DCIT, New Delhi V. Anil Kumar Gupta, New Delhi

ITA 4659/DEL/2012

• Counselvise Citation: 465920114 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2012
• Court: TRIBUNAL
• Department Lawyers: A MISHRA
• Assessee Lawyers: K C JAIN
• Keywords: Unexplained investment; Value adopted by valuation officer; Unexplained expenditure; Search and seizure; Opportunity of being heard; Fair market value
• Section: 56; 69C; 153A

Judgement Text

I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH, NEW DELHI [CORAM: PRAMOD KUMAR AM AND C M GARG JM ] I.T.A. NO.: 427 6 /DEL/201 2 ASSESSMENT YEAR: 2005 - 06 ANIL KUMAR GUPTA .APPELLANT 4672/21, ANSARI ROAD DARYA GANJ, NEW DELHI 110 002 [PA N: AAHPG2966J] VS. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II, FARIDABAD . RESPONDENT I.T.A. NO.: 4657, 4658 AND 4659 /DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II, FARIDABAD .APPELLANT VS. ANIL KUMAR GUPTA .RESPONDENT 4672/21, ANSARI ROAD DARYA GANJ, NEW DELHI 110 002 [PAN: AAHPG2966J] APPEARANCES BY: K C JAIN , FOR THE A SSESSEE A MISHRA , FOR THE REVENUE DATE OF CONCLUDING THE HE ARING: 28 TH JANUARY, 2015 DATE OF PRONOUNCING THE ORDER: 30 TH JANUARY, 2015 O R D E R PER PRAMOD KUMAR AM : 1. THESE FOUR APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE A COMMON ISSUE AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, ALL THE F OUR APPEALS ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 2 OF 10 2. THE ASSESSEE, AN INDIVIDUAL WHO MAINLY DERIVES HIS INCOME FROM PARTNERSHIP IN GUPTA TOBACCO CO AND PACKOTECH INDUSTRIES, WAS SUBJECTED TO A SEARCH AND SEIZURE PROCEEDINGS ON HIS RESIDENTIAL AND BUSINESS PROCEEDINGS ON 5 TH MARCH 2009. IT WAS IN THIS BACKDROP THAT THE ASSESSEE WAS CALLED UPON TO FILE HIS INCOME TAX RETURNS UNDER SECTION 153(1)(B) OF THE INCOME TAX ACT, 1961, AMONGST OTHER YEARS, FOR THESE ASSESSMENT YEARS AS WELL. THE ASSESSEE FILED HIS INCOME TA X RETURNS DISCLOSING INCOMES OF RS 3,19,630 , RS 6,62,040 AND RS 13,30,860 FOR THE ASSESSMENT YEARS 2005 - 06, 06 - 07 AND 07 - 08 RESPECTIVELY. THESE INCOME TAX RETURNS WERE SUBJECTED TO THE SCRUTINY ASSESSMENT PROCEEDINGS AND HEARINGS, FO R THAT PURPOSE, TOOK PLACE FROM TIME TO TIME. DURING THE COURSE OF THESE PROCEEDINGS, THE ASSESSING OFFICER NOTIC E D THAT THE ASSESSEE HAS SHOWN TO HAVE SPENT RS 1, 11 ,00,000, IN HIS INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2006 - 07, ON THE HOUSE PROPERTY A T 21/31A MALL ROAD, DELHI. THE AO WAS OF THE VIEW THAT THIS AMOUNT IS FAR BELOW THE PREVAILING PRICES OF THE LOCALITY, AND A REFERENCE SHOULD BE MADE TO THE DISTRICT VALUATION OFFICER FOR PROPER VALUATION FOR THE PURPOSES OF ASSESSMENT UNDER SECTION 153A . IT WAS IN THIS BACKDROP THAT A REFERENCE WAS MADE TO THE DISTRICT VALUATION OFFICER FOR VALUATION OF LAND AND BUILDING AT 21/31 MALL ROAD, DELHI. ON THE BASIS OF DVOS REPORT SO OBTAINED BY THE ASSESSING OFFICER, THE DIFFERENCES IN VALUATION WERE AS FOLLO WS: ASSESSMENT YEAR DESCRIPTION AS DECLARED BY ASSESSEE (RS) AS VALUED BY THE DVO (RS) DIFFERENCE 2005 - 06 FMV OF LAND 1,00,00,000 5 ,39,77,238 4,39,77,238 2005 - 06 CONSTRUCTION 48,61,761 59,03,692 10,41,931 2006 - 07 CONSTRUCTION 66,51,461 80,76,947 14,2 5,486 2007 - 08 CONSTRUCTION 13,03,178 15,82,464 2,79,286 3. IT WAS ON THE BASIS OF THIS DVO REPORT, AND AFTER REJECTING ASSESSEES SPECIFIC OBJECTIONS TO THE CONTENTS OF THIS VALUATION ON MERITS, THAT THE ASSESSING OFFICER CONCLUDED AS FOLLOWS: I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 3 OF 10 IN VIEW OF THE DETAILS AS ELABORATED IN THE SUB PARAS ABOVE, I AM CONSTRAINED TO CONSIDER THE DIFFERENCE IN THE VALUE OF INVESTMENT IN LAND AND BUILDING AS VALUED BY THE DVO UNDER SECTION 142 A OF THE ACT, AND THAT SHOWN BY THE ASSESSEE IN HIS BOOKS , AS THE UNDIS CLOSED EXPENDITURE OF THE ASSESSEE UNDER SECTION 69C OF THE ACT, AND TO ADD IT TO HIS RETURNED INCOME IN THE YEAR AS TRACED OUT BY THE DVO, AND CONSIDERED APPROPRIATE AT THIS END TOO, AS FOLLOWS: RELEVANT ASSESSMENT YEAR AMOUNT CONSIDERED UNDER SECTION 6 9C OF THE INCOME TAX ACT [RS] 2005 - 06 4,50,19.169 2006 - 07 14,25,486 2007 - 08 2,79,286 4. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). WHILE LEARNED CIT(A) HELD THAT THE REFERENCE TO THE DVO UNDER SECTION 142 A WAS INVALID INASMUCH AS IT COULD ONLY BE MADE FOR THE PURPOSES OF 68, 69 A AND 69 B, NO SUCH REFERENCE WAS PERMISSIBLE, IN ACCORDANCE WITH THE LAW AS IT THEN STOOD, FOR THE PURPOSE OF MAKING AN ADDITI ON UNDER SECTION 69 C. AS THE ENTIRE ADDITION WAS MADE UNDER SECTION 69C AND ON THE BASIS OF THE DVO, LEARNED CIT (A) DELETED THE ADDITIONS, REFERRED TO ABOVE, HAVING BEEN MADE BY THE ASSESSING OFFICER. LEARNED CIT(A) ALSO DEALT WITH THE VALUATION ISSUES ON MERITS, BUT GIVEN THE FACT THAT ALL THE RELEVANT ADDITIONS WERE ANYWAY DELETED ON ACCOUNT OF IMPERMISSIBILITY OF REFERENCE UNDER SECTION 142A, THAT ASPECT OF THE MATTER IS SOMEWHAT ACADEMIC. BOTH THE PARTIES ARE IN APPEAL BEFORE US. WHILE REVENUE IS AG GRIEVED OF THE RELIEF HAVING BEEN GRANTED BY THE CIT(A) ON THE ISSUE OF IMPERMISSIBILITY OF REFERENCE UNDER SECTION 142A IN A SITUATION IN WHICH ADDITIONS ARE MADE UNDER SECTION 69 C AS ALSO ON CERTAIN FINDINGS ON MERITS, THE ASSESSEE IS AGGRIEVED, FOR THE I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 4 OF 10 ASSESSMENT YEAR 2005 - 06, ON NOT ACCEPTING CERTAIN ARGUMENTS WITH REGARD TO VALUATION OF LAND ON MERITS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POS ITION. 6. WE HAVE NOTED THAT LEARNED COMMISSIONER (APPEALS) HAS QUASHED THE REFERENCE UNDER SECTION 142A ON THE SHORT GROUND THAT NO SUCH REFERENCE IS PERMISSIBLE SO FAR AS ADDITIONS IN THE HANDS OF AN ASSESSEE UNDER SECTION 69C ARE CONCERNED AND THE ASS ESSING OFFICER HAS, IN THE PRESENT CASE, MADE THE IMPUGNED ADDITIONS UNDER SECTION 142 A OF THE ACT. IT IS , THEREFORE, APPROPRIATE BEGIN BY TAKING A LOOK THESE PROVISIONS, I.E. SECTION 69 C AND SECTION 142 A, AND OTHER RELEVANT LEGAL PROVISIONS, I.E. SEC TION 69 AS THEY STOOD AT THE MATERIAL POINT OF TIME . THESE PROVISIONS ARE REPRODUCED BELOW FOR READY REFERENCE: SECTION 69 - UNEXPLAINED INVESTMENTS. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSI NG OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. UNEXPLAINED MONEY, ETC. SECTION 69A - UNEXPLAINED MONEY WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 5 OF 10 AND SOURCE OF ACQUISITION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE MONEY AND THE VALUE OF THE BULLION, JEWELLERY OR OTHER VALUABLE ARTIC LE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR.] SECTION 69B - AMOUNT OF INVESTMENTS, ETC., NOT FULLY DISCLOSED IN BOOKS OF ACCOUNT. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY, OR OTHER VALUABLE ARTICLE, AND THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED T O BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. SECTION 69 C - UNEXPLAINED EXPENDITURE, ETC. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR: PRO VIDED THAT, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, SUCH UNEXPLAINED EXPENDITURE WHICH IS DEEMED TO BE THE INCOME OF THE ASSESSEE SHALL NOT BE ALLOWED AS A DEDUCTION UNDER ANY HEAD OF INCOME. SECTION 1 42A - ESTIMATE BY VAL UAT ION OFFICER IN CERTAIN CASES (1) FOR THE PURPOSES OF MAKING AN ASSESSMENT OR RE - ASSESSMENT UNDER THIS ACT, WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 OR I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 6 OF 10 SECTION 69B OR THE VALUE OF ANY BULLION, JEWELLERY OR OTHER VALUABLE A RTICLE REFERRED TO IN SECTION 69A OR SECTION 69B OR FAIR MARKET VALUE OF ANY PROPERTY REFERRED TO IN SUB - SECTION (2) OF SE CTION 56 IS REQUIRED TO BE MADE , THE ASSESSING OFFICER MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SAME TO HIM. (2) THE VALUATION OFFICER TO WHOM A REFERENCE IS MADE UNDER SUB - SECTION (1) SHALL, FOR THE PURPOSES OF DEALING WITH SUCH REFERENCE, HAVE ALL THE POWERS THAT HE HAS UNDER SECTION 38A OF THE WEALTH - TAX ACT, 1957 (27 OF 1957). (3) ON RECEIP T OF THE REPORT FROM THE VALUATION OFFICER, THE ASSESSING OFFICER MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, TAKE INTO ACCOUNT SUCH REPORT IN MAKING SUCH ASSESSMENT OR RE - ASSESSMENT: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RESPECT OF AN ASSESSMENT MADE ON OR BEFORE THE 30TH DAY OF SEPTEMBER, 2004, AND WHERE SUCH ASSESSMENT HAS BECOME FINAL AND CONCLUSIVE ON OR BEFORE THAT DATE, EXCEPT IN CASES WHERE A REASSESSMENT IS REQUIRED TO BE MADE IN ACCORDANCE WITH THE PROVI SIONS OF SECTION 153A. EXPLANATION : IN THIS SECTION, 'VALUATION OFFICER' HAS THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957). 7. WE HAVE ALSO NOTICED THAT THERE IS NO DISPUTE THAT IN THE PRESENT CASE, THE ASSESSEE HAD MADE PAYMENTS IN RESPECT OF ACQUISITION OF LAND AND CONSTRUCTIONS THEREON FOR A RESIDENTIAL UNIT, AND THE CASE OF THE ASSESSING OFFICER IS THAT HIS INVESTMENT IN THE RESIDENTIAL UNIT WAS NOT PROPERLY REFLECTED IN THE BOOKS OF ACCOUNTS. AS THE ASSESSI NG OFFICER HIMSELF CONSIDERED THE DIFFERENCE IN THE VALUE OF INVESTMENT IN LAND AND BUILDING AS VALUED BY THE DVO UNDER SECTION 142 A OF THE ACT, AND THAT SHOWN BY THE ASSESSEE IN HIS BOOKS AS INCOME OF THE ASSESSEE BUT HE HAS TREATED THE SAME AS THE UN DISCLOSED EXPENDITURE OF THE ASSESSEE UNDER SECTION 69C OF THE ACT . HOWEVER, AS A I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 7 OF 10 PLAIN LOOK AT THE PROVISIONS OF SECTION 69 C AND SECTION 69 B SHOWS THAT WHILE SECTION 69 C REFERS TO ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY , SECTION 69 B REFERS TO A SITUATION IN WHICH INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY, OR OTHER VALUABLE ARTICLE, AND THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASS ESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY . CLEARLY, THEREFORE, ANY EXPENDITURE ON INVESTMENT IN LAND AND BUILDING, PARTICULARLY IN A SITUATION IN WHICH THE SAME IS HELD AS AN INVESTMENT, NOT HAVING BEEN FULLY DISCLOSED IN THE BOOKS OF ACCOUNTS IS COVERED BY THE SPECIFIC PROVISIONS OF SECTION 69 B OF THE ACT. THE REFERENCE TO SECTION 69C, AS MADE BY THE ASSESS ING OFFICER, IN THE CONCLUDING PORTION OF THE ASSESSMENT ORDER SEEMS TO BE AN INADVERTENT ERROR. THE ADDITION IN QUESTION, IF OTHERWISE SUSTAINABLE IN LAW ON MERITS, COULD ONLY BE SUSTAINED UNDER SECTION 69 B OF THE ACT. THERE CAN BE LITTLE DISPUTE ABOUT THIS LEGAL POSITION. A CAREFUL LOOK AT SECTION 142A ALSO MAKES IT CLEAR THAT THE SECTION UNDER WHICH ADDITION IS MADE NOT RELEVANT FOR ASSUMPTION OF JURISDICTION UNDER THAT SECTION, BUT ALL SUCH A REFERENCE REQUIRES IS THAT WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 OR SECTION 69B OR THE VALUE OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE REFERRED TO IN SECTION 69A OR SECTION 69B OR FAIR MARKET VALUE OF ANY PROPERTY REFERRED TO IN SUB - SECTION (2) OF SECTION 56 , A R EF ERENCE CAN BE MADE TO THE DVO. AS LONG AS ESTIMATION OF VALUE OF AN INVESTMENT REFERRED TO IN SECTION 69 B IS REQUIRED, THE REFERENCE CAN BE LEGITIMATELY MADE UNDER SECTION 142A. SECTION 69 B, ON THE OTHER HAND, REFERS TO BULLION, JEWELLERY OR OTHER VAL UABLE ARTICLE ( EMPHASIS BY UNDERLING SUPPLIED BY US ) WHICH ESSENTIALLY INCLUDES LAND AND BUILDING AS WELL. IN THIS VIEW OF THE MATTER, IN OUR CONSIDERED VIEW, LEARNED CIT(A) HAS ACTED IN A RATHER SUPERFICIAL MANNER , PROCEEDING ON THE BASIS OF AN ILL - CON CEIVED TECHNICALITY, AND QUASHED THE REFERENCE UNDER SECTION 142A ON THE GROUND THAT I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 8 OF 10 SUCH A REFERENCE COULD ONLY BE MADE IN RESPECT OF AN ADDITION UNDER SECTION 69 C OF THE ACT. LEARNED CIT (A) WAS, THEREFORE, WHOLLY IN ERROR IN HIS REASONING AND IN HIS CO NCLUSIONS. 8. LEARNED COUNSEL FOR THE ASSESSEE, HOWEVER, DOES NOT GIVE UP. HE REFERS TO A JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT VS AAR PEE APARTMENTS PVT LTD [(2009) 319 ITR 276] IN SUPPORT OF THE PROPOSITION THAT EVEN IN RES PECT OF EXPENDITURE ON CONSTRUCTION, A REFERENCE UNDER SECTION 142 A CANNOT BE MADE AS IT IS EXPENDITURE NEVERTHELESS. HOWEVER, THIS DECISION DOES NOT SUPPORT THE CASE OF THE ASSESSEE INASMUCH AS THAT WAS A CASE IN WHICH A BUILDER HAD INCURRED EXPENDITURE IN THE COURSE OF HIS BUSINESS AND HONBLE HIGH COURT WAS OF THE VIEW THAT, IF INVESTMENTS COULD INCLUDE WITHIN ITS FOLD THE EXPENDITURE AS WELL WHICH IS INCURRED BY A BUSINESSMAN DURING THE COURSE OF HIS BUSINESS, THERE WAS NO NECESSITY OF HAVING A SEPAR ATE PROVISION UNDER S. 69C OF THE ACT WHICH DEALS WITH UNEXPLAINED 'EXPENDITURE' . IN THE PRESENT CASE, HOWEVER, THE EXPENDITURE IS NOT IN THE COURSE OF BUSINESS BUT AS AN INVESTMENT IN PERSONAL CAPACITY. HE THEN REFERS TO HONBLE JURISDICTIONAL HIGH COUR TS JUDGMENT IN THE CASE OF CIT VS NAVEEN GERA [(2010) 328 ITR 516] BUT NOTHING REALLY TURNS ON THIS DECISION AS THE REFERENCE UNDER SECTION 142 A WAS HELD TO BE IMPERMISSIBLE BECAUSE THE ASSESSMENT WAS MADE BY THE AO ON 30TH AUG., 2000 AND THE CIT(A) DE CIDED THE APPEAL ON 30TH JAN., 2001, WHICH IS CLEARLY PRIOR TO THE CUT OFF DATE OF 30TH SEPT., 2004. CONSEQUENTLY, IT WAS NOT OPEN TO THE AO TO ORDER VALUATION OF THE PROPERTY BY DVO . A REFERENCE WAS THEN MADE TO HONBLE SUPREME COURTS JUDGMENT IN THE C ASE OF SARGAM CINEMA VS CIT [(2010) 328 ITR 513] IN SUPPORT OF THE PROPOSITION THAT UNLESS THE BOOKS OF ACCOUNTS WERE REJECTED, A REFERENCE CANNOT ANYWAY BE MADE TO THE DVO. HOWEVER, AS IS OBVIOUS FROM THE JUDGMENT, THE RELEVANT APPEAL BEFORE THE HONBLE COURT WAS FILED IN THE YEAR 2005, AND, THEREFORE, THE ASSESSMENT, IN ALL LIKELIHOOD, MUST HAVE BEEN COMPLETED BEFORE 30 TH SEPTEMBER 2004 WHICH WAS THE CUT - OFF DATE SO FAR AS PROVISIONS OF SECTION 142A COMING INTO FORCE IS CONCERNED. WHILE THE INSERTION OF SECTION 142A WAS RETROSPECTIVE IN EFFECT, AS WAS SPECIFICALLY STATED, THE PROVISO TO SECTION 142 A SPECIFICALLY STATED I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 9 OF 10 THAT, NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RESPECT OF AN ASSESSMENT MADE ON OR BEFORE THE 30TH DAY OF SEPTEMBER, 2004, AND WHERE SUCH ASSESSMENT HAS BECOME FINAL AND CONCLUSIVE ON OR BEFORE THAT DATE, EXCEPT IN CASES WHERE A REASSESSMENT IS REQUIRED TO BE MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A . THE ASSESSMENTS DEALT IN SARGAM CINEMAS CASE (SUPRA), AS CAN BE R EASONABLY BE INFERRED, DID NOT DEAL WITH THE IMPACT OF SECTION 142A. IN THE ABSENCE OF PROVISION OF SECTION 142A, THERE WAS NO ENABLING PROVISION TO MAKE A REFERENCE TO THE DVO, AND, AS SUCH, JUDICIAL PRECEDENTS IN THE CONTEXT OF LAW PRIOR TO INSERTION O F SECTION 142A ARE NO LONGER RELEVANT. IN OUR CONSIDERED VIEW, POST INSERTION OF SECTION 142A, REJECTION OF THE BOOKS OF ACCOUNTS IS NOT A SINE QUA NON FOR A REFERENCE BEING MADE TO THE DVO, EVEN THOUGH A DVO REPORT, FOR THE PURPOSES OF MAKING AN ASSESSM ENT OF INCOME, IS TO BE EXAMINED ON ITS MERITS IN EACH CASE AND JUST BECAUSE A DVOS REPORT INDICATES HIGHER INVESTMENT THAN THE INVESTMENT IN THE BOOKS OF ACCOUNTS, SUCH A FACT, BY ITSELF, CANNOT JUSTIFY AN ADDITION BEING MADE IN THAT RESPECT. WE HOLD SO. 9. IN VIEW OF THE ABOVE DISCUSSIONS, WE CONSIDER IT APPROPRIATE TO VACATE THE ORDER OF THE CIT(A) ON THE POINT OF DVO REFERENCE BEING INVALID. HOWEVER, AS WE HAVE MENTIONED EARLIER, THE DVO REPORT IS TO BE EXAMINED ON ITS MERITS AND ALL THE OBJECTIONS R AISED BY THE ASSESSEE THERETO ARE REQUIRED TO BE ADJUDICATED ON MERITS. LEARNED CIT(A), AS LEARNED REPRESENTATIVES FAIRLY AGREE, HAS NOT EXAMINED ALL THESE CONTENTIONS, AS ALSO ELABORATE DOCUMENTARY SUPPORT THEREOF - COPIES OF WHICH HAVE BEEN FILED BEFORE US AS WELL, IN SUFFICIENT DETAIL AND BY WAY OF A SPEAKING ORDER. WITH THE CONSENT OF THE PARTIES, THEREFORE, THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR THE LIMITED PURPOSES OF ADJUDICATION DE NOVO ON MERITS ON THE IMPUGNED ADDITIONS, IN RESPECT O F INVESTMENT IN LAND AND BUILDING, IN ACCORDANCE WITH THE LAW, AFTER GIVING YET ANOTHER OPPORTUNITY OF HEARING TO THE ASSESSEE AND BY WAY OF A SPEAKING ORDER. WE ALSO MAKE IT CLEAR THAT THE ASSESSEE WILL HAVE THE LIBERTY TO TAKE ALL SUCH PLEAS IN SUPPORT O F HIS CONTENTIONS ON MERITS, AS HE DEEMS FIT, AND THE CIT(A) WILL DEAL WITH ALL SUCH CONTENTIONS AS WELL, IN TERMS OF THE ABOVE DIRECTIONS. IN THE APPEAL FILED BY THE I.T.A. NO.: 4276, 4657, 4658 AND 4659/DEL/2012 ASSESSMENT YEAR: 2005 - 06, 06 - 07 AND 07 - 08 PAGE 10 OF 10 ASSESSEE, THE PRIMARY GRIEVANCE IS THAT THE CIT(A) HAS NOT DEALT WITH ALL THE GROUNDS OF APPEAL OF THE ASSESSEE. AS THE MATTER IS BEING REMITTED TO THE FILE OF THE CIT(A), WE ALSO DEEM IT PROPER TO DIRECT THE CIT(A) TO ADJUDICATE ON ALL THE GROUNDS RAISED BY THE ASSESSEE, IN ACCORDANCE WITH THE LAW, AFTER GIVING YET ANOTHER OPPORTUNITY OF HEA RING TO THE ASSESSEE AND BY WAY OF A SPEAKING ORDER . 10. AS WE PART WITH THESE APPEALS, WE MAKE IT CLEAR THAT IN THE PRESENT APPEALS WE HAVE DEALT WITH THE SECTION 142 A, AS IT STOOD AT THE MATERIAL POINT OF TIME I.E. IN THE ASSESSMENT YEARS 2005 - 06, 20 06 - 07 AND 2007 - 08, BUT IN THE LAW AS IT STANDS NOW, BY THE VIRTUE OF AMENDMENT VIDE FINANCE ACT 2014, THE LEGAL POSITION IS DIFFERENT AND THE ISSUES DEALT IN THIS APPEAL DO NOT EVEN ARISE FOR CONSIDERATION. WE LEAVE IT AT THAT. 11. IN THE RESULT, ALL THE FOUR APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE . PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH DAY OF JANUARY, 2015. SD/XX SD/XX C M GARG PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, 30 TH DAY OF JANUARY, 2015 COPIES TO: (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSIST ANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI