Sh. Devinder Singh Vohra, Patiala V. ITO, W-4, Patiala

ITA 1603/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7084 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 26-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: K P BAJAJ
• Keywords: Unexplained investment; Valuation report; Set aside
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1603/CHD/2018 / ASSESSMENT YEAR : 2009-10 SHRI DEVINDER SINGH VOHRA, C/O CORNER HOTEL, NEAR BUS STAND, PATIALA VS. THE ITO, WARD-4, PATIALA ./PAN NO: AAJPV1687K / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI K.P.BAJAJ, ADVOCATE ' ! / REVENUE BY : SH. MANJIT SINGH, CIT DR # $ % /DATE OF HEARING : 22.07.2019 &'() % / DATE OF PRONOUNCEMENT : 22.07. 2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 22.10.2018 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PATIALA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING T HE VALIDITY OF THE NOTICE U/S 148. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN HOLDING TH AT REPORT OF DEPARTMENTAL VALUATION OFFICER IS APPLICABLE IN MATTERS OF DETERMINATION OF MARKET VALUE OF THE PROPERTY U/ S 50 OF THE INCOME TAX ACT IN DIS-REGARD TO THE SALE INSTAN CES. ITA NO. 1603-CHD-2018- SHRI DEVINDER SINGH VOHRA, PATIALA 2 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN UP-HOLDING THE ADDITION OF RS. 9,34,000/- 3. THE SOLE ISSUE RAISED BY THE ASSESSEE THROUGH T HE GROUNDS OF APPEAL IS AGAINST THE ADDITION MADE BY THE LOWER AU THORITIES OF RS. 9.34 LACS ON ACCOUNT OF DIFFERENCE BETWEEN THE REGISTER ED SALE DEED PRICE AND THE VALUE OF THE PROPERTY AS PER REPORT OF THE DEPA RTMENTAL VALUATION OFFICER. 4. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS REOPENED BY THE ASSESSING OFFICER ON THE GROUND THAT A SURVEY A CTION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE AND DURING THE SURV EY ACTION IT WAS FOUND THAT THE ASSESSEE HAD SOLD CERTAIN PROPERTIES FOR A TOTAL CONSIDERATION OF RS. 35 LACS. HOWEVER, IN THE RETURN OF INCOME, THE ASSESSEE HAD SHOWN SALE CONSIDERATION AT RS. 9,36,265/- ONLY. THE ASSE SSING OFFICER, THEREFORE, NOTED THAT THE SALE CONSIDERATION HAS BE EN SHOWN LESS BY THE ASSESSEE AT RS. 25,63,735/-. HE, THEREFORE, OBSERVE D THAT THE ASSESSEE HAD UNDERSTATED THE VALUE OF THE LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER FURTHER NOTED THAT AS PER THE INF ORMATION AVAILABLE ON RECORD, THE ASSESSEE HAD PURCHASED A PROPERTY BEARI NG NO. 146, PUNJABI BAGH, PATIALA FOR A SUM OF RS. 45 LACS AND FURTHER A SUM OF RS. 3,37,500/- WAS INCURRED AS REGISTRATION EXPENSES, T HUS, THE TOTAL INVESTMENT IN THE PURCHASE OF THE SAID PROPERTY WA S MADE AT RS. 48,37,500/-, WHEREAS, THE ASSESSEE HAD SHOWN THE C ONSIDERATION AT RS. ITA NO. 1603-CHD-2018- SHRI DEVINDER SINGH VOHRA, PATIALA 3 35 LACS. HE, THEREFORE, OBSERVED THAT THE ASSESSEE HAD MADE UNEXPLAINED INVESTMENT OF RS. 13,37,500/-. HE, THEREFORE, RE OPENED THE ASSESSMENT. IN THE REOPENED ASSESSMENT PROCEEDINGS, THE ASSES SEE EXPLAINED THAT THE ASSESSEE HAD NOT SOLD THE PROPERTY AT RS. 35 LACS, AS ALLEGED BY THE ASSESSING OFFICER, WHEREAS, THE TOTAL SALE CON SIDERATION RECEIVED BY THE ASSESSEE WAS AT RS. 9,36,265/- WHEREUPON A DEDU CTION U/S 54 OF THE ACT WAS CLAIMED AS PER LAW. THAT THEREAFTER THE ASS ESSEE ALONG WITH HIS WIFE HAD PURCHASED HOUSE NO. 146, PUNJABI BAGH, PAT IALA, WHEREIN, THE ASSESSEE HAD ONLY 50% SHARE. THAT THE TOTAL PURCHAS E CONSIDERATION OF THE SAID HOUSE WAS AT RS. 45 LACS, OUT OF WHICH TH E ASSESSEES SHARE OF INVESTMENT IN THE SAID HOUSE WAS AT RS. 22.50 LACS THE ASSESSING OFFICER, HOWEVER, WAS OF THE VIEW THAT THE ASSESSE E HAD SHOWN THE PURCHASED PRICE AT A LOWER SIDE. HE, ACCORDINGLY RE FERRED THE MATTER TO THE VALUATION OFFICER WHO ESTIMATED THE VALUE OF TH E PROPERTY AT RS. 63,68,000/- CALCULATING ASSESSEES 50% SHARE IN TH E SAID INVESTMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D SHOWN A LESS PURCHASE CONSIDERATION OF RS. 9.34 LACS, WHICH THE ASSESSING OFFICER CONSIDERED AS OUT OF UNEXPLAINED INCOME OF THE ASSE SSEE. HE, ACCORDINGLY MADE THE IMPUGNED ADDITION. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E ALSO GIVEN THROUGH THE RECORD. A PERUSAL OF THE REASONS RECOR DED BY THE ASSESSING ITA NO. 1603-CHD-2018- SHRI DEVINDER SINGH VOHRA, PATIALA 4 OFFICER REVEAL THAT THE ASSESSING OFFICER NOTED TH AT DURING THE SURVEY ACTION IT WAS FOUND THAT THE ASSESSEE HAD SOLD HIS TWO PROPERTIES AT RS. 35 LACS, WHEREAS, THE ASSESSEE HAD SHOWN THE SALE CONSIDERATION IN THE SALE DEED AT A TOTAL AMOUNT OF RS. 9,36,265/-. HOW EVER, A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFF ICER HAS NOT TOUCHED THIS POINT. WHAT WAS THE INFORMATION AVAILABLE TO THE ASSESSING OFFICER THAT THE PROPERTY OF THE ASSESSEE WAS SOLD AT RS. 3 5 LACS HAS NOT BEEN BROUGHT BEFORE US. EVEN THE ASSESSING OFFICER HAS NOT DISCUSSED THIS ISSUE AT ALL IN THE ASSESSMENT ORDER AND NO EVIDEN CE HAS BEEN POINTED OUT EITHER IN THE ASSESSMENT ORDER OR IN THE APPEL LATE ORDER OF THE CIT(A) IN THIS RESPECT. EVEN NO ADDITIONS HAVE BEEN MADE ON THIS ISSUE. IT SEEMS THAT THE LOWER AUTHORITIES JUST ASSUMED TH AT THE PROPERTY WAS SOLD AT RS. 35 LACS AS NO EVIDENCES HAVE BEEN BROUG HT TO OUR KNOWLEDGE WHICH WERE AVAILABLE TO THE ASSESSING OFFICER TO FO RM THIS BELIEF. EVEN THERE IS NO WHISPER OF SOURCE OF ANY INFORMATION IN THIS RESPECT ON THE BASIS OF WHICH THE ASSESSING OFFICER FORMED AN OPI NION THAT THE VALUE OF THE PROPERTY / HOUSE PURCHASED BY THE ASSESSEE A LONG WITH HIS WIFE WAS HIGHER THAN THAT WAS SHOWN IN THE SALE DEED. TH E ASSESSMENT WAS REOPENED ON THIS ISSUE ONLY ON ASSUMPTION BASIS AS THERE WAS NO REASON FOR THE ASSESSING OFFICER TO FORM THIS BELIEF IN TH E ABSENCE OF ANY EVIDENCE ON THE FILE. THE SOLE REASON FOR MAKING T HE ADDITION ON THIS ISSUE IS THE REPORT OF THE VALUATION OFFICER WHICH WAS OBTAINED BY THE ASSESSING OFFICER AFTER REOPENING OF THE ASSESSMENT . HOWEVER, BEFORE THE REOPENING OF THE ASSESSMENT, THERE WAS NO INFOR MATION AVAILABLE TO ITA NO. 1603-CHD-2018- SHRI DEVINDER SINGH VOHRA, PATIALA 5 THE ASSESSING OFFICER TO FORM THE BELIEF THAT THE A SSESSEE HAS PURCHASED THE HOUSE AT HIGHER PRICE INVOLVING HIS UNEXPLAINED INVESTMENTS. EVEN A PERUSAL OF THE VALUATION REPORT ALSO REVEALS THAT T HE SAME IS CRYPTIC. THE VALUATION OFFICER HAS NOT MENTIONED THE INSTANCES O R THE REASONS ON THE BASIS OF WHICH HE FORMED THE BELIEF THAT THE VALUAT ION OF THE PROPERTY WAS HIGHER THAN THAT WAS MENTIONED IN THE SALE DEED . THOUGH, IT HAS BEEN MENTIONED IN THE VALUATION REPORT THAT THE VAL UATION OFFICER HAS TAKEN NOTE OF THE SALE DEED / DATA PROVIDED BY THE SUB-REGISTRAR, BUT THERE IS NO MENTION IN THE REPORT AS TO WHAT WERE T HE INSTANCES OF OTHER SIMILAR SITUATED PROPERTIES THAT WERE SOLD AT HIGHE R RATE. THE REPORT OF THE VALUATION OFFICER ALSO SEEMS TO BE BASED ON CON JECTURE AND SURMISES. IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSEE SUC CEEDED ON BOTH THE COUNTS I.E. ON THE LEGAL GROUND OF VALIDITY OF THE REOPENING OF THE ASSESSMENT AS WELL AS ON MERITS. THE IMPUGNED ADD ITION MADE BY THE LOWER AUTHORITIES IS, THEREFORE, SET ASIDE AND THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 22. 07.2019 .. ITA NO. 1603-CHD-2018- SHRI DEVINDER SINGH VOHRA, PATIALA 6 '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR