ITO, New Delhi V. M/s. Agile Properties Ltd., Delhi

ITA 3582/DEL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4746 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 26-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Assessee Lawyers: AJAY VOHRA SHRI GAURAV JAIN; BHAVITA KUMAR
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Cost of acquisition; Fair market value; Difference of opinion; Valuation report; Competent authority; Onus to prove
• Section: 50C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.3582/DEL/2010 ASSESSMENT YEAR : 2007-08 ITO, CO. WARD 1 (2), ROOM NO.398-B, CR BUILDING, IP ESTATE, NEW DELHI. VS. AGILE PROPERTIES LTD., PLOT NO.12, LOCAL SHOPPING COMPLEX, SECTOR B-1, VASANT KUNJ, DELHI. PAN : AAFCA1535N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY VOHRA, ADVOCATE, SHRI GAURAV JAIN, ADVOCATE & MS BHAVITA KUMAR, ADVOCATE. REVENUE BY : SHRI M.B. REDDY, CIT, DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSESSMENT YEAR 2007-08 AGAINST THE ORDER DATED 26.05.2010 PASSED BY T HE CIT (A)-IV, DELHI, TAKING THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING ADDITIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS A S: A) NO INTERLOCUTORY ORDER JUSTIFYING ADMITTANCE OF ADDITIONAL EVIDENCE WAS PASSED BY LD. CIT(A). B) THE ASSESSING OFFICER WAS NOT ALLOWED TO REFER THE ADDITIONAL EVIDENCE THE DVO FOR REBUTTAL ON TECHNICAL MATTERS OF VALUATION THAT THE ASSESSEE HAS RESORTED TO, AS HE ALONE IS THE COMPETENT AUTHORITY TO DO SO. ITA NO.3582/DEL/2010 2 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION MADE U/ S 69B IGNORING THE FACTS THAT: A) THE ASSESSEE WAS UNABLE TO DISCHARGE THE ONUS ON IT THAT VALUATION OF LAND DECLARED BY IT IS JUSTIFIED AND THIS FACT WAS DULY BROUGHT ON RECORD PRIOR TO REFERENCE TO THE DVO U/ S 14 2A. WITHOUT PREJUDICE TO THE SAME, THERE IS NO PRE-REQUISITE IN LAW OF THE NECESSITY TO HAVE EVIDENCE OF UNDER-STATEMENT OF INVESTMENT BEFORE MAKING A REFERENCE TO THE DVO. RELIA NCE IS PLACED ON THE DECISION IN CIT VS. BHAWANI SHANKER VY AS 311 ITR 8 (UTTRAKHAND HIGH COURT) DATED 18/11/2008. B) REFERENCE TO THE DVO WAS MADE AFTER THE ASSESSEE WAS UNABLE TO DISCHARGE THE ONUS ON IT THAT VALUATION OF LAND DECLARED BY IT IS JUSTIFIED; AND SUB-SECTION (3) TO SECTION 142A PROVIDES THAT THE ASSESSING OFFICER MAY TAKE INTO ACCOUN T DVO'S REPORT WHILE MAKING ASSESSMENT. C) THE VALUATION REPORT OF THE DVO IS NOT INSUFFICIENT E VIDENCE TO HOLD THE UNEXPLAINED INVESTMENT HAS BEEN MADE BY THE ASSESSEE. RELIANCE IS PLACED ON DECISION OF HON'BLE TRIBUNAL IN HANEMP PROPERTIES (P) LTD. VS. ACIT [2006] 101 ITD 1 9 (DELHI). 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN IGNO RING THE FACTS THAT REFERENCE WAS MADE BY THE ASSESSING OFFICER TO THE DVO U/ S 142A AND NOT U/ S 50C; AND THAT AS PER HIS RE PORT THERE WAS UNDER-STATEMENT IN PURCHASE AND SALE VALUE OF THE L AND. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS WHIL E GIVING A BLANKET JUDGEMENT TO ENHANCE THE COST OF ACQUISITION OF PLOT BY THE STAMP DUTY OF RS.1,79,550/- WITHOUT GOING INTO THE ME RITS OF DISALLOWANCE STATED BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER. 5. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. SO FAR AS REGARDS GROUND NO.1, WE FIND NO FORCE T HEREIN, SINCE A REMAND REPORT WAS DULY CALLED FOR BY THE LD. CIT (A) FROM THE ASSESSING OFFICER. THE ORDER UNDER APPEAL RECORDS THAT SUCH A REMAND REPORT DATED 08.04.2010 WAS FURNISHED BY THE ASSESSING OFFICER BEFORE THE LD. CIT (A). THE ASSESSEE FILED REJOINDER DATED 28.04.201 0. THE LD. CIT (A) DULY TOOK INTO CONSIDERATION THE ASSESSING OFFICERS REMA ND REPORT AND THE ASSESSEES REJOINDER, AS HAS BEEN RECORDED IN THE ORDE R UNDER ITA NO.3582/DEL/2010 3 APPEAL. THEREFORE, THERE REMAINS NO FORCE IN GROUND NO.1, WHICH IS HEREBY REJECTED. 3. APROPOS GROUND NO.2, THE ASSESSING OFFICER FOUND THE ASSESSEE COMPANY TO BE ENGAGED IN THE BUSINESS OF REAL ESTATE. DURING THE YEAR, IT HAD INVESTED IN AGRICULTURAL LAND. FROM TH E ASSESSEES BALANCE SHEET, THE ASSESSING OFFICER OBSERVED THE ASSESSEE TO HAVE PU RCHASED VARIOUS PIECES OF LAND, THE VALUE OF WHICH INVESTMENT HAD BEEN DETERMINED AT ` 5,22,78,028/-. AS PER THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE A REFERENCE U/S 142A OF THE IT AC T TO THE CONCERNED VALUATION OFFICER IN ORDER TO ASCERTAIN TH E ACTUAL VALUE OF THE INVESTMENT MADE BY THE ASSESSEE IN THE LANDS. ON OBTAINI NG THE DVOS REPORT, AN OPPORTUNITY WAS PROVIDED BY THE ASSESSIN G OFFICER TO THE ASSESSEE VIDE QUESTIONNAIRE DATED 24.12.2009 TO EXP LAIN WHY THE DIFFERENCE IN THE VALUATION MADE BY THE DVO AND THE AMOUNT SHOWN BY THE ASSESSEE AT ` 5,30,25,490/- BE NOT ADDED IN THE HANDS OF THE ASSESSEE COMPANY U/S 69B OF THE ACT. STATEMENT OF SHRI NAVEEN KUMAR GOYAL WAS RECORDED ON 20.08.2009. ON THE BASIS THEREOF, AS PER THE ASSESSING OFFICER, IT COULD BE OBSERVED THAT NO VALUATION REPORT HAD BEEN PREPARED CONCERNING THE LANDS PURCHASED BY T HE ASSESSEE, NOR WAS ANY SUCH REPORT AVAILABLE WITH THE ASSESSEE. T HE LAND WAS INSPECTED IN THE PRESENCE OF THE ASSESSEES REPRESENTATIVE AND SO, IT COULD NOT BE SAID THAT THE VALUATION WAS DONE AT THE BACK OF THE ASSESSEE. SINCE THE ASSESSEE HAD MADE INVESTMENTS AND THE AM OUNT SPENT EXCEEDED THE AMOUNT RECORDED IN THE ASSESSEES BOOK S OF ACCOUNT, AS PER THE ASSESSING OFFICER, THE PROVISIONS OF S ECTION 69 OF THE ACT GOT ATTRACTED. IT WAS OBSERVED THAT THE REFER ENCE TO THE DVO U/S 142A READ WITH SECTION 69B OF THE ACT WAS JUSTIFIE D, SINCE IN SPITE OF HAVING BEEN GRANTED OPPORTUNITIES, THE ASSESSEE HAD R EMAINED UNABLE TO ADEQUATELY EXPLAIN THE SOURCE, BUDGET AND VALUATION OF THE LAND. THE ASSESSING OFFICER PLACED RELIANCE ON VARIOUS CASE LAWS TO ITA NO.3582/DEL/2010 4 OBSERVE THAT IF PROPER EXPLANATIONS ARE NOT PROVIDED BY THE ASSESSEE, THE ASSESSING OFFICER IS ENTITLED TO MAKE ADDITIONS U/S 69B OF THE ACT. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE COM PANY HAD DELIBERATELY UNDERSTATED THE INVESTMENTS MADE BY IT IN ITS BOOKS OF ACCOUNT AND SO, THE ASSESSEES BOOKS OF ACCOUNT, BEING DEF ICIENT, COULD NOT BE RELIED ON, AS THEY DID NOT PORTRAY THE TRUE PICTURE OF FACTS AND FIGURES. THEREBY THE ASSESSING OFFICER REJECTED THE ASSESSE ES BOOKS OF ACCOUNT. BY VIRTUE OF THE IMPUGNED ORDER, THE L D. CIT (A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, BRINGING TH E DEPARTMENT BEFORE US BY WAY OF GROUND NO.2. 4. THE LD. DR HAS CONTENDED, WHILE FILING WRITTEN SUB MISSIONS ALSO, THAT WHEN THE ASSESSING OFFICER CALLED FOR EVIDENCE FRO M THE ASSESSEE TO SUPPORT THE INVESTMENT MADE BY THE ASSESSEE COMPANY, THE ASSESSEE FILED AS MANY AS TEN PURCHASE DEEDS, CUMULATIVELY AMOUNTING TO ` 5,21,44,150/-; THAT THE ASSESSEE HAD ACCOUNTED FOR INVESTMENTS AT ` 522,78,280; THAT THUS, A DISCREPANCY OF ` 1,34,130/- WAS NOTICED; THAT IT WAS ON THE BASIS OF THIS DISCREPAN CY THAT, IN ORDER TO ASCERTAIN THE ACTUAL VALUE OF THE INVESTMENTS, THE ASSESSING OFFICER MADE A REFERENCE U/S 142A OF THE ACT TO THE VALUATIO N OFFICER; THAT THE DVO DETERMINED THE VALUE OF THE ASSESSEES INVESTMENT IN LANDS AT ` 10,51,69,640/-; THAT IT WAS THEREUPON, THAT A SHOW C AUSE NOTICE WAS ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE, ASKING FOR T HE ASSESSEES EXPLANATION AND IT WAS AFTER CONSIDERING THE ASSE SSEES EXPLANATION TO BE NOT MAINTAINABLE THAT THE ASSESSING O FFICER MADE THE ADDITION; THAT IN THE STATEMENT OF SHRI NAVEEN GOYAL , THE ASSESSING OFFICER HAD ASKED SPECIFIC QUESTIONS ABOUT THE VALUATIO N OF LAND (QUESTIONS 8 TO 18); THAT SHRI NAVEEN GOYAL HAD GIVEN ONLY EVASIVE ANSWERS REGARDING THE VALUATION AND FINANCING OF THE INVESTMENTS IN THE LAND; THAT SO, ANOTHER DIRECTOR OF THE ASSESSEE COMP ANY, MR. SANJAY MITTAL WAS SUMMONED BY THE ASSESSING OFFICER; THA T MR. SANJAY ITA NO.3582/DEL/2010 5 MITTAL, HOWEVER, DID NOT COMPLY; THAT THE ASSESSING OFF ICER AGAIN ASKED THE ASSESSEE TO PRODUCE VALUATION REPORTS IN RESPECT OF T HE PURCHASE OF LAND; THAT IN REPLY, THE ASSESSEE STATED THAT NO VALUATI ON REPORT HAD BEEN PREPARED; THAT IN THE FIRST APPELLATE PROCEEDIN GS, THE LD. CIT (A) FRAMED TWO QUESTIONS IN THIS REGARD, I.E., WHETHER THE RE WAS A CASE FOR THE ASSESSING OFFICER TO REFER THE MATTER TO THE DVO A ND WHETHER THE REPORT OF THE DVO WAS SUFFICIENT TO ENABLE ADDITION U /S 69B OF THE ACT; THAT APROPOS THE FIRST QUESTION, THE LD. CIT (A) WRONG LY REFERRED TO THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF SHRI R. N. GUPTA IN ITA NO.198/2008, FOR THE PROPOSITION THAT THERE SHOULD BE SOMETHING ON RECORD TO SHOW THAT THE ASSESSEE, IN THE FIRST PLACE, HAD MADE SUCH INVESTMENT; THAT THE LD. CIT (A) ALSO WRONGLY RELIED ON THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF DCIT VS. SEEMA GUP TA IN ITA NO.1619 & 1774/DEL/2008; THAT THE LD. CIT (A) HAS ERRONEOUSLY OVERLOOKED THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF HANEMP , 109 ITD 19 (DEL), WHEREIN, RELYING ON THE DECISION OF THE HONB LE DELHI HIGH COURT IN THE CASE OF RAJA SUGAR, 130 ITR 421 (DEL), IT H AS BEEN HELD THAT IT IS NOT POSSIBLE TO PROVE PAYMENT OF ON MONEY IN EVERY C ASE; THAT BEFORE THE ASSESSING OFFICER MADE REFERENCE TO THE DVO, THE RE PRESENTATION OF THE ASSESSEE WAS EXAMINED, ASKING IF THE SELLERS OF THE LAN D COULD BE IDENTIFIED AND PROVED; THAT IN RESPONSE, INABILITY TO DO SO WAS EXPRESSED; THAT SINCE THE ASSESSEE THUS REFUSED TO COOPERATE WITH THE ASSESSING OFFICER, THE ASSESSING OFFICER RIGHTLY REFERRED T HE MATTER TO THE DVO FOR ASCERTAINING THE CORRECT VALUE OF THE LA ND; THAT ADVERTING TO THE QUESTION OF THE ADDITION MADE BY THE ASSESSING OF FICER ON THE BASIS OF THE DVOS REPORT, THE LD. CIT (A) REFERRED TO THE CASE OF K.P. VARGHESE, 131 ITR 257 (SC); THAT IN THAT CASE, THE H ONBLE SUPREME COURT CONSIDERED THE QUESTIONS ARISING OUT OF THE APPL ICATION OF THE NOW OMITTED SECTION 52 (2) OF THE ACT FOR DETERMINA TION OF CAPITAL GAIN; THAT THE FACTS OF THAT CASE, EVIDENTLY, ARE ENTIRELY DIFFERENT FROM THE PRESENT ONE; THAT IN THAT CASE, THE ASSESSEE HAD SOLD HIS H OUSE TO HIS ITA NO.3582/DEL/2010 6 DAUGHTER-IN-LAW FOR THE SAME SUM AS AT WHICH HE HAD PU RCHASED IT, I.E., ` 16,500/-; THAT IN THE RETURN, THE ASSESSEE HAD NOT IN CLUDED ANY AMOUNT BY WAY OF CAPITAL GAIN IN RESPECT OF THE TRA NSFER OF THE HOUSE; THAT IN RE-ASSESSMENT PROCEEDINGS, THE ITO FIXED THE FAI R MARKET VALUE OF THE HOUSE AT ` 65,000/- AND ASSESSED THE DIFFERENCE OF ` 48,500/- AS CAPITAL GAIN IN THE ASSESSEES HANDS, BY APPLYING THE PRO VISIONS OF THE THEN SECTION 52 (2) OF THE ACT; THAT IT WAS IN THESE CIRCUMSTANCES, THAT THE HONBLE SUPREME COURT HELD THAT A FAIR AND REASO NABLE CONSTRUCTION OF SECTION 52 (2) OF THE ACT WOULD BE T O READ INTO IT A CONDITION THAT IT WOULD APPLY ONLY WHERE THE CONSIDE RATION FOR THE TRANSFER IS UNDERSTATED OR, IN OTHER WORDS, THE ASSESSEE H AS ACTUALLY RECEIVED A LARGER CONSIDERATION FOR THE TRANSFER THAN WHAT IS DECLARED IN THE INSTRUMENT OF TRANSFER AND IT WOULD BE NOT APPLIC ABLE IN THE CASE OF A BONA FIDE TRANSACTION WHERE THE FULL VALUE OF THE CONSIDERATION FOR THE TRANSFER IS CORRECTLY DECLARED BY THE ASSESSEE, UNLIKE IN THE CASE AT HAND; THAT IN THAT CASE, THERE WAS AN ALLEGATION OF U NACCOUNTED INVESTMENT MADE BY THE ASSESSEE AND IT WAS ON THE TECHNIC AL APPLICATION OF THE LEGAL PROVISION TO DETERMINE THE QUANTUM OF CAPITAL GAIN, THAT THE HONBLE SUPREME COURT HAD EXPRESSED IT S VIEW; THAT THE LD. CIT (A) HAS RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASES OF VINOD SINGHAL, NILOFER KHAN AND AAR PEE INVESTMENTS, BESIDES OTHERS, LIKE NAVEEN GERA, MAHESH KUMAR AND BAJR ANG LAL BANSAL; THAT IN ALL THESE CASES, THE RATIO IS THAT IN TH E ABSENCE OF ANY INCRIMINATING EVIDENCE, THE VALUATION DONE BY THE D VO CANNOT BE APPLIED TO DETERMINE UNEXPLAINED INCOME/INVESTMENT; THAT ALL THESE JUDGEMENTS HAVE BEEN APPLIED IN A HIGHLY MECHANICAL MANNER; THAT THESE JUDGEMENTS CANNOT BE APPLIED IN THE PRESENT CASE, AS IN THE PRESENT CASE, IT IS NOT JUST THE VALUATION REPORT THAT INDICATES UNEXPLAINED INVESTMENT, RATHER THERE ARE OTHER INCR IMINATING CIRCUMSTANCES THAT LED TO THE SAME CONCLUSION; THAT THE RE IS THE DISCREPANCY BETWEEN THE STATED VALUE OF THE INVESTMENT AND THE VALUE ITA NO.3582/DEL/2010 7 AS EVIDENCED BY THE PURCHASE DEEDS; THAT THERE IS THE ST ATEMENT OF NAVEEN GOYAL CLEARLY SHOWING EVASIVENESS WHEN HE STATED THAT THE COMPANY COULD NOT PRODUCE THE SELLERS, BUT CONFIRMED THE PRICE PAID BY THEM; THAT NON-COMPLIANCE BY ANOTHER DIRECTOR OF TH E ASSESSEE COMPANY TO THE SUMMONS ISSUED TO HIM ALSO INDICATES EVASI VENESS; THAT IN THE CASE OF FIVE STAR HEALTH CARE, 42 SOT 153 (DEL), WHERE THE CIRCLE RATE WAS HIGHER THAN THE RATE DECLARED IN THE PURCHASE DEED, THE ASSESSING OFFICER WAS HELD JUSTIFIED IN MAKING A REFERENC E TO THE DVO U/S 142A OF THE ACT; THAT IN THE CASE OF HANEMP PROP ERTIES, 101 ITD 19 (DEL), IT WAS HELD THAT WHERE THERE IS A SIGNIFICA NT UNDER-VALUATION OF IMMOVABLE PROPERTY IN THE DISCLOSED APPARENT CONSIDERA TION, THERE WOULD BE A REBUTTABLE PRESUMPTION OF UNDERSTATEMENT O F CONSIDERATION ALSO AND THAT, THEREFORE, THE ARGUMENT THAT NO MATTE R WHAT THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF THE PRO PERTY AND THE APPARENT CONSIDERATION DISCLOSED BY THE PARTIES IS THER E OUGHT TO BE FURTHER POSITIVE EVIDENCE OF ANY CONCEALED SUPPRESSED C ONSIDERATION BEING PAID TO THE TRANSFEROR BY THE TRANSFEREE, FOR M AKING ASSESSMENT OF UNDISCLOSED INVESTMENT, IS NOT LEGALLY TENABLE; AND THAT IN THE PRESENT CASE, THE VALUE DECLARED BY THE ASSESSEE IS EVEN L ESS THAN THE CIRCLE RATE AND THE PLOTS PURCHASED ARE CONTIGUOUS AN D NEXT TO A FOUR LANE CARRIAGE WAY, JUSTIFYING THE SOLATIUM AMOUNT. 5. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, FOR THIS ISSUE, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER . IT HAS BEEN CONTENDED THAT IN ORDER TO MAKE A REFERENCE TO THE DVO, IT IS ESSENTIAL FOR THE ASSESSING OFFICER TO HAVE SOME MATERIAL FOR MAK ING SUCH REFERENCE; THAT IN THE PRESENT CASE, THE ASSESSING OFFICE R DID NOT HAVE ANY SUCH MATERIAL BEFORE HIM TO MAKE THE REFERENCE T O THE DVO AND THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSING OFF ICER FOUND THAT THE AMOUNT OF INVESTMENT MADE BY THE ASSESSEE EXCEE DED THE AMOUNT ENTERED IN THE BOOKS OF ACCOUNT OR THAT EITHE R THE ASSESSEE DID ITA NO.3582/DEL/2010 8 NOT OFFER ANY EXPLANATION ABOUT SUCH EXCESS AMOUNT, O R THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT SATISFACTORY ; THAT THEREFORE, THE REFERENCE MADE BY THE ASSESSING OFFICER TO THE DVO WAS BAD IN LAW; THAT EVEN IN K.P. VARGHESE (SUPRA), THE HONBLE SUPREME COURT HELD THAT THE BURDEN TO PROVE THAT THE CONSIDE RATION FOR THE TRANSFER OF A CAPITAL ASSET HAS BEEN UNDERSTATED BY THE ASSESSEE, IS ON THE REVENUE; THAT MOREOVER, THE DVOS REPORT IS ONLY AN ESTIMATE AND IT COULD NOT BE USED FOR MAKING ANY ADDITION U/S 69B OF THE ACT; THAT THE LD. CIT (A) HAS CORRECTLY RELIED ON THE CASE LAWS CITED BY THE ASSESSEE TO HOLD THAT IT WAS NOT A FIT CASE FOR REFERENCE TO BE MADE BY THE ASSESSING OFFICER TO THE DVO U/S 142A OF THE ACT FOR THE PURPOSES OF SECTION 69B THEREOF. 6. WE HAVE HEARD THE PARTIES ON THIS ISSUE WITH REFERE NCE TO THE MATERIAL PLACED ON RECORD. DURING THE YEAR, THE ASSE SSEE COMPANY BOUGHT VARIOUS AGRICULTURAL LANDS LOCATED IN THE AREA OF TEHSIL NAJAFGARH, DELHI, FOR AN AGGREGATE AMOUNT OF ` 5,22,78,280/-, WHICH AMOUNT WAS DULY ENTERED IN THE BOOKS OF ACCOUNT OF T HE ASSESSEE COMPANY. THE ASSESSING OFFICER, VIDE ORDER DATED 31.1 2.2009, PASSED U/S 143 (3) OF THE IT ACT, MADE AN ADDITION OF ` 5,30,25,490/-, ON THE BASIS OF ESTIMATED MARKET VALUE OF THE LAND, AMOUNTING TO ` 10,51,69,640/-, ARRIVED AT BY THE DVO, PURSUANT TO R EFERENCE MADE U/S 142A OF THE ACT, BEING THE DIFFERENCE BETWEEN THE E STIMATED MARKET VALUE OF THE LAND AND THE AMOUNT RECORDED BY THE ASSE SSEE IN ITS BOOKS OF ACCOUNT. THE ADDITION WAS MADE ON ACCOUNT OF UNEX PLAINED INVESTMENT U/S 69B OF THE ACT. 7. NOW, AS PER SECTION 69B OF THE ACT, THE REQUIREME NTS WHICH NEED TO BE SATISFIED ARE THAT THE ASSESSEE HAS MADE INVESTMENT, OR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE AND IT IS FOUND THAT THE INVESTMENT EXCEEDS THE ITA NO.3582/DEL/2010 9 CORRESPONDING AMOUNT RECORDED IN THE BOOKS OF ACCOUNT AND EITHER THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT, OR THE EXPLANATION OFFERED IS NOT SATISFACTORY. THUS, THE SINE QUA NON U/S 69B OF THE ACT IS FOR THE ASSESSING OFFICER TO REACH A FINDI NG, ON THE BASIS OF EVIDENCE, THAT THE ASSESSEE HAS MADE INVESTMENT OUTSIDE IT S BOOKS OF ACCOUNT. ONLY ON THE BASIS OF SUCH A FINDING CAN AN ADDITION BE MADE U/S 69B. SO FAR AS REGARDS INVESTMENT OVER AND ABOVE TH AT RECORDED IN THE BOOKS OF ACCOUNT, THE ONUS, RATHER THE BURDEN, I S ON THE DEPARTMENT TO PROVE SUCH ALLEGATION, AS HAS BEEN HELD IN, INTER ALIA , CIT VS. DAULAT MAL RAWAT MAL, 87 ITR 349 (SC), K. P. VERGHESE VS. ITO, 131 ITR 597 (SC) AND CIT VS. BEDI & CO. (P) LTD., 230 ITR 580 (SC). THE DEPARTMENT HAS ARGUED THAT IN THE PRESENT CASE, TH E ASSESSEE DID NOT COOPERATE IN THE ASSESSMENT PROCEEDINGS WITH THE ASSESSI NG OFFICER AND SO, THE ONUS ON THE DEPARTMENT IS DEEMED T O HAVE BEEN DISCHARGED. IN THIS REGARD, IT IS SEEN THAT BEFORE MA KING THE REFERENCE TO THE DVO, THE ASSESSING OFFICER EXAMINED ONE OF THE REPRESENTATIVES OF THE ASSESSEE, ASKING IF THE SELLERS COULD BE IDENTIFIED AND PRODUCED. TO THIS, HE EXPRESSED HIS INABILITY. IT IS SEEN THAT IN THE SALE DEED (COPY AT APB 13-36), THE NAME AND ADDRESS OF THE SELLE R IS VERY MUCH THERE. THIS SALE DEED HAD BEEN DULY PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER RECORDED, U/S 131 OF TH E ACT, A STATEMENT OF SHRI NAVEEN KUMAR GOYAL, ONE OF THE DIR ECTORS OF THE ASSESSEE COMPANY, ON 20.08.2009. THEREIN, A SPECIFIC QUE STION (QUESTION 12) WAS ASKED AS TO IF THE DEPONENT COULD ID ENTIFY AND PRODUCE THE SELLERS OF THE LAND. SHRI GOYAL RESPONDE D BY SAYING THAT HE COULD NOT PRODUCE THE SELLERS. NOW, WHEN UNDISPUTE DLY, THE DETAILS OF THE SELLERS OF THE LAND TO THE ASSESSEE WERE ON RECOR D BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAD ALL POWER T O MAKE INQUIRY UNDER THE ACT FROM SUCH SELLERS AND THE ASSESSING OFFICER, FOR REASONS BEST KNOWN TO HIM, DID NOT MAKE ANY SUCH INQUI RY, THE ONUS ON THE DEPARTMENT TO PROVE THAT THE INVESTMENT MADE BY THE ASSESSEE ITA NO.3582/DEL/2010 10 WAS IN FACT MORE THAN THAT DEPICTED IN ITS BOOKS OF AC COUNT, DID NOT GET DISCHARGED AT ALL. IN THE FOLLOWING CASES, AS CORRECTL Y NOTED BY THE LD. CIT (A), IT HAS BEEN HELD THAT THE ONUS IS ON THE REV ENUE TO SUBSTITUTE APPARENT CONSIDERATION AND THAT ADDITION U/S 69B OF T HE ACT CAN BE MADE ONLY ON THE BASIS OF POSITIVE MATERIAL OR EVIDENC E REGARDING CONSIDERATION IN EXCESS OF WHAT IS RECORDED IN THE BOOK S AS HAVING BEEN PAID AND THAT NO ADDITION U/S 69B OF THE ACT CA N BE MADE SIMPLY ON THE BASIS OF DIFFERENCE OF OPINION AS TO THE MARKET VALUE OF THE ASSET:- I) CIT VS. BANWARILAL MURWATIYA, 2008-TIOL-124-HC-RAJ -IT II) SANJAY CHAWLA VS. ITO, 89 ITD 586-606 III) ITO VS. SATYANARAYAN AGARWAL, 112 TTJ 717 (JD) IV) JAI MARWAR CO. (P) LTD. VS. ACIT, 79 TTJ 178 (JD) V) DILSHAD TRADING CO. (P) LTD. VS. ITO, 49 ITD 348 (B OM) 8. IT IS ONLY ON THE BASIS OF A DEFINITE FINDING OF TH E ASSESSING OFFICER TO THE FOREGOING EFFECT THAT A REFERENCE CAN BE MAD E TO THE VALUATION OFFICER U/S 142A OF THE ACT. IT GOES WITHOUT SAYING THAT THE PROVISIONS OF SECTION 142A(1) OF THE ACT ARE MERELY MACHINERY PROVISIONS AND THE SUBSTANTIVE PROVISIONS OF SECTION 69B CANNOT BE OVERRID DEN BY THEM. IN THE PRESENT CASE, ON THE OTHER HAND, UNDISPUTEDLY , THE ASSESSING OFFICER DID NOT HAVE ANY SUCH MATERIAL BEFORE HIM, W HICH COULD FORM THE BASIS FOR REFERENCE BEING MADE TO THE DVO U/S 142A OF THE ACT, AS HAS BEEN RIGHTLY HELD BY THE LD. CIT (A). 9. FOR THE FOREGOING DISCUSSION, WE DO NOT FIND ANY FO RCE IN THE CASE TRIED TO BE MADE OUT BY THE DEPARTMENT IN SUPPORT OF ITS GROUND NO.2. ACCORDINGLY, GROUND NO.2 RAISED BY THE DEPARTMENT IS REJECTED. ITA NO.3582/DEL/2010 11 10. THE DEPARTMENT, BY WAY OF GROUND NO.3 AND 4 HA S ALSO CHALLENGED THE ACTION OF THE LD. CIT (A) IN DIRECTI NG THE ASSESSING OFFICER TO RECOMPUTE THE SHORT-TERM CAPITAL GAIN COM PUTED ON THE PLOT OF LAND PURCHASED AND SOLD BY THE ASSESSEE, BY TAKING THE COST OF THE PLOT AT ` 12 LAC AND ALSO TO INCLUDE THE STAMP DUTY TOWARDS TH E COST OF ACQUISITION, BY ADDING THE STAMP DUTY REDUCED FOR ARR IVING AT THE SHORT- TERM CAPITAL GAIN IN VIEW OF THE PROVISIONS OF SECTIO N 50C OF THE IT ACT, HOLDING THAT THERE WAS ALSO NO JUSTIFICATION FOR ADDIN G THE VARIOUS AMOUNTS TOWARDS SALE OF LAND OVER AND ABOVE THE STAMP D UTY RATES. 11. THE ASSESSEE, DURING THE YEAR, HAD SOLD LAND MEASURI NG 1.26 ACRES IN VILLAGE KHAIRA FOR ` 12 LAC AS AGAINST PURCHASE COST OF ` 13,75,550/-. THE ASSESSING OFFICER OBSERVED THAT SINCE T HE PURCHASE COST HAD BEEN UNDERSTATED BY AN AMOUNT OF ` 29,80,511/-, CORRESPONDINGLY THE SALE PRICE WAS ALSO UNDERSTATED BY A N EQUAL AMOUNT OF ` 29,80,511/-, DUE TO WHICH, ACCORDING TO THE ASSESSING OFFICER THE SHORT-TERM CAPITAL GAIN OF ` 29,80,511/- HAD ALSO BEEN UNDERSTATED BY THE ASSESSEE IN ITS RETURN OF INCOME. THE LD. CIT (A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 12. IN THIS REGARD, IT HAS BEEN CORRECTLY FOUND THAT THE ASSESSING OFFICER HAD ERRED IN TAKING THE COST OF ACQUISITION W ITHOUT CONSIDERING THE STAMP DUTY TOWARDS SUCH COST OF ACQUISITION. THE SA LE CONSIDERATION WAS ALSO TAKEN AT A RATE HIGHER THAN THE CIRCLE RATE. THUS, WHEREAS THE STAMP DUTY PAYABLE AND THE CORRECT SA LE CONSIDERATION, BASED ON THE CIRCLE RATES, AS PER THE P ROVISIONS OF SECTION 50C OF THE ACT WERE TO BE CONSIDERED. THIS ERROR HAS APPROPRIATELY BEEN RECTIFIED BY THE LD. CIT (A) WHI LE DIRECTING THE ASSESSING OFFICER TO RECOMPUTE THE STCG BY TAKING THE C OST OF PLOT AT ` 12 LAC TO INCLUDE THE STAMP DUTY TOWARDS THE COST OF ACQUISITION. THE LD. CIT (A) ALSO CORRECTLY DIRECTED TO APPLY THE STAM P DUTY RATES TO THE ITA NO.3582/DEL/2010 12 SALE PRICE OF THE PLOT FOR ARRIVING AT THE STCG IN V IEW OF THE PROVISIONS OF SECTION 50C OF THE ACT, WHILE CORRECTLY HOLDING ADDITION OF VARIOUS AMOUNTS TOWARDS SALE OF LAND OVER AND ABOVE THE STAMP D UTY RATES, TO BE NOT JUSTIFIABLE, AS PER THE PROVISIONS OF SECTION 5 0C OF THE ACT. 13. THEREFORE, GROUND NOS.3 AND 4 ARE ALSO REJECTED.0 M, 14. GROUND NO.5 IS GENERAL. 15. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.20 13. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 27.08.2013. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES