Shri Ajit Singh Bagga, New Delhi V. DCIT, New Delhi

ITA 3614/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3660 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 28-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI
• Keywords: Fair market value; Valuation report
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER & SHRI B.K. HALDAR, ACCOUNTANT MEMBER ITA NO. 3614/DEL/2010 ASSESSMENT YEAR: 2006-07 AJIT SINGH BAGGA, VS. DCIT, M-274, GURU HARKRISHAN NAGAR, CIRCLE 39(1), NEW DELHI. NEW DELHI. AFAPB7451D (APPELLANT) (RESPONDENT) & ITA NO. 3905/DEL/2010 ASSESSMENT YEAR: 2006-07 ACIT, VS. AJIT SINGH BAGGA, CIRCLE 38(1), M-274, GURU HARKRISHAN NAGAR, ROOM NO. 212, C.R. BLDG., NEW DELHI. NEW DELHI. AFAPB7451D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHOK KHANDELWAL, CA RESPONDENT BY : MS. BANITA DEVI, SR. DR ORDER PER I.P. BANSAL, J.M. THESE ARE CROSS APPEALS AND THEY ARE DIRECTED AGAI NST ORDER PASSED BY LD. CIT(A) DATED 29.03.2010 FOR A.Y. 200- 07. GROUNDS OF APPEAL IN BOTH THE APPEALS READ AS UNDER: - ITA NOS. 3614 & 3905/DEL/2010 2 GROUNDS OF ASSESSEES APPEAL : - 1. ACTION OF THE CIT(A) IN MAKING AN ADDITION OF RS. 1902033/- ON ACCOUNT OF INVESTMENT IN BUILDING (BEING THE DIF FERENCE BETWEEN ESTIMATED COST OF CONSTRUCTION/FAIR MARKET VALUE AS PER DVO RS. 4952033/- AND THE VALUE DECLARED BY THE ASSESSEE RS. 30,50,000/-), WHICH WAS NOT MADE BY TH E AO IN THE ASSESSMENT ORDER IN UNJUST, ILLEGAL, ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 33,61,334/- AS UNDISCLOSED INVESTMENT U/S 69B OF TH E INCOME TAX ACT, 1961 IS UNJUST, ILLEGAL, ARBITRARY AND AGA INST THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUNDS OF REVENUES APPEAL : - WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A)WAS JUSTIFIED IN DIRECTING TO CALCULATE NET P ROFIT @ 6% OF TOTAL RECEIPTS AS AGAINST 8% ADOPTED BY AO IGNORING THAT ASSESSEE DID NOT PRODUCED NEITHER ANY VOUCHERS NOR BOOKS OF ACCOUNTS BEFORE THE AO. A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12 ,57,309/- MADE ON ACCOUNT OF DISALLOWANCE OF CERTAIN EXPENSES WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE COULD NOT FU RNISH BOOKS OF ACCOUNT DESPITE SEVERAL OPPORTUNITIES GIVEN. B) THE APPELLANT CRAVES TO ADD, AMEND OR MODIFY THE GR OUNDS OF APPEAL AT ANY TIME. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONST RUCTION AND IS PROPRIETOR OF M/S AJIT CONSTRUCTION COMPANY AND THE TURNOVER OF THE ASSESSEE IS 1,86,17,432/- AND THE NET PROFIT AS CAL CULATED BY THE AO IS ITA NOS. 3614 & 3905/DEL/2010 3 4.71% AS COMPARED TO PRECEDING YEARS FIGURE OF 69,3 7,153/- WITH A NET PROFIT OF 5.62%. 3. THE AO HAS NOTED IN PARA 15 OF THE ASSESSMENT OR DER THAT VARIOUS OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE AND ELEVEN EFFECTIVE HEARINGS HAD TAKEN PLACE AND ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND VOUCHERS FOR EXPENSES AND THU S, THEY HAVE REMAINED UNVERIFIED. THE AO ALSO OBSERVED THAT SIN CE TIME BARRING ACTION IS INVOLVED HE HAS CONSTRAINED TO COMPLETE A SSESSMENT CONSIDERING THE MATERIAL AVAILABLE ON RECORD. IN P ARA 16 HE HAS NOTED THAT ASSESSEE HAS CLAIMED VARIOUS EXPENSES AGGREGAT ING TO A SUM OF RS. 62,86,546/- THE DETAILS OF WHICH ARE AS UNDER: - 1. DUMPER MACHINERY REPAIR MAINTENANCE 12,35,596/- 2. LABOUR CHARGES 45,52,154/- 3. BUSINESS PROMOTION 1,47,850/- 4. TOUR & TRAVELING 3,50,946 /- 62,86,546 /- 4. TAKING NOTE OF THE FACT THAT ASSESSEE DID NOT PR ODUCE VOUCHERS FOR THE EXPENSES AND EXPENSES BEING REMAINED UNVERI FIABLE HE DISALLOWED 20% OF THE AFOREMENTIONED AGGREGATED SUM AND COMPUTED THE DISALLOWANCE AT RS. 12,57,309/- WHICH HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE APART FROM OTHER ADDI TIONS WHICH ARE IN ITA NOS. 3614 & 3905/DEL/2010 4 THE SHAPE OF DISALLOWANCE ON ACCOUNT OF CAR EXPENSE S AND TELEPHONE EXPENSES OF THE AMOUNTS OF RS. 62,741/- & 25,866/- RESPECTIVELY. 5. FURTHER AO HAS ALSO ADDED A SUM OF RS. 1,22,87,8 50/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE PROPERTY N AMELY NO. M-125, GURU HARKRISHAN NAGAR. THE SAID PROPERTY IS MEASUR ING 339.73 SQ. YD. WHICH WAS SHOWN TO HAVE BEEN PURCHASED FOR A CO NSIDERATION OF RS. 30 LAKH ON 22 ND AUGUST, 2005 AND APPROXIMATE PURCHASE PRICE INCURRED BY THE ASSESSEE ON THE SAID AMOUNT HAS BEE N COMPUTED BY THE AO AT RS. 8,843/- PER SQ. YD., IF THE VALUE PAID BY THE ASSESSEE IS TAKEN ONLY TO BE PAID FOR LAND AND NOT FOR THE BUILDING C ONSTRUCTED THEREON. ACCORDING TO AO, THE LAND RATE WAS IN THE PROXIMITY OF RS. 45,000/- PR. SQ. YD. AS PER VALUATION BY TWO VALUERS IN THE SAME AREA. THE AO NOTICED THAT ICICI BANK FROM WHOM THE ASSESSEE HAD OBTAINED LOAN HAD ALSO GOT VALUATION DONE OF THE SAID LAND FROM T HE APPROVED VALUER NAMELY M/S PROTOCOL SURVEYORS AND ENGINEERS PVT. LT D., WHO VALUED THE SAID LAND AT RS. 1,12,50,000/- AND TOTAL VALUE OF THE PROPERTY AS ON 10.6.2005 WAS VALUED AT RS. 1,29,50,000/-. IT WAS ALSO NOTICED THAT WHEN ASSESSEE HAD APPLIED BANK LOAN HAD ALSO FILED VALUATION REPORT PREPARED BY M/S CSV TECHNO SERVICES PVT. LTD. WHICH WAS DATED 11.06.2005 WHICH HAS VALUED THE PROPERTY NO. M-274, GURU HARKRISHAN NAGAR MEASURING 250 SQ. YD. AT THE VALUE OF RS. ITA NOS. 3614 & 3905/DEL/2010 5 1,28,45,000/- AND THE VALUE OF LAND COMPONENT WAS S HOWN AT RS. 1,12,50,000/- GIVING LAND RATE OF RS. 45,000/- PER SQ. YD. AS ON 11.6.2005. BASED ON THESE TWO VALUATION REPORTS TH E AO OBSERVED THAT THE VALUE OF THE LAND PURCHASED BY THE ASSESSEE WAS NOT LESS THAN RS. 45,000/- PER SQ. YD. AND THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THE VALUE OF THE LAND SHOULD NOT BE TAKEN AT RS. 45 ,000/- PER SQ. YD. ACCORDING TO WHICH THE VALUE OF LAND PURCHASED BY T HE ASSESSEE WILL COME TO RS. 1,52,87,850/- AND THE DIFFERENCE IN THE INVESTMENT MADE BY THE ASSESSEE WILL COME TO RS. 1,22,87,850/- (RS. 1,52,87,850/- - RS. 30,00,000/-) AND THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAME MAY NOT BE TREATED AS UNDISCLOSED INVESTMENT U/S 69 B OF THE INCOME TAX ACT, 1961. 6. IN RESPONSE TO SUCH SHOW CAUSE ISSUED BY THE AO, THE ASSESSEE FILED PHOTOCOPY OF AN AGREEMENT TO SELL WHICH WAS D ATED 28 TH AUGUST, 2003 AND WAS ON A PLAIN PAPER SHOWING AN AGREEMENT OF THE ASSESSEE WITH THE OWNER SHRI MADAN LAL FOR PURCHASE OF THE S AID PROPERTY FOR A TOTAL CONSIDERATION OF RS. 30,00,000/-. ACCORDIN G TO AO, SUCH DOCUMENT HAD NO EVIDENTIARY VALUE AS THE SAID DOCUM ENT DOES NOT SHOW ANY ADVANCE PAID FOR THE TRANSACTION AND ON TH E GROUND THAT THE SAID AGREEMENT WAS NOT REGISTERED ONE. ITA NOS. 3614 & 3905/DEL/2010 6 7. VIDE LETTER DATED 4.12.2008, THE ASSESSEE INFORM ED THAT HE WAS IN THE POSSESSION OF THE SAID PROPERTY SINCE 1997 A S A LAWFUL TENANT AND THERE WAS A DISPUTE BETWEEN THE ASSESSEE AND TH E LANDLORD ON PERSONAL AND SOCIAL MATTERS WHICH RESULTED INTO THE DISRUPTION OF RELATIONSHIPS WITH NO COMMUNICATION AND THERE WAS N O OUTFLOW OF RENT BY THE ASSESSEE SINCE 1998. ON CONSISTENT INT ERVENTION BY PEOPLE OF REPUTE, THE MATER WAS RESOLVED IN AUGUST, 2003 WHEN A COMPROMISE WAS ARRIVED AT BETWEEN THE ASSESSEE AND THE LAND OWNER FOR A TOTAL CONSIDERATION OF RS. 30,00,000/- AND TA KING RECOURSE TO THESE CIRCUMSTANCES, IT WAS CLAIMED THAT PROPERTY H AS RIGHTLY BEEN PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF RS . 30 LAKH. IT WAS SUBMITTED THAT SO AS IT RELATES TO PROPERTY NO. M-2 74, GURU HARKRISHAN NAGAR, THE SAME BELONG TO ASSESSEES FAT HER AND VALUATION WAS DONE BY THE BANKS AND THE CRITERIA BASIS ON WHI CH SUCH VALUATION WAS DONE IS NOT KNOWN TO THE ASSESSEE. 8. THE AO DISBELIEVED THE EXPLANATION OF THE ASSESS EE ON THE GROUND THAT IT IS A STORY WHICH IS NOT SUPPORTED BY ANY FACTS OR EVIDENCES. THE ASSESSEE HAS CULLED OUT SUCH STORY WITH THE SOLE AIM OF JUSTIFYING THE SALE CONSIDERATION OF RS. 30 LAKH AS AGAINST THAT PREVAILING MARKET PRICE OF LAND AT RS. 1,52,87,850/ -, WHICH IS BASED ON ASSESSEES OWN VALUATION AS ON 11.6.2005 AND THU S, TAKING IT AS ITA NOS. 3614 & 3905/DEL/2010 7 AFTER THOUGHT, THE AO HAS ADDED THE DIFFERENCE OF R S. 1,22,87,850/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF DISALLO WANCE OF UNDISCLOSED INVESTMENT. 9. THE ASSESSEE AGGRIEVED BY BOTH THE ADDITIONS FIL ED AN APPEAL BEFORE CIT(A). VIDE GROUND NO. 3, ASSESSEE HAD CHA LLENGED THE DISALLOWANCE OF RS. 12,57,309/-. IT WAS SUBMITTED T HAT THE SAID DISALLOWANCE HAS BEEN MADE BY THE AO WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. REFERE NCE WAS MADE TO THE OPENING PART OF THE ASSESSMENT ORDER, WHERE IT WAS MENTIONED THAT THE COUNSEL OF THE ASSESSEE HAD ATTENDED THE P ROCEEDINGS FROM TIME TO TIME, FILED VARIOUS DETAILS WHICH WERE EXAM INED AND PLACED ON RECORD. REFERRING TO THESE OBSERVATIONS OF AO, IT WAS SUBMITTED THAT AO HAS NOT POINTED OUT THAT THERE WAS A FAILUR E ON THE PART OF THE ASSESSEE IN NOT MAKING COMPLIANCE AT ANY POINT OF T IME. THE AO DID NOT ASK FOR PRODUCTION OF ANY VOUCHERS OF THE ABOVE EXPENSES. ALL THE DETAILS WERE PROVIDED BY THE ASSESSEE TO THE AO WHICH WAS REQUIRED TO BE PRODUCED. THE ASSESSEE HAD ALWAYS E XTENDED THE COOPERATION DURING THE COURSE OF ASSESSMENT PROCEED INGS. NO EXPENSES WERE INFLATED. THE BOOKS OF ACCOUNTS ARE AUDITED. FROM THE DETAILS SO FILED AO COULD NOT POINT OUT ANY SPE CIFIC EXPENDITURE WHICH WAS EITHER INFLATED OR UN-VOUCHED. IT WAS SU BMITTED THAT ITA NOS. 3614 & 3905/DEL/2010 8 COMPLETE VOUCHERS OF ALL EXPENSES WERE AVAILABLE AN D COULD BE PRODUCED. THE AO WAS NOT CORRECT IN NOT APPRECIATI NG IN PROPER MANNER TO THE AUDIT REPOT WHICH CLEARLY STATED THAT THE ASSESSEE HAS MAINTAINED TRUE AND FAIR BOOKS OF ACCOUNT. IT IS N OT THE CASE OF THE AUDITORS THAT ASSESSEE HAD ADOPTED A DEVICE TO INFL ATE ANY EXPENDITURE AND, THEREFORE, THE ADDITION MADE WAS NOT JUSTIFIED AND REQUIRES DELETION. ON THESE SUBMISSIONS OF THE ASSESSEE LD. CIT(A), IN THE IMPUGNED ORDER IN PARA 4.2, HAS DELETED THE ADDITIO N ON THE GROUND THAT THE SUBMISSIONS OF THE ASSESSEE AND THE FACTS OF THE CASE WHEN CLEARLY CONSIDERED THEN IT CAN BE SEEN THAT AO HAS FAILED TO POINT OUT ANY SPECIFIC EXPENDITURE WHICH IS EITHER INFLATED O R UN-VOUCHED AND THERE IS MARGINAL DECLINE IN THE NET PROFIT RATE AS COMPARED TO THE LAST YEAR AS AGAINST THAT THERE IS SUBSTANTIAL INCREASE IN THE TURNOVER AND THE NET PROFIT SHOWN AND THE DISALLOWANCE HAS BEEN MADE BY THE AO ON AD-HOC BASIS WITHOUT CONSIDERING THE BOOK RESULT S. THE ADDITION MADE BY THE AO IS LEGALLY UNTANEABLE AND THUS, HE H AS DELETED THE ADDITION. 10. SO AS IT RELATES TO ADDITION MADE ON ACCOUNT OF PROPERTY, IT WAS NOTICED BY THE LD. CIT(A) THAT THE AO OF THE ASSESS EE HAD ALSO REFERRED THE VALUATION OF THE PROPERTY TO THE INCOM E TAX VALUATION CELL. THE SAID REPORT IS DATED 29.12.08 IN WHICH T HE FAIR MARKET VALUE ITA NOS. 3614 & 3905/DEL/2010 9 OF THE LAND AS ON THE DATE OF PURCHASE HAS BEEN VAL UED AT RS. 44,59,301/- (RS. 15,699/- PER SQ. YD.). IT WAS FUR THER NOTICED THAT THE ASSESSEE HAD ALSO CONSTRUCTED THE SAID PROPERTY AND COST OF CONSTRUCTION VALUED BY THE DVO IN HIS REPORT WAS RS . 49,52,033/- AS AGAINST CONSTRUCTION COST OF RS. 30,50,000/- SHOWN BY THE ASSESSEE. THUS, THERE WAS A DIFFERENCE OF RS. 19,02,033/- IN THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE AND VALUED BY TH E DVO AND CONSIDERING THE SAID VALUATION REPORT OF DVO, LD. C IT(A) HAS TAKEN THE VALUE OF THE LAND AT RS. 44,59,301/- AND ORDERE D FOR FURTHER ADDITION OF RS. 19,02,233/- ON ACCOUNT OF DIFFERENC E IN COST OF CONSTRUCTION AS SHOWN BY THE ASSESSEE AND AS VALUED BY THE DVO AND IN THIS MANNER HE HAS DELETED THE ADDITION OF RS. 8 9,26,516/- AND HAS SUSTAINED THE ADDITION OF RS. 33,61,334/-. 11. AT THE OUTSET, IT WAS SUBMITTED BY LD. DR THAT THE FOLLOWING PORTION OF THE GROUNDS OF APPEAL FILED BY THE REVEN UE APPEARS NOT TO BE ARISING EITHER FROM THE ASSESSMENT ORDER OR FROM THE ORDER OF CIT(A): - WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING TO CALCULATE NET PROFIT @6% OF TOTAL RECEIPTS AS AGAINST 8% ADOPTED BY AO IGNORING THAT ASSESSEE DID NOT PRODUCE NEITHER A NY VOUCHERS NOR BOOKS OF ACCOUNTS BEFORE THE AO. ITA NOS. 3614 & 3905/DEL/2010 10 12. SHE SUBMITTED THAT THE REAL GRIEVANCE OF THE RE VENUE IS REGARDING DELETION OF ADDITION OF RS. 12,57,309/- A ND SUCH ADDITION HAS WRONGLY BEEN DELETED BY LD. CIT(A) WITHOUT CONS IDERING THE FACT THAT ASSESSEE COULD NOT FURNISH BOOKS OF ACCOUNT DE SPITE SEVERAL OPPORTUNITIES PROVIDED TO THE ASSESSEE. REFERRING TO THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER VIDE WHICH IT HAS BEEN CLEARLY MENTIONED THAT THE ASSESSEE HAD NOT PRODUCED BOOKS OF ACCOUNT AND VOUCHERS, SHE PLEADED THAT ADDITION HAS WRONGLY BEE N DELETED. THEREFORE, THE ADDITION SHOULD BE RESTORED AND THE DELETION MADE BY THE CIT(A) SHOULD BE SET ASIDE. 13. FIRST REPLYING TO THE AFOREMENTIONED SUBMISSION OF LD. DR, IT WAS SUBMITTED BY LD. AR THAT THOUGH THE BOOKS OF AC COUNT MAY NOT HAVE BEEN PRODUCED BEFORE THE AO BUT IT WAS SUBMITT ED BEFORE CIT(A) THAT ALL THE RELEVANT VOUCHERS AND DETAILS R EGARDING THESE EXPENSES WERE PRODUCED BEFORE THE AO AND AO COULD N OT FIND ANY DEFECT IN THE MAINTENANCE OF THOSE VOUCHERS. THERE FORE, HE PLEADED THAT ADDITION HAS RIGHTLY BEEN DELETED. ITA NOS. 3614 & 3905/DEL/2010 11 14. THE LD. AR WAS REQUIRED TO GIVE A SPECIFIC ANSW ER TO THE QUERY THAT WHETHER OR NOT THE BOOKS OF ACCOUNT WERE PRODU CED BEFORE AO OR CIT(A). THIS QUERY WAS RAISED FOR THE REASON TH AT DELETION OF ADDITION HAS BEEN CONTESTED BY THE REVENUE ON THE S OLE GROUND THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT. LD. AR STATED THAT IT IS NOT CLEAR FROM THE ORDER OF AO AND CIT(A) THAT WHET HER OR NOT THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT. HOWEVER, H E SUBMITTED THAT IN THE PRESENCE OF DETAILS WHICH WERE MADE AVA ILABLE TO THE AO AND IN THE PRESENCE OF AUDITED ACCOUNTS, LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIONS AND HIS ORDER SHOULD BE UPHE LD. 15. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES ON THIS ISSUE. LD. AR HAS NOT BEEN ABLE TO SHOW US THAT BOOKS OF ACCOUNTS WERE EVER PRODUCED BEFORE AO. HE ALSO COULD NOT SHOW US FROM THE ORDER OF CIT(A) THAT ASSESSEE BEFORE LD . CIT(A) HAD EVER OFFERED TO PRODUCE BOOKS OF ACCOUNT OR THOSE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE AO OR CIT(A). IN ANY CASE, IT IS T HE CASE OF THE AO THAT BOOKS OF ACCOUNTS WERE NOT PRODUCED BY THE ASS ESSEE. WITHOUT BOOKS THE VOUCHERS AND DETAILS CANNOT BE EXAMINED. THEREFORE, WE ARE OF THE OPINION THAT IT IS A FIT CASE WHERE THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO TO ENABLE THE ASSES SE TO PRODUCE THE BOOKS OF ACCOUNTS WHICH ARE STATED TO BE MAINTAINED BY THE ASSESSEE. ITA NOS. 3614 & 3905/DEL/2010 12 THE AO AFTER EXAMINING AND VERIFYING THE BOOKS OF A CCOUNTS WILL RE- DETERMINED THE INCOME OF THE ASSESSEE FORM THE BUSI NESS OR PROFESSION CARRIED ON BY THE ASSESSEE. THE AO WILL CONSIDER THIS ISSUE DENOVO AS PER PROVISIONS OF LAW AFTER PROVIDI NG THE ASSESSEE WITH THE REASONABLE OPPORTUNITY OF HEARING AND ALSO WITH THE OPPORTUNITY TO PLACE ON RECORD ALL THE EVIDENCES ON WHICH THE ASSESSEE MAY WANT TO PLACE HIS RELIANCE. 16. SO AS IT RELATES TO ADDITION SUSTAINED BY THE C IT(A) WITH REGARD TO AFOREMENTIONED PROPERTY IT WAS THE SUBMISSION OF LD. AR THAT ACCORDING TO THE DATE OF REPORT OF DVO THE SAME WAS AVAILABLE ON THE DATE WHEN THE AO HAD FRAMED THE ASSESSMENT ORDE R. IT CAN BE SEEN THAT THE DVOS REPORT IS DATED 29.12.08 AND DA TE OF ASSESSMENT ORDER IS ALSO 29.12.08. IT IS ALSO OBSERVED THAT T HE LAST DATE PRESCRIBED FOR FRAMING THE ASSESSMENT WAS 31.12.08. THEREFORE, IT IS THE CASE OF LD. AR THAT IF THE MATTER WAS REFERRED BY THE AO TO THE DVO AND DVO WAS ALSO TO SUBMIT ITS REPORT THEN THE AO MIGHT EITHER SHOULD HAVE REFERRED IT IN THE ASSESSMENT OR DER THAT HE HAS REFERRED THE VALUATION TO THE VALUATION OFFICER OR HE SHOULD HAVE WAITED FOR THE VALUATION REPORT. THIS HAVING NOT B EEN DONE BY THE AO, THE ADDITION IS NOT SUSTAINABLE. IT IS ALSO TH E CASE OF LD. AR THAT AO HAD TAKEN THE VALUATION AT AN ARBITRARY RATE OF RS. 45,000/- PER ITA NOS. 3614 & 3905/DEL/2010 13 SQ. YD. AND IT HAS BEEN VALUED BY DVO AT RS. 15,699 /- SQ. YD. IT IS ALSO THE CASE OF THE ASSESSEE THAT THE SAID PROPERT Y WAS UNDER THE TENANCY OF THE ASSESSEE. IT IS FURTHER THE CASE OF LD. AR THAT CIT(A) HAS NO POWER TO ENHANCE THE ASSESSMENT BY TAKING TH E COST OF CONSTRUCTION OF THE ASSESSEE, AS VALUED BY DVO PART ICULARLY IN A CASE WHERE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT. IT IS THE CASE OF LD. AR THAT BY DOING SO LD. CIT(A) HAS ENHANCED THE ASS ESSMENT MADE BY THE AO AS EVEN AO DID NOT MAKE ANY ADDITION ON A CCOUNT OF UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE IN THE COST OF CONSTRUCTION, ON THE OTHER HAND, RELYING ON THE ORD ER OF CIT(A), IT IS THE CASE OF LD. DR THAT LD. CIT(A) HAS RIGHTLY SUST AINED THE ADDITION IN PART BASED ON THE VALUATION MADE BY THE DVO & HI S ORDER SHOULD BE UPHELD. 17. AFTER HEARING BOTH THE PARTIES AND KEEPING IN V IEW, ALL THESE FACTS, WE ARE OF THE OPINION THAT IN THE INTEREST O F JUSTICE THIS ISSUE SHOULD ALSO BE RESTORED BACK TO THE FILE OF AO AS O N THE DATE WHEN AO HAS FRAMED THE ASSESSMENT, IT APPEARS THAT THE S AID VALUATION REPORT WAS NOT AVAILABLE TO THE AO AND ASSESSEE WAS ALSO NOT HAVING PROPER TIME TO EXPLAIN THE DISCREPANCIES POINTED OU T BY DVO IN ITS REPORT ON THE BASIS OF WHICH LD. CIT(A) HAS SUSTAIN ED THE ADDITIONS. ITA NOS. 3614 & 3905/DEL/2010 14 THEREFORE, THIS ISSUE IS ALSO BEING RESTORED TO THE FILE OF AO FOR DENOVO DETERMINATION AS PER PROVISIONS OF LAW AFTER PROVIDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE A ND ALSO PROVIDING OPPORTUNITY TO THE ASSESSEE TO PLACE ALL DOCUMENTS AND EVIDENCE ON RECORD TO SUPPORT HIS CASE. 18. KEEPING IN VIEW, THE ABOVE DISCUSSION, THE CROS S APPEALS ARE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES I N THE MANNER AFORESAID. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS APPEAL FILED BY THE REVENUE BOTH ARE ALLOWED FOR STATISTIC AL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20.6.2011 SD/- SD/- (B.K. HALDAR) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.6.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR