ITO, New Delhi V. Smt. Renu Khandelwal, New Delhi

ITA 2106/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81710 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 28-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report; Onus to prove
• Section: 50C; 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER & SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO. 2106/DEL/2011 ASSESSMENT YEAR: 2002-03 ITO, VS. RENU KHANDELWAL, WARD 25(4), F-127, SULTANPURI, 304-D, 3 RD FLOOR, VIKAS BHAWAN, NEW DELHI. NEW DELHI. AHCPK7373D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ KUMAR CHOPRA, SR. DR RESPONDENT BY : SH. KAPIL GOEL, ADV. ORDER PER DIVA SINGH, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER DATED 09/12/2010 OF CIT(A)-XXII, NEW DELHI PERTAINING TO 2002-03 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 46,00,000/- O N THE GROUND THE AO WAS UNABLE TO PROVE THAT THERE WAS AN UNDERSTATEMEN T OR CONCEALMENT OF COST INVOLVED IN THE CONSTRUCTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE VALUATION DECLARED BY THE AS SESSEE EVEN THOUGH IT WAS NOT SUPPORTED BY ANY VALUATION REPORT OF AN AUT HORIZED VALUER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT TAKING INTO COGNIZANCE THE FACTS THAT THERE WAS DIFFERENCE OF COST OF PRICE OF THE PROPERTY PURCHASED DECLARED BY THE ASSESSEE AND HER HUSBAND DURING THE COURSE OF ASSESSMENT PROCEED INGS. 4. THE APPELLANT CRAVES THE RIGHT TO AMEND/ADD ANY OTH ER GROUND OF APPEAL. ITA NO. 2106/2011 RENU KHANDELWAL 2 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASS ESSEE WHO IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MAKING OF JEW ELLERY ON JOB WORK BASIS FILED HER RETURN OF INCOME AT AN INCOME OF RS . 1,13,633/- FOR THE A.Y. 2002-03. A TAX EVASION PETITION (TEP) WAS RECEIVED FROM THE ITO (INV.)- II(3), DATED 24.03.2009 STATING THAT THE ASSESSEE H AD PURCHASED ON 03.09.2001, A PLOT OF LAND BEARING NO. B-32, PUNJAB I BASTI, NAGLOI, DELHI MEASURING 152 SQ. YARDS, FROM SH. SURESH KALRA FOR RS. 26 LACS, AND RECONSTRUCTED A THREE-STORIED BUILDING ON IT COSTIN G RS. 20 LACS. THE AO, AFTER RECORDING THE REASONS, INITIATED PROCEEDINGS U/S 147 AND ISSUED NOTICE U/S 148 OF THE I.T. ACT, 1961 ON 27.03.2009 WHICH WAS DULY SERVED UPON THE ASSESSEE. DURING THE COURSE OF PROCEEDING S, THE ASSESSEE SUBMITTED THAT SHE HAD PURCHASED THE SAID PROPERTY FOR RS. 95,000/- IN CASH FROM SH. DESH RAJ AND SURESH KUMAR ON 05.09.20 01. IN SUPPORT OF HER CLAIM COPY OF GENERAL POWER OF ATTORNEY WAS FIL ED. TAKING NOTE OF THE FACT THAT THE HUSBAND OF THE ASSESSEE STATED THAT T HE PROPERTY WAS PURCHASED FOR RS. 1,22,000/- THE AO DOUBTED THE COR RECTNESS OF THE COST OF ACQUISITION OF THE PROPERTY. ACCORDINGLY AN INS PECTOR OF INCOME TAX WAS ASKED TO CONDUCT AN ENQUIRY WHO REPORTEDLY CONF IRMED THE CONTENTS OF THE TEP. TAKING COGNIZANCE OF THE TEP RECEIVED FROM THE ITO (INVESTIGATION), THE REPORT OF THE ITI AND THE FACT THAT THE ASSESSEE DID NOT FURNISH ANY VALUATION REPORT, THE AO HELD THAT THE COST OF THE PROPERTY PURCHASED BY THE ASSESSEE WAS RS. 26 LACS, AND ADDE D THE SAME U/S 69 ITA NO. 2106/2011 RENU KHANDELWAL 3 TO THE INCOME OF THE ASSESSEE HOLDING THAT THE INVE STMENT WAS MADE BY THE ASSESSEE FROM UNDISCLOSED SOURCES. THE AO FURTH ER RELYING ON THE COMPLAINT RECEIVED AND THE REPORT OF THE INSPECTOR HELD THAT THE COST OF CONSTRUCTION WAS RS. 20 LACS, HOLDING THAT THIS INV ESTMENT WAS FROM UNDISCLOSED SOURCES AND ALSO ADDED THE SAME U/S 69 OF THE ACT. APART FROM THIS BASED ON TEP AND REPORT OF THE ITI ANOTHE R ADDITION WAS MADE BY THE AO WHICH ALSO HAS BEEN DELETED BY THE CIT(A) INCLUDING THE ADDITIONS UNDER CHALLENGE. HOWEVER, THE REVENUE HA S NOT CHALLENGED THE DELETION OF THE RENTAL INCOME AND IS BEFORE US ONLY ON THEDELETION OF ADDITION OF RS. 46,00,000/-. FOR THE RECORD THE JU RISDICTIONAL ISSUE WHEN CARRIED IN THE APPEAL BEFORE THE CIT(A) WAS DECIDED AGAINST THE ASSESSEE AND AS OBSERVED ON MERITS RELIEF WAS GRANTED TO THE ASSESSEE ON THE ADDITIONS MADE. AGAINST WHICH THE REVENUE IS IN AP PEAL BEFORE US ON THE ABOVE MENTIONED GROUNDS. 3. THE LD. SR. DR RELYING UPON THE ASSESSMENT ORDER SUBMITTED THAT THE ASSESSEES HUSBAND HAS STATED THAT THE SPECIFIC PROPERTY WAS PURCHASED FOR A CONSIDERATION OF RS. 1,22,000/- INS TEAD OF RS. 95,000/- AS CLAIMED BY THE ASSESSEE AND ON ACCOUNT OF THIS DIFF ERENCE IN THE STATEMENT OF THE HUSBAND AND THE WIFE BASED ON THE IT INSPECTORS REPORT THE ADDITION HAS BEEN MADE. HEAVY RELIANCE WAS PLA CED UPON THE FOLLOWING FINDINGS WHICH ARE REPRODUCED HEREUNDER F ROM THE ASSESSMENT ORDER ITSELF: ITA NO. 2106/2011 RENU KHANDELWAL 4 VIDE LETTER DATED 21/10/2009, THE ASSESSEE HAS STA TED THAT SHE HAS PURCHASED PROPERTY BEARING NO. B-32, PUNJABI BASTI, NANGLOI, DELHI FOR RS. 95,000/- IN CASH FROM SH. DESH RAJ AND SURESH K UMAR ON 05/09/2001 AND HAS ALSO FILED THE COPY OF GENERAL P OWER OF ATTORNEY IN SUPPORT OF HER CLAIM FOR THE OWNERSHIP OF SAID PROP ERTY. HOWEVER, AS PER THE STATEMENT ON OATH RECORDED BY THE AUTHORITY OF THE DIRECTORATE OF INVESTIGATION, AS STATED IN THE ABOVE TAX EVASIO N REPORT, VIDE LETTER NO. 33 DATED, 20/03/2009 OF THE ITO(INV.), U-II(3), NEW DELHI, THE HUSBAND OF THE ASSESSEE HAS STATED A PLOT OF LAND BEARING NO. B-32 PUNJABI BASTI, NEW DELHI MEASURING 152 SQ. YARDS WA S PURCHASED BY HIS WIFE SMT. RENUKA KHANDELWAL FOR A CONSIDERATION OF RS. 1,20,000/-. THUS, THERE IS APPARENT DIFFERENCE IN THE STATEMEN T OF THE HUSBAND OF THE ASSESSEE WITH REGARD TO COST OF PROPERTY AND TH E COST AS PER POWER OF ATTORNEY OF THE PROPERTY SHOWING THE COST OF RS. 95,000/-. THIS PROVES THAT THE COST OF PROPERTY IS NEITHER RS. 95, 000/- NOR RS. 1,22,000/-. THEREFORE, CONSIDERING THE LOCATION OF THE AREA AND PREVAILING MARKET, AND AS PER THE ENQUIRY REPORT DA TED 05/12/2009 OF THE ITO, WHO HAS ALSO MADE EXTENSIVE LOCAL ENQUIRY, THE COST OF PROPERTY AT SUCH A PRIME LOCATION AND HAVING A LARG E AREA OF 152 SQ. YDS. THE COST OF PROPERTY CANNOT BE LESS THAN RS. 2 6 LACS. FURTHER, THE ASSESSE HAS FAILED TO FILE AN AUTHORISED VALUERS R EPORT IN SPITE OF ALLOWING HER OPPORTUNITY FOR THE SAME. AS SUCH, THE COST OF THE PROPERTY IS TAKEN AT RS. 26 LACS PURCHASED BY THE ASESSEE FO RM UNDISCLOSED SOURCES AND ADDED TO THE INCOME OF THE ASSESSEE U/S 69 OF THE INCOME TAX ACT. AS THE ASSESSEE HAS CONCEALED THE PARTICU LARS OF HER INCOME AND HAS FURNISHED INACCURATE PARTICULARS OF HER INC OME PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT ARE BEING INITIATED SEPARATELY. (ADDITION RS. 26,00,000/-) AS PER ABOVE TEP REPORT OF THE DIRECTORATE OF INVE STIGATION, AND FURTHER CONFIRMED BY THE LOCAL ENQUIRY MADE BY THE ITI, THE ASSESSEE HAS RECONSTRUCTED ON THE AFOREMENTIONED LAND MEASURING 152 SQ. YARDS, GROUND FLOOR (BIG HALL), FIRST FLOOR (BIG HALL), SE COND FLOOR (BIG HALL) AND THIRD FLOOR (FOUR ROOMS). AS PER THE REP LY OF THE ASSESSEE SHE HAS PURCHASED A CONSTRUCTED PROPERTY. THUS, TH E ASSESSEE HAS ALSO NOT PROVIDED ANY INFORMATION IN THIS REGARD. THERE FORE, NO ALTERNATIVE IS LEFT EXCEPT TO RELY ON THE REPORT OF THE DIRECTO RATE AND ITIS LOCAL ENQUIRY REPORT. ACCORDINGLY, THE COST OF CONSTRUCT ION OF THE PROPERTY IS TAKEN AT RS. 20 LACS; AS FOR CONSTRUCTING ON SUCH A HUGE AREA AND SUCH A LARGE PORTION NO FUND LESS THAN RS. 20 LACS WOULD B E REQUIRED. THUS, THE SOURCE OF INVESTMENT BY THE ASSESSEE IN THE COS T OF CONSTRUCTION OF THIS PROPERTY IS FROM UNDISCLOSED SOURCES AND HENCE ADDED TO HER INCOME U/S 69 OF THE I.T. ACT. AS THE ASSESSEE HAS CONCEALED THE ITA NO. 2106/2011 RENU KHANDELWAL 5 PARTICULARS OF HER INCOME AND HAS FURNISHED INACCUR ATE PARTICULARS OF HER INCOME PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT ARE BEING INITIATED SEPARATELY. (ADDITION RS. 20,00,000/-) 4. THE LD. AR ON THE OTHER HAND, RELYING UPON THE I MPUGNED ORDER CONTENDED THAT THE CIT(A) HAS DELETED THE ADDITION BASED ON THE FACT THAT THE ONUS PLACED UPON THE REVENUE TO UPSET THE EVIDE NCE RELIED UPON BY THE ASSESSEE WAS NOT DISCHARGED AND THE COMPLAINT M ADE IN THE TAX EVASION QUOTATION ON THE BASIS OF WHICH INSPECTORS REPORT IS BEING RELIED UPON IS A MERE ESTIMATE AND DOES NOT HAVE THE SANCT ITY OF A VALUATION OFFICERS REPORT WHICH THE AO COULD HAVE SOUGHT. R EFERRING TO THE IMPUGNED ORDER IT WAS FURTHER SUBMITTED THAT NO COM PARATIVE CASES IN REGARD TO SALE OF SUCH PROPERTIES IN THAT PARTICULA R AREA HAS BEEN RELIED UPON BY THE AO. APART FROM THAT IT WAS ALSO POINTE D OUT THAT THE CIT(A) HAS GIVEN A FINDING IN PARA 7.1 THAT IT IS PECULIAR THAT THERE WAS NOT EVEN AN IOTA OF DIFFERENCE IN THE CONTENTS OF THE TAX EV ASION PETITION OF THE INSPECTORS REPORT. THIS CRITICAL FINDING IT WAS SU BMITTED HAS NOT BEEN RESPONDED TO BY THE REVENUE. IT WAS FURTHER CONTEN DED THAT THE FINANCIAL YEAR UNDER CONSIDERATION IS 2001-02 AND THE INSPECT OR HAS VISITED THE AREA FOR HIS REPORT DURING THE ASSESSMENT PROCEEDIN GS I.E. IN A.Y. 2009- 10. ON THAT DATE THE OLD CONSTRUCTION OBVIOUSLY WA S NOT THERE. ADDRESSING THE COST OF CONSTRUCTION IT WAS SUBMITTE D IT HAS BEEN DISCLOSED BY THE ASSESSEE IN THE RETURNS IN THE YEAR ENDING 3 1/03/2003 AND 31/03/2004 WHICH HAVE BEEN ACCEPTED BY THE DEPARTME NT AND THESE ITA NO. 2106/2011 RENU KHANDELWAL 6 FINDINGS ON FACTS ON RECORD IT WAS HIS SUBMISSION H AVE NOT BEEN REBUTTED BY THE LD. SR. DR. ACCORDINGLY, IT WAS HIS PRAYER THAT THE DEPARTMENTS APPEAL MAY BE DISMISSED. LD. AR HAS ALSO RELIED UPO N THE ORDER DATED 04/08/2014 IN ITA NO. 405/2014 IN THE CASE OF CIT-X I VS. MR. LAJPAT RAI TANEJA FOR THE PROPOSITION THAT ON FACTS WHERE THE MATTER TO THE VALUATION OFFICER HAS NOT BEEN REFERRED BY THE AO THE ADDITIO N EVEN RELYING UPON THE CIRCLE RATE U/S 50C HAS NOT BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT. COPY OF THE SAID JUDGMENT IS AVAILABLE ON R ECORD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION THEREOF, W E FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE AP PEAL OF THE REVENUE HAS TO BE DISMISSED. THERE IS NOTHING ON RECORD TO SHOW WHY GREATER CREDENCE BE GIVEN TO THE ALLEGED STATEMENT RECORDED OF THE HUSBAND AS OPPOSED TO THE WRITTEN SUBMISSIONS OF THE ASSESSEE. THE ITI IS NOT QUALIFIED TO ESTIMATE THE COST OF THE PLOT AT A SPE CIFIC POINT OF TIME A FEW YEARS SUBSEQUENTLY NOR IS BE QUALIFIED TO ESTIMATE THE COST OF CONSTRUCTION OF PROPERTY A FEW AFTER THE EVENT. EVEN THE REPORT S OF VALUATION EXPERTS THE COURTS HAVE REPEATEDLY HELD ARE AT BEST ESTIMAT ES AND CANNOT BE TREATED WITH GREATER SANCTITY WHERE THE ASSESSEE IS ABLE TO DEMONSTRATE ITS COST OF CONSTRUCTION RELYING ON HIS BOOKS OF AC COUNTS. ACCORDINGLY THE OCCASION TO BLINDLY RELY ON ITIS REPORT FOR VALUIN G THE COST OF LAND AND CONSTRUCTION THEREON BASED ON HIS VISIT IN 2009 WIT H ANY LEVEL OF CERTAINTY ITA NO. 2106/2011 RENU KHANDELWAL 7 ON THE ISSUES FOR EVENTS ON AND AFTER 5.9.2001 CANN OT BE HELD TO BE RELIABLE EVIDENCE TO DISBELIEVE THE ASSESSEES VERS ION. WE HAVE SEEN THE ITIS REPORT IS DATED 5/12/2009 IN REGARD TO THE PU RCHASE ON 5.9.2001. IN THE ABSENCE OF ANY REPORT OF A VALUATION OFFICER OR ANY CONTEMPORANEOUS EVIDENCE BROUGHT ON RECORD IN THEN FORM OF SALE OR PURCHASE OF IDENTICALLY SITUATED PROPERTIES AT THE RELEVANT POINT OF TIME T HE EVIDENCE RELIED UPON TO MAKE THE ADDITION DOES NOT INSPIRE ANY CONFIDENC E AS IT IS A MERE ESTIMATE THAT TOO BASED ON NO FACTS. THE CURIOUS F ACTS, RECORDED BY THE CIT(A) THAT IT IS PECULIAR THAT THERE WAS NOT EVEN AN IOTA OF DIFFERENCE IN THE CONTENTS OF THE TAX EVASION PETITION AND THE IN SPECTORS REPORT ALSO RAISES SERIOUS ISSUES ABOUT THE INDEPENDENCE OF THE EVIDENCE RELIED UPON BY THE AO AS IT DOES NOT INSPIRE ANY CONFIDENCE. I T IS SEEN THAT ON FACTS THE CIT(A) HAS TAKEN THE FOLLOWING REASONING FOR AL LOWING THE ASSESSEES APPEAL: 7. THE NEXT ISSUE IS THE ADDITION OF RS. 26,00,00 0/- BEING THE ALLEGED CONSIDERATION FOR ACQUIRING THE PLOT OF LAND AND AD DITION OF RS. 20,00,000/- BEING THE AMOUNT SPENT FOR RECONSTRUCTI ON OF THE THREE- STOREYED BUILDING ON THIS PLOT. THERE IS NO DENIAL TO THE FACT THAT THE AO RESTED HIS BELIEF ON THE COMPLAINT MADE IN TEP. IT IS ALSO EVIDENT THAT IN ORDER TO GATHER EVIDENCE, THE AO DISPUTED AN INS PECTOR T CONDUCT ENQUIRY, AND AFTER CONDUCTING ENQUIRY IN THE AREA, THE INSPECTOR OF INCOME TAX AFFIRMED THE CONTENTS OF THE TEP. THE MO OT QUESTION BEFORE ME IS WHETHER ANY INCOME CAN BE TAXED BY DEEMING TH E VALUE OF ANY INVESTMENT REFERRED TO IN SEC. 69, SECTION 69A OR S EC. 69B OF THE ACT. IT IS WELL-SETTLED THAT IF THE AO SEEKS TO HOLD THAT T HE ASSESSE HAS PAID MORE CONSIDERATION THAN THE AMOUNT DECLARED BY HIM IN RESPECT OF ANY INVESTMENT, THE ONUS WOULD LIE ON THE REVENUE TO PR OVE THIS FACT BY BRINING MATERIAL ON RECORD. THE SAID FINDING HAS B EEN OBSERVED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NA RESH KHATTAR (HUF) ITA NO. 2106/2011 RENU KHANDELWAL 8 261 ITR 664, AFTER CONSIDERING THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF K.P. VERGHESE 131 ITR 597. IT IS A TRITE LAW THAT ONUS TO PROVE OTHERWISE THAN THE FACT, LIES ON THE PERSON W HO ALLEGES IT. IN CASE THE DEPARTMENT WANTS TO MAKE OUT A CASE THAT THE AS SESSEE HAD PAID MORE CONSIDERATION THEN THEY SHOULD HAVE BASIC MATE RIAL AND EVIDENCE IN THEIR HANDS WHICH SUGGEST THAT THE CONSIDERATION EXCEEDS THE AMOUNT SHOWN IN THE DOCUMENT. 7.1 IN THE INSTANT CASE, NO MATERIAL HAS BEEN GATHE RED BY THE AO SO AS TO SUGGEST THAT THE APPELLANT PAID CONSIDERATION IN CASH WHICH WAS OVER AND ABOVE THE SALE CONSIDERATION AS PER THE RE GISTERED SALE DEED. IT IS NOT THE CASE OF THE AO THAT HE HAD SOME EVIDE NCE SUCH AS INSTRUMENT OF TRANSFER OF SIMILAR TYPE OF PROPERTY IN THE SAME LOCALITY, HAVING BEEN SOLD OR PURCHASED AT A HIGHER VALUE THA N THAT DECLARED BY THE APPELLANT IN THE RELEVANT PERIOD. THE AO ALSO FAILED TO CONDUCT ANY ENQUIRY FROM THE SUB REGISTRAR TO FIND COMPARATIVE CASES OF SALE CONSIDERATION OF PROPERTIES IN THAT PARTICULAR AREA IN THE RELEVANT A.Y. THE AO HAS MENTIONED IN THE ORDER THAT THE APPELLAN T DID NOT PRODUCE THE COPY OF VALUATION REPORT. IN SUCH CIRCUMSTANCE S, THE APPELLANT HAS ADDUCED THE COPY OF THE GPA, RECEIPT FOR THE SALE C ONSIDERATION, VALUATION REPORT OF A REGISTERED VALUER AND COPY OF THE POSSESSION LETTER BEFORE ME. EVEN, IN THE CASE OF A REPORT OF THE VA LUATION OFFICER, THE COURTS HAVE TAKEN THE VIEW THAT THE VALUATION REPOR T IS ONLY AN OPINION OF THE VALUER AND MUST BE BUTTRESSED BY COGENT EVID ENCE. SIMILARLY, THE CONTENTS OF THE COMPLAINT IN TEP CANNOT BE REGARDED AS EVIDENCE, RATHER IT IS THE OPINION OF THE COMPLAINANT. THE B ASIS OF MAKING THE ADDITIONS BY THE AO IS THE TEP AND THE INSPECTORS REPORT. IT IS PECULIAR THAT THERE WAS NOT EVEN AN IOTA OF DIFFERENCE IN TH E CONTENTS OF THE TEP AND THE INSPECTORS REPORT. 7.2 THE APPELLANT HAS FURNISHED COPY OF THE RETURN OF INCOME, ALONG WITH COPY OF BALANCE SHEET AS ON 31.3.2003, FILED F OR THE RELEVANT ASSESSMENT YEAR. THE PERUSAL OF THE BALANCE SHEET SHOWS THAT THE APPELLANT HAS DULY DISCLOSED THE PURCHASE VALUE OF THE PROPERTY. IT WAS FOR THE AO TO PROVE THAT THERE WAS TRANSFER OF UNDI SCLOSED MONEY FOR THE ACQUISITION OF THE PROPERTY AND THAT THERE WAS CONC EALMENT OF THE COST OF CONSTRUCTION OF THE PROPERTY. NO SUCH EVIDENCE HAS BEEN GATHERED BY THE AO TO SUGGEST THAT THE APPELLANT HAD MADE ANY P AYMENT OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE RETURN OF THE APPELLANT. SIMILARLY, THE AO HAS NOT BROUGHT ANY MATERIAL ON R ECORD IN SUPPORT OF HIS FINDING THAT THE APPELLANT HAD INCURRED RS. 20 LACS TO RECONSTRUCT THE BUILDING ON THIS PROPERTY. THE BURDEN OF PROVING A N UNDERSTATEMENT OR CONCEALMENT FOR COST INVOLVED IN THE CONSTRUCTION I S ON THE AO, WHICH MAY BE DISCHARGED BY HIM BY ESTABLISHING FACTS AND CIRCUMSTANCES FROM WHICH A REASONABLE INFERENCE CAN BE DRAWN THAT THE APPELLANT HAS NOT ITA NO. 2106/2011 RENU KHANDELWAL 9 CORRECTLY DECLARED OR DISCLOSED THE COST OF CONSTRU CTION. THE APPELLANT CLAIMS TO HAVE RECONSTRUCTED THE PROPERTY AND HAS S HOWN THE COST OF CONSTRUCTION OF RS. 3,01,500/- IN THE YEAR ENDING O N 31.03.2003 AND RS. 1,90,650/- IN THE YEAR ENDING ON 31.03.2004. THERE FORE, THE TOTAL COST OF CONSTRUCTION SHOWN BY THE APPELLANT COMES TO RS. 5,87,100/-. THE APPELLANT HAS CONTENDED THAT THE AO HAS RELIED ONLY UPON THE INSPECTORS REPORT, WHICH MAY HAVE BEEN BASED ON TH E DATE OF ENQUIRY CONDUCTED I.E. RELEVANT TO THE A.Y. 2009-10 AND NOT FOR THE RELEVANT PERIOD I.E. A.Y. 2001-02. THEREFORE, I AM OF THE C ONSIDERED VIEW THAT UNLESS THE CONTRARY IS PROVED BY USING COGENT MATER IAL, ADVERSE INFERENCE CANNOT BE DRAWN THAT THE APPELLANT HAD PA ID CONSIDERATION IN CASH WHICH WAS OVER AND ABOVE THE VALUE OF SALE CON SIDERATION AS PER THE REGISTERED SALE DEED, AND INVESTED HER UNDISCLO SED INCOME TO CONSTRUCT THE BUILDING OVER AND ABOVE THE DECLARED VALUE. FURTHER, I AM ALSO OF THE VIEW THAT THE INSPECTORS REPORT CAN NOT BE THE BASIS OF MAKING ADDITION UNLESS IT IS SUPPORTED WITH MATERIA L/EVIDENCES WHICH HOLD GOOD IN THE EYES OF LAW. THUS, I AM INCLINED TO HOLD THAT THE ADDITION MADE WAS BASED ON SURMISES AND CONJECTURES AND GUESSWORK. IN VIEW OF THE TOTALITY OF THE FACTS AND CIRCUMSTAN CES OF THE CASE AND THE DISCUSSION ABOVE, THE ADDITION OF RS. 46 LACS MADE ON THIS COUNT STANDS DELETED. 5.1 BEFORE PARTING WE OBSERVE THAT THE ASSESSEE HAD FILED APPLICATION UNDER RULE 27 OF THE ITAT RULES IN SUPPORT OF THE I MPUGNED ORDER ASSAILING THE REOPENING U/S 148 OF THE ACT WHICH HA S BEEN UPHELD BY THE CIT(A). HOWEVER, SINCE NO ARGUMENTS AT THE TIME OF HEARING WERE ADDRESSED THEREON THE SAME DOES NOT REQUIRE ANY ADJ UDICATION. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES , WE FIND NO GOOD REASON TO INTERFERE WITH THE FINDING ARRIVED AT. I N THE ABSENCE OF ANY MATERIAL ON RECORD ASSAILING THE SAME WE UPHOLD THE ORDER AS BEING SATISFIED WITH THE REASONING AND FINDING ARRIVED AT THEREIN BY THE CIT(A). THE DEPARTMENTS GROUNDS ARE DISMISSED. WE ALSO FI ND SUPPORT FROM THE JUDGMENT AND DECISION OF THE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT- ITA NO. 2106/2011 RENU KHANDELWAL 10 XI VS. MR. LAJPAT RAI TANEJA CITED (SUPRA), WHEREIN THEIR LORDSHIPS WERE PLEASED TO HOLD AS UNDER: 3. IT IS APPARENT THAT THE LD. COUNSEL FOR THE RE VENUE HAS NOT RELIED UPON SECTION 50C OF THE ACT AS THE AO HAD NOT MADE REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER TO COMPUTE THE FAIR MARKET VALUE IN TERMS OF THE SAID PROVISION, BUT FOR THE SAME REASO N, WE ALSO FEE THAT THE ADDITION MADE BY INVOKING SEC. 69 CANNOT BE SUSTAIN ED. THE ONLY BASIS AND FOUNDATION OF THE ORDER PASSED BY THE AO WAS TH E CIRCLE RATE. THE AO DID NOT CONDUCT ANY FURTHER INQUIRY AND EXAMINE THE ACTUAL MARKET PRICE OF THE TWO SHOPS. MERELY AND SOLELY ON THE B ASIS OF THE CIRCLE RATE, ADDITION COULD HAVE BEEN MADE BY THE AO BY INVOKING SEC. 69 OF THE ACT. THE AO SHOULD HAVE FOLLOWED THE PROCEDURE UND ER SECTION 50C ONCE DISPUTE WAS RAISED BY THE RESPONDENT-ASSESSEE AND REFERENCE SHOULD HAVE BEEN MADE TO THE DEPARTMENTAL VALUATION OFFICER. THIS LAPSE AND FAILURE ON THE PART OF THE AO DENTS AND K NOCKS THE FOUNDATION ON THE BASIS OF WHICH ADDITION WAS MADE.] 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER, 2014 SD/- SD/- (J.S. REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24/09/2014 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR ITA NO. 2106/2011 RENU KHANDELWAL 11