Decided on April 15,2014

Vijaykumar D. Gupta Respondents


- (1.) These appeals arise out of a common judgment of the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") dated August 23, 2013, for the assessment year 2005-06. Though the dispute is common since they were cross-appeals before the Tribunal, that the assessee's appeal having been allowed and that of the Revenue's having been rejected, the Revenue has preferred these two separate appeals. The sole question raised by the Revenue for our consideration is as under: Whether the Appellate Tribunal has substantially erred in law in deleting the addition of Rs. 10,77,724 made under section 69B being the unexplained investment in house property ?
(2.) From the record it emerges that the Assessing Officer after making a reference to the DVO for ascertaining the assessee's investment in the house property on the basis of such report added a sum of Rs. 10,77,724 under section 69B of the Act being assessee's unexplained investment.
(3.) The assesses carried the matter in appeal. The Commissioner of Income-tax (Appeals) on facts analysed the case of the assessee again and retained part of the addition but granted partial relief. This order of the Commissioner of Income-tax (Appeals) gave rise to two appeals to the Tribunal. The Tribunal deleted entire addition primarily on the ground that the Assessing Officer could not have made reference to the DVO without reference to the books of account and such reliance on the DVO's books of account was not justified. The Tribunal held and observed as under: 12.1 Admitted factual position is that the Assessing Officer had not referred any incriminating evidence which was found during the course of search. Although the Revenue Department had found the existence of a building but there was no evidence that the assessee had in fact incurred expenditure on construction of the said property over and above the amount already declared in the books of account. This is not an assessment which was made in the ordinary course of proceedings but admittedly a search under section 132 was carried, therefore, it is expected that the addition consequent thereupon should be corroborated with evidence detected at the time of search, As far as the books of account of the assessee and the recording of the investment in the construction of the house were concerned, the Assessing Officer had not found any discrepancy. For this legal proposition, a decision of the jurisdictional High Court pronounced in the case of Goodluck Automobiles, 2013 359 ITR 306 has been cited wherein the court has held that unless the books of account are rejected the Assessing Officer cannot make a reference to the Valuation Officer, An another case law relied upon was Sargam Cinema,2010 328 ITR 513, Our attention has again been drawn on few case law which was referred before the learned Commissioner of Income-tax (Appeals), viz., Bajranglal Bansal, 241 ITR 64 (Delhi), Ushakant N. Patel v. CIT, 2006 282 ITR 553. In the light of these case law and considering the totality of the facts and circumstances of the case, we are of the considered opinion that the learned Commissioner of Income-tax (Appeals) has not considered the fundamental questions as pointed out by the assessee that there was no material, what to say an incriminating material, in the possession of the Revenue Department, therefore, the entire addition being merely based upon the estimation of the DVO was baseless; hence, deserves to be deleted. We hold accordingly. The part addition sustained by the learned Commissioner of Income-tax (Appeals) is hereby deleted.;

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