Gujarat Hi Flow Yarn Limited, Surat V. The Income tax Officer, Ward-1(2), Surat

ITA 3001/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2406 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 28-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Depreciation; Additional depreciation; Cost of acquisition; Valuation report; Set aside; Capital Gains
• Section: 50C; 69B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI MUKUL KUMAR SHRAWAT, J.M. AND HON'BLE SHRI D.C. AGRAWAL, A.M.) I.T.A. NO. 3001/AHD./2008 ASSESSMENT YEAR : 2005-2006 GUJARAT HI FLOW YARN LIMITED, SURAT -VS.- INC OME TAX OFFICER, WARD-1(2), SURAT (PAN : AAACG 8701 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAMESH MALPANI, A. R. RESPONDENT BY : SHRI S.S. SHUKLA, SR. D.R . O R D E R PER SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, SURAT FOR THE ASSESSMENT YEAR 2005 -06 ON THE FOLLOWING GROUNDS :- (1) DELETION OF CLAIM OF DEPRECIATION RS.11,00,000/- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS P ER THE CORRECT INTERPRETATION OF TUF SCHEME AND DEPRECIATI ON APPENDIX I, PART-III, MACHINERY & PLANT (6), THE CO MMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN REFUSI NG TO GRANT 50% DEPRECIATION ON MACHINERIES WHICH WERE PART OF THE WEAVING SECTOR. (II) THE APPELLANT SUBMITS THAT THE AFOREMENTIONED AMOUN T OF RS.11,00,000/- MAY BE ADDED. (2) UNEXPLAINED INVESTMENT U/S.69B OF RS.31,81,130/- IN LAND & BUILDING: (I) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN CONFIRMING THE ADDITION OF RS.31,81,130/- ON THE BA SIS OF REPORT OF DISTRICT VALUATION OFFICER WHEN THE REPORT OF TH E DISTRICT VALUATION OFFICER, ON THE FACTS AND CIRCUMSTANCES O F THE CASE WAS NOT CORRECT AND THE REPORT OF THE APPROVED VALU ER SHRI SUBHASH K. LASANIA AND OTHER APPROVED VALUER OUGHT TO HAVE BEEN ACCEPTED. 2 ITA NO. 3001-AHD-2008 (II) WITHOUT PREJUDICE TO THE ABOVE, NO ADDITION IN INVE STMENT CAN BE MADE IMPLY ON THE BASIS OF REPORT OF THE DISTRICT V ALUATION OFFICER AND THE ADDITION MADE IS REQUIRED TO BE DEL ETED. (III) WITHOUT PREJUDICE TO THE ABOVE, THE EVIDENCES, STAT EMENTS, DETAILS AND OTHER RELEVANT FACTS & INFORMATION SUBM ITTED FOR THE PURCHASE PRICE OF LAND AND BUILDING HAVE NOT BEEN C ORRECTLY WEIGHTED AND REQUIRED TO BE APPRECIATED IN THE LIGH T OF FACT & CIRCUMSTANCES OF THE CASE. (3) MISCELLANEOUS :- (I) THE APPELLANT CRAVES TO ADD, AMEND, ALTER, SUBSTITU TE, MODIFY OR VARY ANY OF THE ABOVE GROUNDS OF APPEAL, IF NECESSA RY, ON THE BASIS OF SUBMISSIONS TO BE MADE AT THE TIME OF PERS ONAL HEARING. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF TEXTURISED YARN. THE FIRST ISSU E RELATES TO THE ADDITION OF RS.11,00,000/- BEING DISALLOWANCE OF ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE ON MACHINERIES INSTALLED UNDER TUFF SCHEME. ACCORDING TO ASSESSING OFFICER, THE MA CHINES ARE NOT COVERED IN THE RELEVANT RULE UNDER THE ENTRY NO.6 IN APPENDIX 1, PART-III, MACH INERY & PLANT OF THE DEPRECIATION TABLE. IN THAT TABLE FOLLOWING DESCRIPTION IS PROVIDED TO GR ANT ADDITIONAL DEPRECIATION :- APPENDIX-I, PART-A, III- MACHINERY & PLANT SR. NO. MACHINERY & PLANT DEPRECIATION ALLOWANC E AS PERCENT AGE OF WRITTEN DOWN VALUE. 6. MACHINERY AND PLANT, USED IN WEAVING, PROCESSING AND GARMENT SECTOR OF TEXTILE INDUSTRY, WHICH IS PURCHASED UNDER TUFS ON OR AFTER THE 1 ST DAY OF APRIL, 2004 AND IS PUT TO USE BEFORE THE 1 ST DAY OF APRIL, 2004. 50 __________________________________________________ ______________________ ACCORDING TO ASSESSING OFFICER, TEXTURISING AND TWI STING ACTIVITIES TAKE PLACE PRIOR TO WEAVING ACTIVITY AND SINCE TEXTURISING AND TWISTING ACTIVIT IES ARE NOT SPECIFICALLY INCLUDED IN THE ABOVE PROVISIONS, HIGHER DEPRECIATION CANNOT BE ALLOWED. ACCORDING TO HIM, THE STEPS OF ACTIVITIES ARE IN SEQUENCE, ONE AFTER ANOTHER. FIRST, PRIOR TO WEAVIN G ACTIVITIES, TEXTURISING &, TWISTING, ACTIVITIES ARE REQUIRED TO BE COMPLETED FOR WEAVING & PROCESSI NG OF CLOTH AND FINALLY MANUFACTURING OF 3 ITA NO. 3001-AHD-2008 GARMENTS. THUS AS PER FLOW OF THE LANGUAGE OF THE R ULE, MACHINERY AND PLANT USED IN ACTIVITIES PRIOR TO WEAVING ACTIVITY DO NOT FIND PLACE IN THE PROVISIONS OF THE RULE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HOWEVER, CONF IRMED THE ADDITION FOLLOWING THE REASONING GIVEN BY THE ASSESSING OFFICER. 3. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS NOW COVERED BY THE DECISION OF THE TRIBUNAL, WHEREI N HIGHER DEPRECIATION ALLOWABLE ON MACHINERY INSTALLED UNDER TUF SCHEME, I.E. MACHINER IES UTILIZED FOR TEXTURISING AND TWISTING. THESE ACTIVITIES ARE CONSIDERING TO BE PART OF WEAV ING AIVITY. IN THIS REGARD, THE LD. A.R. DREW OUR ATTENTION TO THE FOLLOWING JUDGMENTS :- (I) HANUMAN FILAMENTS PVT. LTD. VS.- DCIT, CIRCLE- 1, SURAT IN ITA NOS. 1412/AHD/2007 & 156/AHD/2008 ORDER DATED 21. 05.2010; (II)FAIRDEAL FILAMENTS LTD.- VS.- DCIT, CIRCLE-1, S URAT IN ITA NO. 870/AHD/2007 & 2807/AHD/2009 ORDER DATED 23.04.20 10. 4. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE OR DER OF AUTHORITIES BELOW. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ALLO W THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE TRIBUNAL AS REFERRED TO ABOVE. THE TRIBUNAL IN THE CASE OF FAIRDEAL FILAMENTS LTD. HAS HELD AS UNDER :- 5. THE LD. D.R. HAS TRIED TO DISTINGUISH THE ABOVE DECISION ON THE GROUND THAT THE ASSESSEE IS NOT IN THE BUSINESS OF WEAVING. HOWEVER, WE FIND THAT IN THE ASSESSMENT ORDER ITSELF THE A.O. A T PAGE NO. 1 OF THE ASSESSMENT ORDER HAS MENTIONED THAT THE BUSINESS OF THE ASSESSEE IS THAT OF MANUFACTURING OF THE GREY FABRICS, SIZING TEXTURING AND TWISTING OF YARN. AT PAGE NO. 3 OF THE ASSESSMENT ORDER, THERE IS QUANTI TATIVE DETAIL OF THE USING OF TEXTURISED YARN OR TWISTED YARN FOR THE PURPOSE OF WEAVING. THE SAME IS REPRODUCED BELOW. A. TEXTURISED YARN TRANSFERS IN TFO UNIT 350.050 KG . B TEXTURISED YARN TRANSFERRED TO WEAVING UNIT 1896. 92 KG. C. TFO YARN TRANSFER IN WEAVING UNIT 164251.17 KG. D. TOTAL CAPTIVE USED IN WEAVING UNIT = (B + C) 166 148.08 KG. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS UTILIZED THE TWISTED/ TEXTURISED YARN FOR THE PURPOSE OF WEAVING OF GREY CLOTH. IT WAS ALSO POINTED BY THE LEARNED DR AT THE TIME OF HEARING TH AT THE ENTIRE YARN WAS NOT UTILIZED FOR THE PURPOSE OF WEAVING, BUT WAS PA RTLY SOLD IN THE MARKET. 4 ITA NO. 3001-AHD-2008 IN OUR OPINION, EVEN IF THE YARN WAS PARTLY UTILIZE D FOR THE PURPOSE OF MAKING GREY CLOTH, THE ASSESSEE IS USING PLANT & MA CHINERY FOR THE PURPOSE OF WEAVING. ON THE ABOVE FACTS DECISION OF THE ITAT IN THE CASE OF NANGALIA SIZERS PVT. LTD. (SUPRA) WOULD BE SQUARELY APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE A.O. TO ALLOW DEPRECIATION ON THE PLANT & MACHINERY PURCHASED BY THE ASSESSEE UNDER TUFS @ 50%. 5.1. IN THE CASE OF HANUMAN FILAMENTS PVT. LTD., TH E TRIBUNAL OBSERVED IN PARA 9 & 9.1 AS UNDER :- 9. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW AS WELL AS THE DECISION DATED 18.2.09 OF ITAT, D BENCH, AHMEDABAD IN ITA NO. 3128/AHD/2008 FOR THE ASSESSME NT YEAR 2005-06 (SUPRA). THE RELEVANT DISCUSSION IS CONTAINED IN PA RA 7 OF THE SAID ORDER OF THE TRIBUNAL, WHICH READS AS UNDER :- 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS, GONE THRO UGH THE FACTS AND CIRCUMSTANCES AND ALSO ORDERS OF THE TAX AUTHORITIES. IT IS APPARENT FROM THE RECORD THAT THE AO HAS RESTRIC TED THE DEPRECIATION AT THE RATE OF 25% BY OBSERVING THAT A S PER RULE 5 OF THE IT ACT, DEPRECIATION WAS ALLOWABLE @ 50% ONL Y MACHINERY AND PLANT, WHICH ARE ACTUALLY USED IN WEA VING PROCESS AND NOT MACHINERY USED FOR TWISTING PROCESS . ON PERUSAL OF THE APPENDIX I OF THE INCOME TAX RULES, IT IS EVIDENT THAT THIS PARTICULAR MACHINERY SHOULD BE USED IN WE AVING SECTOR AND DOES NOT RESTRICT THAT IT SHOULD BE USED IN WEA VING PROCESS OF THE TEXTILE INDUSTRY. SINCE ADMITTEDLY, THE TWIS TER MACHINE WAS USED BY WEAVING SECTOR OF TEXTILE INDUSTRY, DEPRECI ATION ON THE SAID MACHINERY AT THE RATE OF 50% SHOULD BE ALLOWED . THE ASSESSEE UNDERTAKES ALL THE ACTIVITIES RIGHT FROM T WISTING OF YARN OF WEAVING TO MAKE FINAL GREY CLOTH. LIST OF MACHIN ERIES MENTIONED IN THE SCHEDULE PUBLISHED BY THE MINISTRY OF TEXTILE AND REFERRED TO ABOVE STATE MULTIPLE PURPOSE AND US AGE OF TWISTER MACHINES. WE FIND THAT TAX AUTHORITIES HAVE NOT JUSTIFIED IN DENYING THE CLAIM OF THE ASSESSEE FOR DEPRECIATI ON ON THE TWISTER MACHINE AT THE RATE OF 50% AND, THEREFORE, WE SET ASIDE THEIR RESPECTIVE ORDERS AND ALLOW THE CLAIM OF THE ASSESSEE. 9.1. WE, THEREFORE, FOLLOWING THE DECISION OF THE T RIBUNAL D BENCH, AHMEDABAD IN ITA NO. 3128/AHD/2008 (SUPRA) DIRECT T HE ASSESSING OFFICER TO ALLOW THE DEPRECIATION @ 50% AS CLAIMED IN BOTH THE ASSESSMENT YEARS UNDER APPEAL. RESULTANTLY, GROUND NO. 1 FOR BOTH THE ASSE SSMENT YEARS IS ALLOWED. 5.2. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ALLOW THE CLAIM OF THE ASSESSEE. RESULTANTLY, THIS GROUND OF APPEAL IS ALLOWED. 5 ITA NO. 3001-AHD-2008 6. THE NEXT ISSUE IS ABOUT THE ADDITION OF RS.31,81 ,130/- IN LAND AND BUILDING MADE UNDER SECTION 69B. THE FACTS RELATING TO THIS ISSUE ARE T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS P URCHASED TWO PLOTS OF LAND WITH SUPER STRUCTURE OF FACTORIES BY WAY OF TWO REGISTERED SAL E DEEDS FOR A DECLARED TOTAL CONSIDERATION OF RS.2,22,000/-. THE ASSESSING OFFICER FOUND THAT THE STAMP VALUATION AUTHORITIES HAD LEVIED ADDITIONAL STAMP DUTY WHILE REGISTERING THE SALE DE ED. HE ACCORDINGLY REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER UNDER SECTION 142A F OR DETERMINING THE INVESTMENT IN LAND AND OLD CONSTRUCTION THEREON AS ON THE DATE OF PURCHASE , THE DVO SUBMITTED HIS VALUATION REPORT AS PER WHICH THE TOTAL VALUE OF THE TWO PLOTS WAS WORK ED OUT AT RS.33,77,200/-. THE ASSESSING OFFICER ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN THE DIFFERENCE IN THE DECLARED COST OF ACQUISITION AND INVESTMENT. IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT THE BUILDING WAS IN A VERY BAD SHAPE BUT THE LAND WAS PURCHASED AT THE RA TE OF RS.108.5 PER SQ.MT., WHEREAS THE PREVAILING MARKET RATE AS PER JANTRI WAS RS.150/- P ER SQ.MT. REGARDING SUPER STRUCTURE, THE ASSESSEE STATED THAT IT WAS IN A VERY BAD SHAPE AND WAS OF NO USE, THEREFORE, IT WAS NOT VALUED AT ALL. IT WAS CLAIMED THAT SUPER STRUCTURE WAS DISMA NTLED IN THE PERIOD RELATING TO ASSESSMENT YEAR 2004-05 AND FRESH CONSTRUCTION WAS MADE IN WHICH TH E ASSESSEE HAD MADE FURTHER INVESTMENT OF RS.3,95,397/-, WHICH WOULD FALL FOR THE CONSIDERATI ON IN THE ASSESSMENT YEAR 2005-06. THE ASSESSING OFFICER, HOWEVER, DID NOT AGREE AND HE WO RKED OUT THE TOTAL INVESTMENT AT RS.34,13,880/-, WHICH INCLUDED RS.33,77,200/- AS VA LUED BY DEPARTMENTAL VALUATION OFFICER AND RS.33,680/- BEING THE STAMP DUTY CHARGES. THEREAFTE R, HE REDUCED A SUM OF RS.2,32,750/- BEING THE COST OF THE PLOT AND OTHER EXPENSES. THIS RESUL TED IN AN ADDITION OF RS.31,81,130/-, WHICH WAS MADE UNDER SECTION 69B OF THE ACT. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AFTER REFERRING TO THE ARGUMENTS OF THE LD. A.R. CONFIRMED THE ADDITION WITH FOLLOWING OBSERVATIONS :- 6.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND OBSERVATION OF THE A.O. ADMITTEDLY, THE APPELLANT H AD UNDERVALUED THE PROPERTY. THE JANTRI RATE WAS AT RS.150/- AS ADMITT ED BY THE APPELLANT. THE GOING RATE IN THE VICINITY WAS RS.175/- PER SQ. MT. AS PER THE DVO. THESE FACTS CLEARLY ESTABLISH THAT THE ASSESSEE HAD PURCHASED THE PROPERTY WHOSE INVESTMENT HE WAS UNABLE TO EXPLAIN AND, THEREFORE, THE 6 ITA NO. 3001-AHD-2008 PROVISIONS OF SECTION 69B ARE CLEARLY ATTRACTED. TH E DVO HAS GIVEN REASON FOR ADOPTING THE RATE OF RS.175/- WHICH THE ASSESSEE HAS NOT BEEN ABLE TO CONTRADICT. HENCE, THE ADDITION MADE B Y THE A.O. IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 8. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE REFERENCE BY THE ASSESSING OFFICER TO DVO UNDER SECTION 142A IS ILLEGAL AND NOT VALID IN THE EYES OF LAW BECAUSE HE HAS NOT FOUND ANY INVESTMENT OVER AND AB OVE WHAT HAS BEEN PAID BY THE ASSESSEE. FOR ACQUIRING JURISDICTION TO REFER THE PROPERTY TO THE DVO UNDER SECTION 142A, HE HAS TO GIVE FINDING ON THE BASIS OF CREDIBLE EVIDENCE THAT SOME THING OVER AND ABOVE THE DECLARED COST OF LAND IN QUESTION HAS BEEN PAID BY THE ASSESSEE. HE REFER RED TO THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS.- CIT [2010] 328 I TR 513. ACCORDING TO THIS DECISION, UNLESS THE BOOKS OF ACCOUNTS ARE REJECTED, REFERENCE TO TH E DVO CANNOT BE MADE. HE THEN REFERRED TO THE DECISION DATED 18.06.2010 OF THIS TRIBUNAL IN THE C ASE OF FOREMOST FINVEST PVT. LTD., SURAT VS.- ITO, WARD-1(2), SURAT IN ITA NO. 2826/AHD/2008 FOR THE ASSESSMENT YEAR 2005-06, WHEREIN IT IS HELD AS UNDER :- 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW NO SUCH ADDITION AS PROPOSED BY THE A.O. AND CONFIRMED BY THE LD. C.I.T.(A) CAN BE MADE U/S. 69B . THERE IS NO MATERIAL BROUGHT IN BY THE A.O. TO SHOW THAT ASSESSEE HAS SP ENT MORE THAN WHAT IT HAS CLAIMED TO HAVE SPENT FOR PURCHASE OF PROPERTIES. I F THERE IS NO EVIDENCE THAT ANY EXTRA AMOUNT IS PAID THEN ADDITION ON THE BASIS OF PRESUMPTION COULD NOT BE SUSTAINED. FOR INVOKING SEC. 69B THE THREE INGREDIE NTS AS POINTED OUT ABOVE ARE REQUIRED TO BE SATISFIED. OUT OF THIS FIRST INGREDI ENT IS MAIN AND IF THAT IS NOT EXISTING THEN A.O. CAN NOT GET JURISDICTION TO INVO KE THAT SECTION. THIS MAIN INGREDIENT IS THAT ASSESSEE SHOULD HAVE BEEN FOUND TO HAVE MADE INVESTMENT WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THI S INVESTMENT IS REAL AND NOT HYPOTHETICAL. IT SHOULD HAVE BEEN FOUND TO HAVE BEE N ACTUALLY INCURRED AND SHOULD NOT BE DERIVED, FROM PRESUMPTION. SUCH EXPEN DITURE SHOULD BE REAL AND SHOULD NOT BE BASED ON ESTIMATE, SUBJECT TO ONE EXC EPTION THAT WHERE A PART OF EXTRA EXPENDITURE IS FOUND NOT RECORDED IN THE BOOK S THEN A.O. WOULD BE EMPOWERED TO MAKE THE ESTIMATE FOR FULL EXPENDITURE NOT FOUND RECORDED IN THE BOOKS AND FOR THIS PURPOSE HE CAN GET ASSISTANCE FR OM D.V.O. BUT WHERE NO NUCLEUS OF ANY EXTRA INVESTMENT, OVER AND ABOVE WHA T IS RECORDED IN THE BOOKS IS FOUND THEN QUESTION OF MAKING ANY ESTIMATE WOULD NO T ARISE. IN THE INSTANT CASE, THE A.O. HAS SIMPLY RELIED ON THE ESTIMATE MADE BY THE D.V.O. WITHOUT THERE BEING ANY SUPPORTIVE EVIDENCE THAT ASSESSEE HAS INC URRED INVESTMENT OVER AND ABOVE RS. 22 LACS. ACCORDINGLY A.O. COULD NOT GET J URISDICTION TO INVOKE SECTION 69B. 14. SIMILARLY, A.O. CAN NOT INVOKE SECTION 50C BECA USE THIS SECTION CAN ONLY BE INVOKED FOR THE PURPOSES OF COMPUTING CAPITAL GAINS I.E. WHERE ASSESSEE HAS TRANSFERRED HIS CAPITAL ASSET AND HE IS LIABLE FOR CAPITAL GAINS ON SUCH TRANSFER 7 ITA NO. 3001-AHD-2008 THEN IN PLACE OF SALE CONSIDERATION DECLARED BY THE ASSESSEE THE VALUATION DONE BY STAMP VALUATION AUTHORITIES FOR THE PURPOSE OF L EVY OF STAMP DUTY ON TRANSFER OF SUCH CAPITAL ASSET, WOULD BE SUBSTITUTED. IT IS UNDISPUTEDLY NOT A CASE OF TRANSFER OF ANY ASSET BY THE ASSESSEE. ON THE OTHER HAND, ASSESSEE HAS PURCHASED PROPERTIES WHOSE DETAILS ARE GIVEN ABOVE. PROVISION S OF SEC. 50C CANNOT BE INVOKED IN THE CASE OF THE PURCHASER AS HE IS NOT L IABLE TO ANY CAPITAL GAINS. OUR VIEW IS SUPPORTED BY THE DECISION OF ITAT DELHI BEN CH IN ITO VS FITWELL LOGIC SYSTEM PVT. LTD. (2010) 001 ITR (TRIB.)286( ITAT DE LHI C-BENCH) WHERE ON SIMILAR FACTS DELETION OF ADDITION WAS HELD JUSTIFI ED. IN THAT CASE ASSESSEE HAD PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS.1. 25 CRORES WHEREAS VALUATION FOR THE PURPOSE OF STAMP DUTY WAS MADE AT RS.1,34,7 9,780/- .THE DIFFERENCE OF RS.9,79,780/- WAS ADDED U/S. 50C. THE C.I.T.(A) DEL ETED THE ADDITION ON THE GROUND THAT THERE WAS NO MATERIAL TO ESTABLISH THAT ACTUAL CONSIDERATION PAID BY THE ASSESSEE WAS HIGHER THAN WHAT WAS DECLARED IN T HE SALE DEED. THE TRIBUNAL, DISMISSED THE DEPARTMENTAL APPEAL HOLDING THAT THER E WAS NO EVIDENCE OR MATERIAL TO ESTABLISH THAT ASSESSEE HAS MADE ACTUAL INVESTMENT TO THE EXTENT OF RS. 1,34,79,780/- AS AGAINST RS.1.25 CRORES AS SHOWN IN THE SALE DEED. IN THE PRESENT CASE, ALSO THERE IS NO EVIDENCE OR MATERIAL TO ESTA BLISH THAT ASSESSEE HAS MADE ACTUAL INVESTMENT OF RS 36,48,623/- AS AGAINST RS.2 2 LAKHS DECLARED BY THE ASSESSEE OR THAT THERE WAS ANY INVESTMENT OVER AND ABOVE RS.22 LAKHS. THE LD. A.R. THEN REFERRED TO THE DECISION DATED 24 .10.2008 OF THIS TRIBUNAL IN THE CASE OF DYNAMIC SOFT LINK PVT. LTD., SURAT VS.- ITO, WARD- 1(2), SURAT IN ITA NO. 2696/AHD/2008 FOR THE PROPOSITION THAT REFERENCE TO DVO CANNOT BE MAD E WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND SECONDLY ADDITION UNDER SECTION 69B CANNOT BE M ADE UNLESS EXCESS INVESTMENT IS FOUND BY THE ASSESSING OFFICER. 9. ACCORDING TO THE LD. A.R., REFERENCE UNDER SECTI ON 142A IS NOT VALID, AND THEREFORE ADDITION ON THE BASIS OF DVOS REPORT CANNOT BE MAD E. IN THE ALTERNATIVE, THE LD. A.R. SUBMITTED THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X (APPEALS) IS CRYPTIC AND DOES NOT MENTION THE ARGUMENT OF THE ASSESSEE TAKEN AGAINST THE DVOS REPORT. HE SUBMITTED THAT THE DVO INSPECTED THE PROPERTY ON 24.11.2007 AND SUBMIT TED HIS REPORT ON 25.12.2007. THE ASSESSING OFFICER SENT IT ON 27.12.2007 AND ASKED H IM TO FURNISH HIS REPLY BY 28.12.2007, THE ASSESSMENT ORDER WAS PASSED ON 31.12.2007, AND THUS NO PROPER OPPORTUNITY WAS GIVEN TO MEET OUT THE POINTS RAISED BY THE DVO IN HIS REPORT. EVE N BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), ARGUMENT RAISED AGAINST THE R EPORT WAS NOT CONSIDERED. HE WAS NOT GIVEN OPPORTUNITY TO OBTAIN HIS OWN REPORT FROM THE REGIS TERED VALUER FOR COMPARISON WITH THE DVOS REPORT. THE LD. A.R. SUBMITTED THAT THE DVO COULD N OT HAVE ESTIMATED THE VALUE OF THE BUILDING WHEN IT WAS NOT EXISTING IN THE ORIGINAL SHOP ON TH E DATE OF INSPECTION. THE SALE DEED IS DATED 8 ITA NO. 3001-AHD-2008 MARCH, 2005 AND, THEREFORE, THE DVO ON THE DATE OF INSPECTION COULD NOT HAVE ESTIMATED THE VALUE OF THE BUILDING PURCHASED BY THE ASSESSEE. TH E LD. A.R. SUBMITTED THAT THE ASSESSING OFFICER DID NOT GIVE ANY OPPORTUNITY TO EXAMINE THE REPORT OF DVO ON THE BASIS OF WHICH THE ADDITION WAS MADE. FURTHER, THE LD. A.R. SUBMITTED THAT THE VENDORS HAVE GIVEN IN WRITING THAT THEY HAVE NOT CHARGED ANY MONEY FOR THE SUPER STRUC TURE ON THAT PLOTS TO THE ASSESSEE. HOWEVER, HE FAIRLY ADMITTED THAT THERE IS NO MENTION OF ANY SUPER STRUCTURE IN THE SALE DEED OF THE LAND. HE FURTHER CLARIFIED THAT, IN FACT, THERE IS NO DISMAN TLING OF ANY SUPER STRUCTURE AND ONLY ALTERATIONS, REPAIRS AND SOME ADDITIONS WERE MADE FOR WHICH EXPE NSES WAS INCURRED WHICH WAS REFLECTED IN THE SUBSEQUENT ASSESSMENT YEAR. 10. AGAINST THIS, THE LD. D.R. SUBMITTED THAT FOR M AKING REFERENCE UNDER SECTION 142A NOW IT IS NOT LONGER NECESSARY THAT BOOK SHOULD BE REJECTE D AND IT IS NOT SO PROVIDED IN THAT SECTION. ACCORDING TO HIM IT WILL IMPOSE ADDITIONAL CONDITIO N, WHICH IS NOT LAID DOWN IN THE SECTION. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS CONCEALED T HE VITAL FACT IN THE SALE DEED THAT SUPER STRUCTURE WAS PASSED ON TO THE ASSESSEE ALONGWITH T HE LAND. THE SUPER STRUCTURE WAS NOT IN FACT TOTALLY DISMANTLING BUT IT WAS REPAIRED AND ADDITIO NS WERE MADE TO MAKE IT A SUITABLE FACTORY BUILDING. THUS THERE WAS A CLEAR CASE WHERE THE ASS ESSEE HAS RECEIVED FROM THE VENDORS SOMETHING MORE THAN FOR WHICH MONEY WAS NOT STATED TO BE PAID. THUS THERE IS A CLEAR CASE OF UNDERHAND TRANSACTION BETWEEN THE ASSESSEE AND THE VENDORS THEREBY THE ASSESSEE HAS RECEIVED SUPER STRUCTURE OVER THE LAND AND ACCORDINGLY IT SH OULD BE INFERRED THAT THE ASSESSEE PAID SOMETHING OVER AND OVER THE DECLARED PRICE. IN ANY CASE, ACCORDING TO THE LD. D.R. THERE IS A BASIC DIFFERENCE BETWEEN RECORDED PRICE PER SQ.MT. AND JANTRI PRICE. JANTRI @ RS.150/- PER SQ.MT. AS SETTLED BY THE STAMP VALUATION AUTHORITIES AFTER EXTENSIVE INVESTIGATION AND COMPARING THE MARKET RATE AND, THEREFORE, IT MUST BE HELD AS A B ATCH MARK. PRICE OF THE LAND CANNOT BE TREATED AT LOWER THAN THE VALUE AT WHICH THE STAMP VALUATION AUTHORITIES HAS VALUED IT. FURTHER, ACCORDING TO HIM, THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IS CRYPTIC AND DOES NOT DEAL WITH THE ISSUE REGARDING 142A AND ALLEGED REJE CTION OF THE BOOKS. THE LD. D.R. ALSO SUBMITTED THAT THE DECISIONS RELIED BY THE LD. A.R. ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AS THEY ARE DIFFERENT ON FACTS AND DIFFERENT P ROPOSITIONS ARE LAID DOWN THEREIN. 9 ITA NO. 3001-AHD-2008 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED THE CRYPTIC ORDER AND HAS NOT DISCUSSED VARIOUS ISSUES RAISED BEFORE HIM. HE HAS NOT DEALT WITH THE ISSUE REGARDING VALIDITY OF REFERENCE UNDER SECTION 142A AND ALSO THE ISSUE ON MERIT OF THE ADDITION ON THE BASIS OF DVOS REPORT. THE VITAL PO INT THAT HOW DVO COULD VALUE A PROPERTY AS ON DATE WHEN ORIGINAL PROPERTY PURCHASED BY THE ASS ESSEE WAS NOT EXISTING IS NOT DEALT WITH. FURTHER, THE LD. D.R. IS ALSO RIGHT IN SUBMITTING T HAT THE ASSESSEE HAS CONCEALED VITAL FACT IN THE SALE DEED THAT SUPER STRUCTURE WAS ALSO PASSED ON T O THE ASSESSEE FOR WHICH PRICE MUST HAVE BEEN PAID THOUGH NOT SHOWN IN THE SALE DEED. 12. SO FAR AS THE DECISIONS RELIED ON BY THE LD. A. R. ARE CONCERNED, WE ARE OF THE VIEW THAT RELIANCE THEREON ARE MISCONCEIVED. THE DECISION DAT ED 18.6.2010 IN FOREMOST FINVEST PRIVATE LIMITED IN ITA NO. 2826/AHD/2008 FOR THE ASSESSMENT YEAR 2005-06 WAS ON THE ISSUE WHETHER ADDITION UNDER SECTION 50C COULD BE MADE. SO FAR AS THE ADDITION UNDER SECTION 69B IS CONCERNED, THE FINDING IS THAT THERE SHOULD BE SOME EXTRA AMOU NT PAID. IN THE PRESENT CASE, NOT MENTIONING IN THE SALE DEED OF THE FACT OF SUPER STRUCTURE ALSO SOLD WHICH IS NOT FINALLY DISMANTLED CLEARLY SHOWS THAT THERE WAS AN UNDERHAND DEALING FOR SUPER STRUCTURE. IF SUPER STRUCTURE WAS DILAPIDATED AND WAS OF NO USE, IT WAS REQUIRED TO BE DISMANTLED BUT NOT TO REPAIRED. THE FACT THAT IT WAS REPAIRED AND EXTENDED SHOWS THAT IT HAD A VALUE FOR WHICH THE VENDORS MUST HAVE BEEN COMPENSATED. IT IS NOT A CASE THAT THERE WAS ONLY T RANSACTION IN RESPECT OF LAND ONLY. FOR THE LAND PRICES ARE SHOWN IN THE SALE DEED, BUT FOR THE SUPE R STRUCTURE PASSED ON TO THE ASSESSEE NOTHING IS SHOWN. THIS IS ENOUGH FOR THE ASSESSING OFFICER TO ACQUIRE JURISDICTION FOR MAKING REFERENCE UNDER SECTION 142A AS PER THE AUTHORITIES RELIED ON BY THE ASSESSEE. IN ANY CASE, THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CANNOT BE SUSTAINED AS SUCH AS IT HAS NOT CONSIDERED SEVERAL ISSUES INCLUDING THE EXAMINATION OF DVO AND THE VALUATION MADE BY HIM. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF LEARNE D COMMISSIONER OF INCOME TAX (APPEALS), WHO WILL EXAMINE THE DVO, COMPARE VARIOUS ITEMS MENTION ED BY HIM IN HIS REPORT FOR VALUING THE PROPERTY, FIND OUT FROM THE ASSESEEE AND FROM THE A SSESSING OFFICER THE EXTENT OF SUPER STRUCTURE PASSED ON TO THE ASSESSEE, TAKING INTO THE ACCOUNT OF JANTRI RATE AND THE RATE ADOPTED BY THE DVO AND WORK OUT THE MARKET RATE OF THE PLOT AND ALSO V ALUE OF THE SUPER STRUCTURE PASSED ON TO THE ASSESSEE AND REASONABLY WORK OUT THE UNDISCLOSED IN VESTMENT MADE BY THE ASSESSEE IN THE 10 ITA NO. 3001-AHD-2008 PURCHASE. ACCORDINGLY, WE RESTORE THE MATTER TO THE FILE OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), WHO WILL DECIDE THE ISSUES AFRESH AS OBS ERVED ABOVE. 13. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. THE ORDER WAS PRONOUNCED IN THE COURT ON 07.01.201 1 SD/- SD/- (MUKUL KUMAR SHRAWAT) (D.C . AGRAWAL) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED : 07 / 01 / 2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, (4) CIT CONCERNED, (5) D.R. , ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.