A has provided the circumstances in which and the purposes for which a reference could be made by the tax authorities to a Valuation Officer for valuation of capital asset. As per section 55A, with a view to ascertaining the fair market value of a capital asset, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer. The circumstances in which reference can be made by the Assessing Officer to the valuation officer will be broadly classified as follows:

10 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited claimed by the taxpayer and the fair market value of the asset are in variation i.e. both the values differ. The variation i.e. the difference could be of any amount.

2. A case other than above If the case is not covered under (1) above, then the Assessing Officer can make a reference to the valuation officer if he is of the opinion:

(i) that the fair market value of the asset exceeds the value of the asset as claimed by the taxpayer by more than such percentage (currently 15%) of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do.

When any reference is made by the Assessing Officer to the valuation officer under section 55A, then the provisions of following sections of Wealth-tax Act, 1957, shall apply with the necessary modifications, Apart from the provisions of section 55A, section 142A also empowers the Tax Authorities to make a reference to a Valuation Officer.

7.4 An overview of the provision of section 55A of the Income tax Act is as under :-

Under section 142A, the Assessing Officer for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment. "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957. The Assessing Officer may make a reference to the Valuation Officer as above whether or not he is satisfied about the correctness or completeness of the accounts of the taxpayer The Valuation Officer, on a reference made by the Assessing Officer, shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section 38A of the Wealth-tax Act, 1957. The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the taxpayer may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the taxpayer. The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment, if the taxpayer does not co-operate or comply with his directions. The Valuation Officer shall send a copy of the valuation report, to the Assessing Officer and the taxpayer, within a period of six months from the end of the month in which a valuation reference is made. The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the taxpayer an opportunity of being heard, take into account such report in making the assessment or re-assessment.

11 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited 7.5 In the present case the procedure laid down u/s 142A r.w.s section 55A of the Income tax Act as stated above has not been followed. The reference was made by the DDIT to the Private registered valuer during the course of search. No fresh reference was made to Valuation Officer (Department valuer) u/s 142A r.w.s section 55A of the Income tax Act either during search, post search or during the course of assessment proceeding and assessment order has been passed without referring to Valuation officer. The addition was made only on the basis on report of private valuer.

7.6 Considering the above discussion the ground of appeal no. 2 and 3on this issue is herby allowed.

8.2 I have carefully gone through the assessment order, the written submission along with the paper book and relevant case laws relied by the appellant.

8.3 The section 153D reads as under Prior approval necessary for assessment in cases of search or requisition. 153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:

Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub-section (12) of section 144BA."

There is no time limit prescribed in this section for granting approval by Joint Commissioner.

The appellant had argued that there was no application of mind by the Addl. CIT as the draft assessment order was approved by the Addl. CIT on the same day. The appellant has advanced this argument without any evidence of non application of mind by the Addl. CIT. The argument seems to be only on the basis of same day approval. This argument of the appellant is not found to be justified. In this regard judgment of Hon'ble High Court of Bombay in the case of Chhagan Chandrakant Bhujbal Vs Income-tax Officer [2022] 136 taxmann.com 24 (Bombay) [2022] 440ITR 359 (Bombay) is relevant. In that case Hon'ble High Court held as under:-

"In the case at hand, there is nothing to indicate that there was non- application of mind. Merely because information was received at 5.47 p.m. and the notice was issued by 10:49 p.m. would not mean that there has been non-application of mind. If we hold that it would be merely speculative and based on conjecture."

12 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited This judgment was rendered with reference to approval granted by the CIT for issuing notice u/s 148. However, the ratio of this judgment is applicable Page 39 of 41 AAIFV3552C- V C GRANITE A.Y. 2020-21 ITBA/APL/S/250/2022- 23/1049108090(1) on the facts of this case. The appellant has not established non application of mind by the Addl. CIT in this case also. Only because approval was granted by the Addl. CIT on the same day would not mean that there has been non application of mind by the Addl. CIT. Further, there is no time limit prescribed under the Act for granting approval under section 153D of the Act. Therefore, contention of the appellant are found to be without any bass. The facts of case laws relied upon the appellant are different from the present case hence not found applicable on the facts of the case. Thus, this ground of appeal is hereby dismissed.”

7. Revenue feeling dissatisfied from the findings of the ld. CIT(A) has preferred the appeal in on the grounds as reiterated here in above mainly challenging the action of the ld. CIT(A) in deleting the addition of Rs. 1,39,76,229/- made on account of unexplained investment for construction of the factory premises. Even the assessee also preferred the cross objection in CO No. 08/JP/2023 as the assessee not satisfied from the finding of the ld. CIT(A) contending that his ground for approval granted by the Addl. CIT on mechanical manner and without quoting the DIN is not considered. The assessee also objected the ground of the revenue that the private valuer report be relied upon though there is no specific ground taken by the revenue while challenging the finding of the ld. CIT(A) but since they challenged the addition the assessee submitted that the grounds of the revenue devoid of merit as revenue has accepted the finding of the upon that finding there is no ground of the revenue and therefore, the appeal of the revenue devoid of the merits.

Accordingly, the matter was correctly referred to register valuer Shri Nagendra Choudhry who submitted his report on 14.02.2020 and based on that report and considering the contention of the assessee addition was correctly made for an amount of Rs. 1,39,76,229/-. She further submitted that at page 11 the ld. CIT(A) contended that the assessee was allowed 5 % deduction for self- supervision and in fact 7.5 % has already been allowed at the time of the assessment proceeding so the facts are not correct in the finding given by the ld. CIT(A) and the ld. CIT(A) has not deem it fit to give opportunity to the AO before coming to that conclusion. The evidence in any form of documents / paper / diary etc., were found during survey / search action in fact this has been recorded by the ld. AO in his order and considering that aspect of the matter reference to a private valuer was made at the time of survey/search operation. As regards the valuation done by a valuer or department valuer, it does not make any difference when the registered valuer is also authorized by the revenue. The decision cited by the assessee and relied on by the ld. CIT(A) are on different facts and are not applicable to the present set of facts and thus she supported the order of the ld. AO contended that it is not only the physical difference but also the books cost and valuation does not match. Therefore, she strongly objected to the finding of the ld. CIT(A). To support the contentions so raised the ld. DR relied on the decision of the apex court in the case of Dhakeswari Cotton Mills Ltd. Vs. CIT 26 ITR 775 (SC) and combated the finding of the ld. CIT(A) as argued.

9. Per contra, the ld. AR of the assessee argued that though the ld. AO made reference of the incriminating material but the same was neither confronted to the assessee nor referred to by the ld.AO in the assessment order, merely mentioning that material found will audited books of accounts. The accounts are audited under the income tax and under the companies act both the report placed on record and no defects were pointed out in those books of account placed on record and verified at the time of survey. Thus, it is very much clear that the reference to valuation is made purely on physical appearance as stated in the assessment order. Thus, it is beyond doubt and there is no material placed on record by the ld. AO in this appeal through ld. DR to counter the finding of the ld. CIT(A). Thus, it has been correctly held by the ld. CIT(A) that the addition made by the ld. AO on the basis of private valuer report in the absence of any incriminating material found during the search operation conducted u/s. 132 of the Act and the same has rightly been held so. The revenue has not challenged this finding of the ld. CIT(A) and therefore, the contention so raised by the revenue is not correct and not valid in law challenging the addition. Thus, making the reference to the registered valuer is nothing but an action based on the surmises and conjectures. There is no search, but survey conducted at the business premises of the assessee, so the contention of the ld. DR that there was search is also not correct. He also submitted that the ld. CIT(A) rightly observed that there is no incriminating material found. Even the ld. AO through the present appeal of the revenue so the finding of the ld. CIT(A) becomes final and binding to the ld. AO. Therefore, there is no merits in the grounds taken by the revenue and the appeal of the revenue is required to be dismissed as there is no incriminating material no reference to the private valuer can be made in the absence of any incriminating material tangible suggesting that the assessee has undervalued the property is merely the assumption and presumption of the ld. AO. The ld. AR of the assessee vehemently argued that how the physical appearance based the ld. AO’s opinion, reference to the private valuer be considered as valid reference and that too in the absence of the corroborative evidence and iota of doubt or evidence of out of books expenditure. The revenue has surveyed the premises of the assessee wherein not single evidence suggesting the under valuation is found. As the finding of the ld. CIT(A) that the reference was not correct is not challenged and the revenue cannot challenge the action of deleting the addition by the ld. CIT(A) without challenging that finding of the ld. CIT(A). The ld. AR of the assessee also submitted that though the valuation report obtained by the ld. AO at time of the survey but the copy of the same was only given at the time of the assessment.

In the assessment proceedings the assessee objected to the action department valuer cell. The books of accounts were seized and were released as no defects found on those books. The valuation is made on a particular date wherein the comparison is made at that time rate. In support of the cross objection and in support of the finding of the ld. CIT(A), the assessee has filed a detailed written submission the contention of the assessee in the written submission reads as under:

“Written Submissions on behalf of the Respondent in respect of appeals filed by DCIT Central Circle Ajmer and CO of the Respondent; Most humbly it is submitted that decision of the Ld CIT (A) has been challenged by the DCIT Central Circle Ajmer, raising the following identical grounds of appeal for both the assessment years; Grounds of appeal for A.Y.2019

20. Gr (i) - Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld CIT (A) is justified in deleting the addition of Rs 1, 39, 76,229/ made on account of unexplained investment for construction of factory premises without appreciating the fact that the valuation of construction was taken into account as per the report prepared by the registered valuer during the search proceedings in the presence of authorised person/representative of the assessee. Gr.( ii) Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld CIT(A) is justified in law in deleting the addition of Rs 1,39,76,229/ without appreciating the settled principle that when there is difference between the book value of the investment recorded by the assessee and the actual investment made, the matter is considered on merits , thereby ignoring the registered valuer’s report that prove beyond doubt that the value of investment recorded in the books were not correct. Grounds of appeal for A.Y.2020

21. Gr (i) - Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld CIT(A) is justified in 18 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited deleting the addition of Rs 75,03,045/ made on account of unexplained investment for construction of factory premises without appreciating the fact that the valuation of construction was taken into account as per the report prepared by the registered valuer during the search proceedings in the presence of authorised person/representative of the assessee.

Gr.( ii) Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld CIT(A) is justified in law in deleting the addition of Rs 75,03,045/ without appreciating the settled principle that when there is difference between the book value of the investment recorded by the assessee and the actual investment made, the matter is considered on merits , thereby ignoring the registered valuer’s report that prove beyond doubt that the value of investment recorded in the books were not correct.

Submissions;

Grounds on which the decision of the Ld CIT(A) of deleting the grossly illegal addition made by the Ld Assessing Officer has been challenged by the revenue are that in making the addition, valuation of the construction was taken into account as per the report prepared by the registered Valuer during the search proceedings, the report was prepared in the presence of authorised person/representative of the assessee, that it is the settled principle of law that when there is difference between the book value of the investment recorded by the assessee and the actual investment made, the matter is considered on merits, and that the registered valuer’s report that prove beyond doubt that the value of investment recorded in the books were not correct cannot be ignored.

At the very outset, it is humbly submitted that the alleged report of the Valuer basis which addition to the total income of the respondent herein was made, is clearly an act of absolute administrative indiscretion by all the tax authorities involved right from the DDIT who allegedly obtained the report, the Assessing Officer who formed the report basis of his absolutely arbitrary and illegal addition and the authorities involved in the process of filing the present appeal. In the process, all the rules, regulations, statutory mandates and duties and responsibilities attached to the posts have been thrown to the wind by the tax authorities.

The present appeals challenges the very judicious and well reasoned order of the Ld CIT (A) claiming that in making the addition, valuation of the construction was taken into account as per the report prepared by the registered Valuer during the search proceedings, but maintain complete silence on the decision of the Ld CIT (A) of correctly holding the reference to the registered valuer absolutely illegal and in fragrant violation of the statutory provisions. When the Ld CIT (A) has categorically held that valuation of the property can only be done by a 19 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited Departmental valuer as defined under section 142A r.w.s. Section 55A of the Income Tax Act and no such reference having been made either by the DDIT Investigation or even by the Ld Assessing Officer, without challenging the legality of the decision rendered by the Ld CIT (A) in this regard, there remain no basis for challenging the deletion of addition which is only consequential.

The appellant revenue claims that the report was prepared by the vlauer in the presence of authorised person/representative of the assessee, without stating as to how the presence of authorised representative legitimizes the absolutely illegal and arbitrary act of obtaining report from private valuer. When the action of the DDIT of getting report of the valuer from a Private Valuer in preference to the Departmental Valuation Officer as prescribed under section 142A, presence or absence of the authorised representative of the assessee is of no ocnseuqnece.

Revenue further states that it is the settled principle of law that when there is difference between the book value of the investment recorded by the assessee and the actual investment made, the matter is considered on merits, and that the registered valuer’s report that prove beyond doubt that the value of investment recorded in the books were not correct cannot be ignored but miserably failed in citing a single authority in support of its claim, thus making absolutely false and misleading representation before the Hon’ble Tribunal which need to be condemned in unequivocal terms.

It is humbly submitted that the Ld CIT (A) considered all the submissions of the respondent and based his well reasoned and judicious order on all legal and factual issues arising from the absolutely illegal and arbitrary assessment order. All these grounds considered by the Ld CIT (A) remain uncontroverted and have not been challenged by the appellant revenue.

All the grounds on which relief has been allowed by the Ld CIT(A) remained uncontroverted - Ld CIT(A) deleted the addition inter alia for the following reasons; (Para 6.3 , Pg 19-20);

1. No evidence in any form of document /paper/diary etc were found during the course of survey/search action relating to construction expenses which were incurred but the same were not recorded in Books.

3. Search was conducted in the year 2020 (13/02/2020)

4. Reference was made to valuer on the basis of physical overview as written by AO in its Assessment order para 7.

8. No incriminating document was found during the course of search for undisclosed investments. No document/evidences were found or seized regarding out of Books investment in the factory building during the course of search & Survey.

11. The reference was made by the DDIT to the private registered valuer during the course of search. No fresh reference was made to the valuation officer (Departmental valuer) u/s 142A either during search, post search or during the course of assessment proceeding and assessment order has been passed without reference to Valuation Officer.

13. Addition made by the AO was without there being any supporting material found during the search and the addition has been made only

21 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited based on private valuer report. Further, the appellant had also relied upon the judgement in the case of CIT Vs Nishi Mehra, reported as (2015) 56 taxmann.com 89(Del) in which it was held that no addition can be made merely only on the basis of valuation report in the absence of any corroborative evidence. In view of the above, the AO could not tax the said amounts merely based upon the Valuation report in absence of any incriminating and corroborative material to point out under valuation of the property in question.

14. In search assessment, any undisclosed income which can ultimately be added, is only to the extent of any unrecorded asset/material found or any corroborative or supporting evidences document found as representing undisclosed income earned. Further, the facts of the present case remains that AO had not gathered any evidences and there is no supporting evidence related to unaccounted expenditure. Thus, the addition made by the AO on the basis of private valuer report in the absence of any incriminating material found during the search operation conducted u/s 132 of the Act is liable to be deleted.

Thus, it is evident that none of the grounds on which relief has been allowed by the Ld CIT(A) has been disputed by the department in the present appeal. Therefore, the appeal filed by the department on absolutely frivolous grounds need to be dismissed.

No challenge to the decision of the LD CIT (A) of holding the Valuation report of the registered valuer as illegal and without any authority of law-

In the appeal filed before the Ld CIT (A) the following specific grounds of appeals were taken as ground no 2 and 3 which read as under;

Gr No2 - On the facts and in the circumstances of the case the LD AO has erred in making addition u/s 69 of the Act on the basis of valuation report of a registered valuer to whom a reference was made during the course of survey/search without any authority of law.

Gr No 3- (i) The Ld AO grossly erred on facts and in law in making addition u/s 69 on account of unexplained investment in construction of factory building on the basis of illegal report of a registered valuer who is not authorised to make valuation on behalf of department as he is not a ‘Valuation officer’ as required in clause (r) of Section 2 of Wealth Tax Act 1957. (ii) The Valuer has also not provided an opportunity of being heard to the appellant assessee, which is a mandatory requirement.

Ld CIT(A) after considering the detailed factual and legal submissions made before him and after analysing the statutory provisions of Section 55A and Section 142A of the Income Tax Act, while allowing the grounds of appeal in toto observed as under;

“ Para 7.5- In the present case the procedure laid down u/s 142A r.w.s Section 55A of the Income Tax Act as stated above has not been followed. The reference was made by the DDIT to the Private registered valuer during the course of search. No fresh reference was made to the valuation officer (Department Valuer) u/s 142A r.w.s Section 55A of the Income Tax Act either during search, post search or during the course of assessment proceedings and assessment order has been passed without referring to Valuation Officer. The addition was made only on the basis on report of private valuer.”

Since, all the ground, legal and factual included, forming the basis of decision of Ld CIT(A) quashing the absolutely illegal addition made by the Ld AO remained uncontroverted, the present appeals being absolutely frivolous, raising vague, false, unrelated and unconnected grounds need to be dismissed. Reliance upon the submissions made before the Ld CIT (A) and the observations made by the Ld CIT (A) are reiterated in support. Without prejudice it is also submitted that during the course of assessment proceedings, factual errors and inaccuracies even in the illegal valuation report were duly pointed out to the Ld Assessing Officer and it was adequately represented before him that even on the basis of illegal report, after duly accounting for the errors and inaccuracies , there is no difference in the value of investment recorded in the Books of accounts and estimation made by the Private valuer called by the department. However, Ld Assessing Officer summarily rejected the submissions without assigning any valid reason and went ahead with the erroneous valuation made by the Valuer. As the Ld CIT(A) has allowed relief to the assessee on other grounds, Ld CIT(A) did not consider the submissions made on the merits of the disputed valuation.

Written Submissions on the grounds of cross objections of the respondent-

Submissions in respect of CO ground No 1- As submitted in respect of grounds of appeal filed by the department the appeal filed by the department is not at all maintainable for the very reason that the appellant revenue failed to find any reasons to challenge the decision of the Ld CIT(A) of holding reference to the private valuer as without any authority of law and consequently the valuation report relied upon by Ld AO being rendered absolutely illegal without going into the details of the report. Since the decision of the Ld CIT (A) has been accepted by the department, the department cannot challenge the decision of the Ld CIT (A) citing the very same illegal report. The decision of Ld CIT (A) needs to be upheld for this very reason alone.

Submissions in respect of CO ground No 2; The revenue has agitated the decision of the Ld CIT(A) in ground no 2 of the appeal claiming “settled position of law” which is absolutely misdirected and misleading

23 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited and absolutely perverse. It is submitted that the appellant revenue be asked to file the decisions of the Hon’ble Supreme Court which are directly on the issue, or the decision of the jurisdictional high court directly on the issue which have not been further challenged in appeal before the Supreme Court or the statutory provisions mandating making of additions on the basis of report of the private valuer obtained by the department, or even providing for making reference to a private valuer for ascertaining the value of investment.

In the circumstances, it is requested that it may please be held that the settled legal position stands to the contrary only, i.e. no tax authorities are allowed to exceed their authority, cannot trample the statutory provisions of the Income Tax Act with such impunity and cannot exercise authority in the indiscreet and arbitrary manner in which the authorities acted in the present case.

Submissions in respect of Co Ground No 3-

In this case addition has been made by the Ld Assessing Officer merely on the basis of illegal report of the Private valuer from whom a report was allegedly obtained by the DDIT during the course of search proceedings in an illegal manner. The report of private valuer could at best serve as information to the Ld Assessing Officer and in case he was satisfied with the report of the private valuer, the Ld Assessing Officer should have invoked the provisions of section 142A of the Income Tax Act which duly empower him to obtain a report from the Departmental Valuation Officer. Departmental Valuation officer acts according to the specified procedures and his report is valid in the eyes of the law. However, the Ld Assessing Officer was not inclined to follow the due procedure of law. Either he was not satisfied with the report of the Private Valuer and considered it not prudent to refer to the Departmental Valuer as nothing incriminating would have come against the assessee in just, proper an legal valuation, and was simply hell bent upon in making the addition or the Ld Assessing Officer lacked awareness of the statutory provisions. In either case, the approving authority would have never approved the assessment order had it applied its mind to the assessment order. Therefore, it is evident that the approval accorded by the Additional CIT Range Udaipur was absolutely mechanical and without application of mind. It is a trite law settled by the Hon’ble Apex Court that approval granted without application of mind is not an approval at all in the eyes of law.

The assessment orders passed by the LD Assessing Officer need to be quashed for this very reason also.

Further, the approval granted by the Addl CIT Range Udaipur sans mandatory requirement of quoting DIN on the approval is not a valid approval and the assessment order passed without mandatory approval need to be quashed on this ground too.

24 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited It is a trite law settled by the Hon’ble Apex Court that approval granted without application of mind is not an approval at all in the eyes of law. In this regard reference can only be made to the decision of Hon’ble Orissa High Court in the case of ACIT, Circle-1(2), Bhubaneswar Vs M/s. Serajuddin & Co. Kolkata (IT Appeal No. 0019/00-01) passed by the division bench of Hon’ble Chief Justice S. Muralidhar and Hon’ble Justice M.S. Raman. SLP filed by the revenue against the decision has since been dismissed by Hon’ble Apex Court.

Hon’ble ITAT Delhi in the decision dated 13.12.2023 in the case of Finesse International Design Pvt. Ltd. V/s DCIT in held that approval accorded by Additional CIT Range sans DIN is a nullity.

Submissions in respect of CO ground No 4. Most humbly it is submitted that it is evident that the present appeal by Revenue is a classic case of abuse of judicial process ,resulting not only into waste of precious time of the Hon’ble Bench but also in continued harassment of the assessee by perpetuating the acts of administrative malfeasance and in malicious prosecution against the assessee. It is submitted that summoning a private valuer in complete abrogation of statutory provisions by the DDIT during the course of search can only be with a malafide intent. Preparation of alleged valuation report by the private valuer in a very hurried manner gives credence to the manifest malafide intent of the Investigating Officer/authorised Officer. It is needless to say that the action of referring to private valuer by officer was with the intent to pressurize/blackmail the appellant for extracting surrender. Except malafide intent, there cannot be any other reason for trampling the statutory mandate by the Investigation Officer. Income Tax Act contains specific provisions for quantification of investment made in a property. No adhoc and arbitrary approach on the whims and fancies of the authorised officer can be justified in any manner. Under the provisions of Section 142A, principles of natural justice are duly ingrained as it provides for report to be submitted by the Valuation Officer in Sixty days. In the present case, as noted by the Ld CIT (A), search was commenced on 13th Feb and alleged valuation report by the Private valuer was submitted on 14th February. The most hurried manner in which the alleged report was obtained is a clear pointer to the state of affairs during the course of search proceedings. Be that as it may, the Assessing Officer is not bound to follow the illegal acts of the Investigation Officers. As held by the Ld CIT (A), the Assessing Officer had not made any reference to the Valuation cell though fully empowered to do so under the statutory provisions of Section 142A of the Act. There were no extra ordinary circumstances before the Ld Assessing Officer for transgressing the provisions of section 142A of the Income Tax Act as in case reference is made to the valuation cell, additional time is provided for completing the 25 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited assessment. Not choosing to follow the just course of action clearly shows that the report of the Private valuer was not only illegal but manifestly erroneous. Had there been any substance in the report, Ld Assessing Officer would have attempted to supplant the same by a statutory report from the Departmental Valuation Officer under section 142A of the Act. However, the Ld Assessing Officer despite being satisfied that the said report was a complete farce and fraud on the due procedure of law, choose to make addition, only to harass the assessee. The acts of administrative malfeasance and illegal exercise of powers by the lower authorities have been set right by the Ld CIT (A) in a very well reasoned and judicious order. However, despite not being able to agitate the decision of the Ld CIT (A) on the illegal reference to Private Valuer resulting into illegal valuation report, the department choose to prolong the harassment of the assessee by filing this vague and unmerited appeal in a very clumsy manner. In the circumstances, it is prayed that the present appeal demands exemplary costs to be levied on the Department. ”

10. In addition to the above written submission field earlier on 02/01/2024, the ld. AR appearing on behalf of the assessee also submitted rejoinder and the same is also reproduced here in below:

Rejoinder of the Respondent During the course of hearings, the Ld DR relied upon the decision of the Hon’ble Apex Court in the case of Dhakeswari Cotton Mills Ltd vs Commissioner Of Income Tax, 1955 AIR 65. However, it is submitted that the reliance placed upon the decision of the Hon’ble Apex Court is totally misplaced, out of context and inapplicable to the facts and issues involved in the present appeals. A. In its decision the Hon’ble Apex Court has observed as under; “ As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a Court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore

26 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax, Punjab (Supra).” The Hon’ble Supreme Court further added : “In this case we are of the opinion that the Tribunal violated certain fundamental rules of justice in reaching its conclusions. Firstly, it did not disclose to the assessee what information had been supplied to it by the departmental representative. Next, it did not give any opportunity to the company to rebut the material furnished to it by him, and, lastly, it declined to take all the material that the assessee wanted to produce in support of its case. The result is that the assessee had not had a fair hearing. The estimate of the gross rate of profit on sales, both by the Income-tax Officer and the Tribunal seems to be based on surmises, suspicions and conjectures. It is somewhat surprising that the Tribunal took from the representative of the department a statement of gross profit rates of other cotton mills without showing that statement to the assessee and without giving him an opportunity to show that statement had no relevancy whatsoever to the case of the mill in question. It is not known whether the mills which had disclosed these rates were situate in Bengal or elsewhere, and whether these mills were similarly situated and circumstances. Not only did the Tribunal not show the information given by the representative of the department to the appellant, but it refused even to look at the trunk load of books and papers which Mr. Banerjee produced before the Accountant-Member in his chamber. No harm would have been done if after notice to the department the trunk had been opened and some time devoted to see what it contained. The assessment in this case and in the connected appeal, we are told, was above the figure of Rs. 55 lakhs and it was meet and proper when dealing with a matter of this magnitude not to employ not reported, unnecessary haste and show impatience, particularly when it was known to the department that the books of the assessee were in the custody of, the Sub-Divisional Officer, Narayanganj. We think that both the Income-tax Officer and the Tribunal in estimating the gross profit rate on sales did not act on any material but acted on pure guess and suspicion. It is thus a fit case for the exercise of our power under article 136” The above observations of the Hon’ble Supreme court fully supports the contention of the assessee. Though Dhakeshwari Cotton Mills case relate to estimation of profits after rejection of Books of accounts, which is not a case here. Here Books of accounts maintained by the assessee have not been rejected but estimation of investment in factory Building has been made dehors the statutory provisions. Hon’ble Supreme court clearly criticized the unnecessary haste and impatience exhibited by lower authorities which is clearly visible in the present case too. The Assessing Officer has been duly empowered by the statute to make reference to the DVO u/s 142A and requirement of natural justice are duly ingrained under those provisions where, DVO has to provide opportunity to the tax payer ( sub section 4 of Section 142) and complete the valuation in Six months ( sub section 6 of 27 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited Section 142A). Further time taken by the DVO is excluded for the purpose of computing the limitation period u/s 153 of the Income Tax Act. In the present case, during the curse of survey proceedings, the private valuer was called by the Authorised Officer and a very hasty, hurried and illegal report was taken from him and the same has been made basis of addition by the Ld Assessing Officer without considering the objections of the assessee or referring valuation to the DVO. Thus, observations of the Hon’ble Supreme Court supports the assessee’s case only. Evidently , the extremely arbitrary and illegal action of the Assessing Officer and the Investigation Officer are contrary to the legal position settled by the Hon’ble Apex Court in Dhakeswari case ,which clearly supports the grounds of the assessee only. B. Without prejudice it is also submitted that Hon’ble Apex Court in the case of Commissioner Of Income-Tax vs M/S. Sun Engineering Works (P.) Ltd (1992) 198 ITR 297(SC) observed as under : “It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings” Applying the above ratio laid down by the Hon’ble Supreme Court, the observations in Dhakeswari Cotton Mills relied upon by the Ld DR are not at all applicable to the present case . As stated earlier that case was related to estimation of profits after rejection of Books of Accounts. After rejection of Books Assessing Officer is duly empowered to make Best judgement assessment, however, in the present case no such powers were invoked by the Assessing Officer and no best judgement assessment was made. Moreover, observations of the Hon’ble Supreme court in that case too, supports only the case of the assessee as the DDIT Investigation and the Assessing Officer have both not only acted illegally but with undue haste and impatience. C. Without prejudice it is also submitted that though there are general powers with the Assessing Officer to conduct enquiry u/s 143(2) of the Income Tax Act , however for the purpose of estimation of valuation of the investment in property, the Statute specifically provides for reference to DVO u/s 142A in case the Assessing Officer is not satisfied with the value recorded in the Books of accounts. When the statute has categorically provided u/s 142A making reference to the 28 & 648/JP/2023 & CO Nos. 8 & 9/JP/2023 DCIT vs. Vijay Granimarmo Private Limited DVO, general powers of conducting enquiry u/s 143(2) of the Income Tax Act cannot be applied to a case covered by the provisions of section 142A of the Income Tax Act. It is settled law that the general provision, only, controls cases where the special provision does not apply as the special provision is given effect to the extent of its scope.

Hon’ble Supreme Court in the case of CIT v. Shahzada Nand & Sons [1966] 60 ITR 392 (SC) observed as under: “Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non derogant, which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at P. 205, thus "The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply."

Hon’ble Madras High Court in the case of Commissioner Of Income- Tax vs Copes Vulcan Inc 1987, 167 ITR 884 Mad has categorically held that when there are specific provisions for taxation, general provisions will not apply. Therefore, even if it is accepted that private enquiry by the Assessing Officer is not outside the scope of general powers of enquiry, in the present case specific provisions of section 142A shall only apply. Since no recourse has been taken to the provisions of section 142A of the Income Tax Act, addition made by the Ld Assessing Officer is absolutely illegal and has rightly been deleted by the Ld CIT (A).

Thus, the estimation is seems to be merely a estimation. Thus, the contention of the assessee that the valuer has not got or obtained any explanation or information from the assessee company and there is also a clear violation granting an opportunity by the valuer before making an estimate of the property. The bench noted that the law in this regard is governed by the provision of section 55A or section 142A of the Act and there is no reference of such action and the related formalities found to have been discussed in the assessment order. As the ld. AO did not bring anything that what are the material which suggests that they are incriminating in nature suggest the valuation of property is not correctly reflected in the books of accounts of the assessee. Even the books of accounts were seized and there is no discussion that what is the defects in action of the ld. AO is nothing but a huger mugger while making a reference at the time of search and till the completion of the assessment nothing is discussed in the assessment order and no enquiry whatsoever made after the receipt of the valuation report.

The reference to private valuer was made by the DDIT during the search. No fresh reference was made to the valuation officer u/s. 142A or section 55A of the Act and that too without challenging the book results or based any incriminating material found. Merely the DDIT based on the physical look of the assets requested the registered ( private ) valuer to submit the valuation and the same was submitted on the another date of search without consulting the assessee and comparing the book result of the assessee and thereafter ld. AO has not referred anything of the material or not rejected the books and adopted the valuation report compared it with the books and made the addition which has been detailed discussed by the ld. CIT(A). The bench further noted that the provision of section 55A has provided the circumstances in which and the purposes for which a reference could be made by the tax authorities to a Valuation Officer for valuation of capital asset.

Before getting into detailed provisions in this regard, it is important to understand basic provisions relating to nature of Valuer. There Valuation Officer. Registered Valuer and valuation officer both perform the same task but registered Valuer work in private capacity and can be termed as Private Valuer. Registered Valuer i.e. Private Valuer work in private capacity under a license issued by the Board. Valuation done by the Private Valuer is not binding on the tax authorities. Valuation officer can be termed as Departmental Valuer. They are recognised by the Income-tax Department and are authorized valuer of Income-tax Department.

Departmental valuer i.e. valuation officers are the valuation officer approved/ authorised by the Income-tax Department. The tax authorities will take the recourse of the value estimated by these valuers. In other words, if the tax authorities need to ascertain the value of an asset, then they will request the valuation officer to ascertain the value of the capital asset and the value determined by them will be taken into consideration by the tax authorities.

Circumstances in which reference can be made to valuation officer After understanding the difference between private valuer and valuation officer i.e.departmental valuer, now we shall understand the circumstances in which the Assessing Officer can make a reference to the valuation officer. As per section 55A, with a view to ascertaining the fair market value of a capital asset, the Assessing Officer. The circumstances in which reference can be made by the Assessing Officer to the valuation officer will be broadly classified as follows: (1) A case in which the value of the asset as claimed by the taxpayer is in accordance with the estimate made by a registered valuer. In other words, this will be a case in which, the taxpayer has obtained a valuation report of a registered valuer i.e. a private valuer. Such a report is generally obtained by the taxpayer to support the value of the capital asset claimed by him. If the case is covered under (1) above i.e. a case where the value of the asset as claimed by the taxpayer is in accordance with the estimate made by a registered valuer (i.e. private valuer), then the Assessing Officer can make a reference to the valuation officer (i.e. departmental valuer) if the Assessing Officer is of the opinion that the value of the asset as claimed by the taxpayer is at variance with its fair market value. In other words, in such a case there is no quantum of variation to be established to make a reference to the valuation officer. The only requirement is that the Assessing Officer should be of the opinion that the value of the asset claimed by the taxpayer and the fair market value of the asset are in variation i.e. both the values differ. The variation i.e. the difference could be of any amount. (2) A case other than above If the case is not covered reference to the valuation officer if he is of the opinion: (i) that the fair market value of the asset exceeds the value of the asset as claimed by the taxpayer or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. When any reference is made by the Assessing Officer to the valuation officer under section 55A, then the provisions of following sections of Wealth-tax Act, 1957, shall apply with the necessary modifications: • Provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A of the Wealth-tax Act, 1957. Section 16A of Wealth- tax Act, 1957, is similar to section 55A of Income-tax Act. Section 16A of Wealth-tax Act, 1957, contains the provisions relating to making a reference to the valuation officer for making assessment under the Wealth-tax Act. Apart from the provisions of section 55A, section 142A also empowers the Tax Authorities to make a reference to a Valuation Officer. The provisions of section 142A empowers the Assessing Officer for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment. "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957. The Assessing Officer may make a reference to the Valuation Officer as above whether or the accounts of the taxpayer. The Valuation Officer, on a reference made by the Assessing Officer, shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section 38A of the Wealth-tax Act, 1957. The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the taxpayer may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the taxpayer. The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment. The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the taxpayer an opportunity of being heard, take into account such report in making the assessment or re-assessment. But here we note that the addition has been made by the ld. AO without any supporting evidence or material found during the search operation and the addition was made only based on the private ( registered ) valuer for which the reference was made by the DDIT at the time of search and that report was obtained on the very next date of search. The ld. CIT(A) has considered the judgement of the CIT Vs. Nishi Mehra 56 taxmann.com 80 where in it was held that no addition can be made only on the basis of valuation report in the material to point out the under valuation of the property. The ld. DR did not bring any contrary judgment except relying the judgment of the Dhakeswari Cotton Mills Ltd. Vs. CIT for which the ld. AR has filed a distinguishing note submitting that that decision is pari materia on difference facts. In the light of the discussion so recorded we see no merits in the arguments raised by the revenue considering the facts & circumstances discussed here in above the ground no. 1 & 2 challenging the addition of Rs. 1,39,76,229/- stands dismissed. Ground no. 3 being general does not require any adjudication.

In the result of the appeal of the revenue in ITA No.

647/JP/2023 stands dismissed. no. 8/JP/2023. The first objection of the assessee is that the revenue has erred in filling the appeal without any authority of the law as they have accepted the finding of the ld. CIT(A) in not challenging finding that the reference was invalid and ground no. 2 that the revenue has without referring the basis accepted the valuation based addition is incorrect. Since we have accepted that allowed. Since we have decided the issue on merits the technical objection taken in objection no. 3 & 4 are educative in nature and therefore, the same is not decided.

Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in & CO No. 08/JP/2023 for the Assessment Year 2019-20 shall apply mutatis mutandis in ITA No. 648/JPR/2022 & CO No. 09/JP/2023 and in the result of the appeal of the revenue in ITA No. 648/JPR/2022 stands dismissed & CO No. 09/JP/2023 stands allowed.

In the result, the appeals of the revenue stands dismissed and the cross objection of the assessee are allowed.

Order pronounced in the open Court on 18/01/2024 Sd/- Sd/- ¼ jkBkSM deys’k t;arHkkbZ ½ ¼ lanhi xkslkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 18/01/2024 *Ganesh Kr, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- DCIT, Central Circle, Ajmer 2. izR;FkhZ@ The Respondent- Vijay Granimarmo Private Ltd., Ajmer 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File { & 648/JP/2023 & CO Nos. 08 & 6. 09/JP/2023 } vkns'kkuqlkj@ By order सहायक पंजीकार@Aेेज. त्महपेजतंत