Sh. Sumit Aggarwal, Gurgaon V. ACIT, Ludhiana

ITA 716/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5236 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Retrospective amendment; Fair market value; Valuation report
• Section: 43CA; 133(6); 131; 69; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.716 /CHD/2016 (ASSESSMENT YEAR : 2010-11) SH.SUMIT AGGARWAL VS. THE A.C.I.T., GURGAON. CIRCLE VII, LUDHIANA. PAN: ACMPA0233B AND ITA NO.717 /CHD/2016 (ASSESSMENT YEAR : 2010-11) SMT.RUCHIKA AGGARWAL VS. THE A.C.I.T., GURGAON. CIRCLE VII, LUDHIANA. PAN: ADGPG5708A (APPELLANT) (RESPONDENT) APPELLANT BY : MS.HASNEETA MATTA RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 15.03.2017 DATE OF PRONOUNCEMENT : 03.04.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : BOTH THE ABOVE APPEALS HAVE BEEN FILED BY DIFFERENT ASSESSEES AGAINST SEPARATE ORDERS OF LEAR NED COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA EA CH DATED 4.3.2016, RELATING TO ASSESSMENT YEAR 2010-11 . SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS COMMON, 2 THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 2. FOR THE SAKE OF CONVENIENCE WE SHALL BE DISCUSSING THE FACTS IN ITA NO. 717/CHANDIGARH/2016 . ITA NO. 717/CHANDIGARH/2016 : 3. THE FACTS RELEVANT OF THE CASE ARE THAT, DURING THE IMPUGNED ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2 010- 11, THE ASSESSEE HAD, IN HIS RETURN OF INCOME, CLAI MED LOSS FROM BUSINESS AND PROFESSION AMOUNTING TO RS.26,34,781/- ON ACCOUNT OF SALE OF PROPERTY AT TA TVAM VILLA, GURGAON, IN WHICH THE ASSESSEE HAD 50% INTER EST, THE BALANCE 50% BEING THAT OF HER HUSBAND, THE SAID PROPERTY HAD BEEN PURCHASED ON 24.9.2007 FOR RS.5,18,75,776/- AND SOLD ON 31.3.2010 FOR RS.5,00,00,000/-. THE ASSESSEE HAD ALSO TAKEN A LO AN FOR THE PURCHASE OF THE SAID PROPERTY AND HAD CLAIMED INTEREST PAID ON THE SAID LOAN AS AN EXPENSE AND AD DED IT TO THE LOSS FROM THE SALE OF PROPERTY. THUS THE TO TAL BUSINESS LOSS RETURNED BY THE ASSESSEE WAS RS.26,34,781/-. THE ASSESSING OFFICER BECAME SUSPI CIOUS OF THE SALE PRICE OF THE PROPERTY CONSIDERING THE G ENERAL TREND IN THE REAL STATE MARKET AND IN GURGAON PARTI CULARLY WHICH ACCORDING TO HIM WAS IN A BOOM DURING THOSE Y EARS. HE, THEREFORE, ISSUED COMMISSION U/S 131(1)(D) OF THE 3 INCOME TAX ACT, 1961 (IN SHORT THE ACT) TO THE V ALUATION OFFICER (HEREINAFTER REFERRED TO AS DVO) TO DETERM INE THE FAIR MARKET VALUE ( HEREINAFTER REFERRED TO AS FMV) OF THE PROPERTY AS ON 31.3.2010. THE DVO DETERMINED THE V ALUE OF THE PROPERTY AT RS.7,38,78,923/-, MUCH HIGHER TH AN RS.5 CRORES AT WHICH THE ASSESSEE HAD SOLD THE PROP ERTY. THE SAME WAS CONFRONTED TO THE ASSESSEE. THE ASSES SEE RESPONDED BY STATING THAT THERE WERE GLARING MISTAK ES IN THE DVOS REPORT AND THAT THE REFERENCE TO THE DVO WAS ALSO ILLEGAL. FURTHER THE ASSESSEE STATED THAT DVO S REPORT WAS UNREASONABLE ALSO FOR THE REASON THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE DVO TO FILED ITS CONTENTION/OBJECTIONS ON THE SAID REPORT. THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTENTIO N, STATING THAT THE REFERENCE WAS VALID AND RELIED UPO N THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JINDAL STRIPS LTD. VS. ITO, 116 ITR 82 5. THE ASSESSING OFFICER ALSO STATED THAT THE ASSESSEE HAD BEEN GIVEN ADEQUATE OPPORTUNITY AND FURTHER ALL DISCREPA NCIES POINTED OUT IN THE DVOS REPORT BY THE ASSESSEE WER E BRUSHED ASIDE BY THE ASSESSING OFFICER. THE ASSESS ING OFFICER THEREAFTER SUBSTITUTED THE SALE CONSIDERATI ON BY THE FAIR MARKET VALUE DETERMINED BY THE DVO AND COMPUTED THE PROFITS ON ACCOUNT OF THE SALE OF THE IMPUGNED PROPERTY ASSESSABLE IN THE ASSESSEES HA NDS AT 4 RS.1,19,39,461/-. THE ADDITION TO THIS EXTENT WAS MADE TO THE INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THE SAME, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT (APPEALS), WHO UPHELD THE ADDITION MADE CONFIRMING THE FINDINGS OF THE AS SESSING OFFICER THAT THE REFERENCE TO THE DVO WAS U/S 131(1 )(D) WAS VALID AND THAT ADEQUATE OPPORTUNITY HAD BEEN GI VEN TO THE ASSESSEE. THE RELEVANT FINDINGS OF THE LD. CIT (APPEALS) AT PARA 3.4 OF THE ORDER ARE AS UNDER: 3.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF FILE APPELLANT AND THE FACTS OF THE CASE ON RECORD. THE APPELLANT HAS PURCHASED THE RESIDENTIAL PROPERTY VIL LA NO 28 A! TATVAM VILLAS SECTOR 46, GURGAON AS PERSONAL ASSET IN SEPT 2007 AND CONTINUED TO HOLD THE SAME AS PERSONAL ASSE T. THE ASSET WAS NOT PURCHASED WITH A VIEW TO TREAT IT AS A BUSINESS ASSET. IN THE YEAR UNDER CONSIDERATION, BE CAUSE OF FINANCIAL DIFFICULTIES, THE APPELLANT HAD TO DISPO SE OFF THE PROPERTY BY SELLING IT. THE APPELLANT HAS CLAIMED THA T AFTER HAVING HELD THE RESIDENT PROPERTY AS PERSONAL ASSET FOR 3 YEARS, SOLD THE SAME ON 30 MARCH 2010 AND CLAIMED I T AS A BUSINESS LOSS. THE RESIDENTIAL PROPERTY WAS PURCHASE D JOINTLY BY MR SUMIT AGGARWAL AND MRS RUCHIKA AGGARWAL. THE SAME HAS BEEN SOLD JOINTLY BY THEM AND THE CLAIMED LOSS. HOWEVER, THE ASSESSING OFFICER HAS ACCEPTED THE PLEA OF THE A SSESSEE THAT PERSONAL ASSET WAS CONVERTED TO BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER HAS MADE REFERENCE FOR VALUA TION OF PROPERTY U/S SEC 55 A AND ON OBJECTION BY THE AS SESSEE, ISSUED COMMISSION U/S 131(1)(D) OF THE I.T. ACT 1961 TO THE DEPTT 5 VALUATION OFFICER. THE DEPTT. VALUATION OFFICER AFTE R OBTAINING THE REQUISITE DETAILS FROM THE ASSESSEE AND TAKING INT O ACCOUNT THE RELEVANT FACTS, PREPARED THE VALUATION R EPORT. WHICH WAS DULY CONFRONTED TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS BA SED ON THE REPORT OF THE DVO DRAWN THE INFERENCE THAT VALU E OF THE PROPERTY SOLD WAS HIGHER THAN AS DECLARED BY THE ASS ESSEE AND ACCORDINGLY DETERMINED THE TAX LIABILITY OF THE ASSESSEE. THE APPELLANT DURING APPEAL HAS GIVEN INSTANCE OF O THER PROPERTY WHICH WAS SOLD AT TOWER RATE THAN THE APPELLANT. IT IS NOTICED THAT SIZE OF PLOT OF BOTH THE VILLAS IS DIFFERENT. THE VILLA SOLD BY THE APPELLANT IS OF MUCH LARGER SIZE, THEREFORE, THE R ATES ARE NOT COMPARABLE. THE ASSESSING OFFICER HAS NOT BASED HIS ESTIMATE ON GENERAL OBSERVATIONS RATHER ON THE BASIS OF EXPERT I.E D.V.O. HE HAS ASSESSED THE CORRECT VALUE OF SALE OF THE PROPERTY AND ACCORDINGLY ASSESSED THE GAIN ON SALE O F THE RESIDENTIAL PROPERTY. AS FOR AS REFERENCE TO THE DEP TT. VALUATION OFFICER IS CONCERNED THE ASSESSING OFFICER HAS ISSU ED LETTER U/S 131(1)(D) OF THE I.T ACT. FOR DETERMINING VALUE OF CAPITAL GAIN AND COST OF INVESTMENT SEPARATE SECTIONS ARE THERE IN TH E I.T. ACT. 1961 WHEN THE RESIDENTIAL PROPERTY WAS SOLD AS BUSI NESS ASSET, THE ASSESSING OFFICER HAD TO INVOKE SEC 131(1 )(D) FOR MAKING REFERENCE TO THE DVO. AFTER DULY CONFRONTING T HE REPORT OF THE DVO TO THE ASSESSES, THE ASSESSMENT H AS BEEN MADE BY THE ASSESSING OFFICER. THE CASE LAWS RELIED ON BY THE APPELLANT RELATE TO SALE OF ASSET ON WHICH CAPITAL GAIN INCOME IS EARNED AND NOT TO THE SALE OF RESIDENTIAL HOUSE SOLD AS BUSINESS ASSET. IN VIEW OF THE FACTS O F THE CASE, THE ADDITION MADE BY THE ASSESSING OFFICER IS UPH ELD AND GROUND OF APPEAL TAKEN BY THE ASSESSEE IS DISMIS SED. 6 5. AGGRIEVED BY THE ACTION OF THE LD. CIT (APPEALS ) THE ASSESSEE HAS NOW COME UP APPEAL BEFORE US AND H AS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER DATED 4-03-2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 3, LUDHIANA ( 'LD. CIT(A)') U/S. 250(6) OF THE INCOME TAX ACT, 1961 ('A CT') IS BAD IN LAW AS THE LD. CIT(A) ERRED IN UPHOLDING THE ORDER DA TED 15- 03-2013 OF THE ACIT, CIRCLE VII, LUDHIANA (AO) U/S. 143 (3) OF THE ACT, DETERMINING THE INCOME UNDER THE HEAD BUSI NESS AND PROFESSION AT RS. 93,04,680/- AS AGAINST THE RETURNED BUSINESS LOSS OF (RS. 26,34,781/-) BASIS VALUATION REPORT OF THE DEPARTMENTAL VALUATION OFFICER (DVO), RESULTING IN A N ET DEMAND OF RS. 49,47,160/-. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.1,19,39,461, UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION, BEING NOTIONAL PROFIT ON SALE OF PROPERTY CONSTITUTING STOCK-IN-TRADE, BASIS VALUE PRESUMED BY T HE DVO, SUCH REFERENCE BEING VOID AB INITIO, THE ADDIT ION OF RS.1,19,39,461 MAY KINDLY THUS BE DELETED. 2.1. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ACTUAL SALE CONSIDERATION OF THE PROPERTY BEING THE MORE TH AN THE STAMP DUTY VALUE, RECOURSE TO REFERENCE TO DVO FOR VALUATION OF A CAPITAL ASSET IS NOT CONTEMPLATED UNDER THE ACT IN TERMS OF S.50C, READ WITH S.55A AND/OR S.131(1)(D) OF THE ACT. 2.2. THAT THE REFERENCE MADE BY THE AO TO THE DVOU/S.55AAND/OR S.131(1)(D) OF THE ACT FOR VALUATION OF PROPERTY IS IN CONTRAVENTION OF THE SETTLED POSITION PER THE APEX COURT IN 7 AMIYA BALA PAUL (262 ITR 407) AND AS FURTHER ADOPTE D IN THE RELEVANT GUIDELINES OF THE INCOME TAX DEPARTMENT; 2.3. THAT FURTHER, REFERENCE TO DVO FOR VALUATION U/S. 55 A AND/OR S.131(1)(D) HAS NO APPLICATION TO SALE OF PROPERTY CONSTITUTING STOCK-IN-TRADE, BEING THE SET TLED POSITION TILL ASSESSMENT YEAR 2013-14 [70 DTR 169(A II.) AND 320 ITR 345 (MAD)}, THEREAFTER S.43CA BEING INSERTED IN THE ACT W.E.F. 1-4-2014 TO PROVIDE FOR REFERENCE TO DVO FOR VALUATION OF PROPERTY CONSTITUTING STOCK-IN-TRADE 3. THAT IN ANY CASE AND WITHOUT PREJUDICE TO THE ABO VE, IT IS SETTLED LAW THAT RE-DETERMINING SALE VALUE BY CERTAIN NO TIONAL MEANS IS NOT PERMITTED WHILE COMPUTING INCOME UNDER THE HEAD BUSINESS AND PROFESSION; 4. NOTWITHSTANDING AND WITHOUT PREJUDICE TO THE AB OVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE L D. CIT(A) ERRED IN NOT CONSIDERING THE ALTERNATIVE PRAYER OF T HE APPELLANT CHALLENGING THE VALUATION REPORT OF THE DVO ON MERITS . THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMI T OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL A T ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 6. ALL THE GROUND RAISED BY THE ASSESSEE ARE AGAINST THE ACTION OF THE LD. CIT (APPEALS) IN UPHO LDING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF PROFIT EARNED ON SALE OF PROPERTY BY SUBSTITUTING S ALE CONSIDERATION WITH FMV OF THE PROPERTY. THE ASSESS EE HAS CHALLENGED THE REFERENCE MADE TO THE DVO U/S 131(1) (D) OF THE ACT AND HAS ALSO CHALLENGED THE ADDITION MADE S TATING THAT IT TANTAMOUNTED TO TAXING THE NOTIONAL PROFITS OF THE ASSESSEE. 8 7. DURING THE COURSE OF HEARING THE ASSESSEE FILED A BRIEF SYNOPSIS IN WRITING OF ITS SUBMISSIONS AND SUMMARIZED THE KEY ASPECTS IN THE CASE AS FOLLOWS V IS A VIS REFERENCE MADE TO DVO: 2.1 REGARDING GROUND NO.2 ,THE KEY ASPECTS CONCERNING THE ADDITION ARE SUMMARIZED AS UNDER FOR CONSIDERATION BY YOURS HONOURS; - WHETHER ADDITION MADE ONLY ON CONJECTURES AND SURMISES IS TENABLE? - WHETHER ASCRIBING A NOTIONAL VALUE IS PERMISSIBLE ONLY ON THE BASIS OF THE VALUATION REPORT OF A DVO, WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD? - WHETHER THE REFERENCE TO DVO CAN BE MADE IN INCOME-TAX ASSESSMENTS IN GENERAL? - WHETHER CONTRACTUAL SALES CONSIDERATION CAN GENERALLY BE SUBSTITUTED WITH FAIR MARKET VALUE? 8. SUBMISSIONS ON ALL THE ASPECTS WERE MADE PLACING RELIANCE ON A NUMBER OF CASE LAWS.FURTHER L D COUNSEL ALSO MADE SUBMISSIONS ON GROUND NO.3 RELATI NG TO IMPERMISSIBILITY OF TAXING NOTIONAL PROFITS AND ON GROUND NO.4 POINTING OUT INFIRMITIES IN THE VALUATI ON REPORT. BRIEF SUMMARY OF THE SUBMISSIONS OUTLINED AT PARA 3 OF THE SUBMISSIONS IS AS FOLLOWS: 9 - ALL PARTICULARS, DOCUMENTS AND EXPLANATIONS IN RESPECT OF THE SALE OF PROPERTY CONSTITUTING STOCK IN TRADE HAVE BEEN SUBMITTED THE AGREED SALE CONSIDERATION REALIZED BY THE ASSESSEES IS AT THE PRICE FETCHED IN THE OPEN MARKET THE GURGAON PROPERTY IS AN OUTRIGHT PURCHASE IN 2007 AS A 'UNIT ' FROM VIPUL LTD., NOT BEING A PROPERTY WHICH THE ASSESSEES HAVE SPENT MONEY ON CONSTRUCTION FOR WHICH COST OF CONSTRUCTION SHOULD BE CALLED INTO QUESTION. - THE ASSESSEES FULLY CO-OPERATED DURING ASSESSMENT , FURTHER SUBMITTING ALL DETAILS AND EXPLANATIONS AS SOUGHT BY THE LD. AO, DVO AND THE LD. CIT(A). - WHILE THE LD. AO AND LD CIT(A) ACCEPTED THE KEY FAC TS, THEY FAILED TO APPRECIATE THE EXPLANATIONS SUBMITTE D IN SUPPORT OF MARKET CONDITIONS BASIS CRISIL REPORT FOR 2010, AND FURTHER INCLUDING CIRCLE RATES, STAMP VALUATION, COMPARABLE SALE VALUE OF SIMILAR PROPERTY , REPORT OF A GOVT APPROVED VALUER AND THE APPLICABLE PROVISIONS OF SETTLED LAW. - EXCEPT THE HIGH SUSPICION THAT MARKET PRICES WERE GENERALLY HIGH, NO MATERIAL OR EVIDENCE HAS BEEN PLACED ON RECORD TO CONTROVERT THE SUBMISSIONS OF THE ASSESSEE THAT IT WASN'T THE CASE - THE ACTUAL SALE VALUE HAS BEEN RE-DETERMINED BY THE LD AO, AND AS UPHELD BY THE LD CIT(A), SOLELY ON THE BASIS OF THE REPORT OF THE DVO, WITHOUT PLACING ANY MATERIAL OR EVIDENCE ON RECORD THAT AN AMOUNT OTHER THAN THE ACTUAL SALE CONSIDERATION WAS RECEIVED BY THE ASSESSEES. - FOR THE RELEVANT YEAR, I.E., THERE WERE NO SPECIF IC AND/OR SPECIAL PROVISIONS GOVERNING THE TRANSFER OF IMMOVEABLE PROPERTY BEING STOCK IN TRADE. THE AMENDMENT BY WAY OF INSERTION OF S.43CA IS EFFECTIVE 1.4.2014, AND SUCH PROVISIONS ARE PARI MATERIA WITH 10 S.50C THAT APPLIES TO TRANSFER OF IMMOVEABLE ASSETS BEING 'CAPITAL ASSETS'. FURTHER, AS THE COST OF CONSTRUCTION OF THE PROPERTY WAS NOT IN QUESTION, THE REFERENCE TO DVO BY INVOKING S.131(L)(D) OF THE ACT IS BAD IN LAW IN VIEW OF SC IN 262 ITR 407 AND THE 2009 GUIDELINES ON VALUATION OF IMMOVEABLE PROPERTY OF THE DEPTT OF REVENUE. - ACCORDINGLY, IT IS RESPECTFULLY SUBMITTED THAT FO R THE YEAR UNDER CONSIDERATION, I.E., AY 2010-11, THE ESTABLISHED PRINCIPLES AND SETTLED LAW WOULD APPLY TO THE IMPUGNED SALE OF PROPERTY CONSTITUTING STOCK IN TRADE; THAT REVENUE HAS NO POWER TO ESTIMATE/DETERMINE NOTIONAL INCOME UNLESS THE ACT SPECIFICALLY PROVIDES OR WHERE COGENT EVIDENCE IS PLA CED ON RECORD THAT AN AMOUNT OTHER THAN THE STATED SALE VALUE HAS BEEN PAID/RECEIVED AND THAT A DVO'S REPORT CANNOT BE THE SOLE BASIS FOR AN ADDITION. 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT (APPEALS) AS WELL AS OF THE ASSESS ING OFFICER. 10. WE HAVE HEARD BOTH THE PARTIES,CAREFULLY GONE THROUGH THE DOCUMENTS PLACED BEFORE US AND ALSO PER USED THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTE D FACTS WHICH EMERGE ARE THAT THE ASSESSEE IN THE COURSE OF CARRYING ON ITS BUSINESS, SOLD A PROPERTY FOR RS.5 CRORES. THE SAID PROPERTY WAS IN THE NATURE OF STOCK-IN-TRA DE AND WAS PURCHASED AND SOLD AS SUCH AND NO CONSTRUCTION WAS DONE ON THE SAME BY THE ASSESSEE. THE ONLY ISSUE I N THE PRESENT CASE IS THE SUBSTITUTION OF THE SALE PRICE WITH FMV OF THE PROPERTY BY THE ASSESSING OFFICER FOR DETERM INING THE PROFIT EARNED ON THE SALE OF THE PROPERTY, THE 11 ALLEGATION OF THE ASSESSING OFFICER BEING THAT THE ASSESSEE HAD DELIBERATELY SHOWN IT AT LESSER VALUE SINCE IT WAS A PRIME PROPERTY WHICH COULD NOT HAVE BEEN SOLD AT LO SS SPECIALLY WHEN REAL STATE WAS IN BOOM IN GURGAON, W HERE THE PROPERTY WAS LOCATED. THE LD. COUNSEL FOR THE ASSESSEE HAS ASSAILED THE ACTION OF THE ASSESSING O FFICER, WHICH HAS BEEN CONFIRMED BY THE LD. CIT (APPEALS), ON SEVERAL FRONTS. THE LD. COUNSEL FOR THE ASSESSEE H AS CONTESTED THE REFERENCE TO THE DVO AND ALSO CHALLEN GED THE SUBSTITUTION OF THE SALE CONSIDERATION WITH FMV IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT ANY EXTRA CONSIDERATION WAS RECEIVED BY THE ASSESSEE AND HAS ALSO BORROWED FROM THE REAL INCOME THEORY OF TAXATION TO CHALLENGE THE TAXATION OF THE ALLEGED NOTIONAL PROF ITS OF THE ASSESSEE IN THE PRESENT CASE. WE SHALL TAKE UP ALL THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE ONE BY ONE. 11. ONE OF THE CONTENTIONS RAISED BY THE LD.COUNSE L FOR THE ASSESSEE IN GROUND NO.2, AS STATED ABOVE IS THAT THE ASSESSING OFFICER COULD NOT HAVE REFERRED THE V ALUATION OF THE PROPERTY TO THE DVO UNDER ANY OF THE EXISTIN G PROVISIONS OF THE ACT WHETHER SECTIONS 55A, 131(1)( D) OR 142A OR FOR THAT MATTER EVEN SECTION 43CA. THE SUBMISSIONS AND ARGUMENTS OF THE LD.COUNSEL FOR THE ASSESSEE IN THIS REGARD ARE REPRODUCED IN PARA 2.4 OF HER WRITTEN SUBMISSIONS, THE GIST OF WHICH IS THAT AS P ER THE SETTLED LAW ON THE ISSUE BY THE HON'BLE APEX COURT IN 12 AMIYA BALA PAUL VS. CIT (2003) 262 ITR 407 (SC), TH E ASSESSING OFFICER IS EMPOWERED TO REFER A MATTER FO R VALUATION ONLY WHERE SPECIFIC POWERS ARE CONTAINED IN THE ACT. REFERENCE U/S 131(1)(D) OF THE ACT BEING A GE NERAL POWER COULD NOT HAVE BEEN MADE AND EVEN ASSUMING TH AT REFERENCE WAS MADE U/S 142A UNDER THE SAID SECTION REFERENCE COULD HAVE BEEN MADE ONLY FOR THE PURPOSE OF DETERMINING COST OF CONSTRUCTION AND NOT SALE VALUE OF THE PROPERTY. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING CASE LAWS IN SUPPORT OF ITS ABOVE CONTENTIONS: I) AMIYA BALA PAUL VS. CIT (2003) 262 ITR 407 SC). II) MEMORANDUM EXPLAINING REASONS AND OBJECTS FOR INTRODUCING SECTION 142A. III) 2009 GUIDELINES ON VALUATION OF IMMOVABLE PROPERTY, DEPARTMENT OF REVENUE EXPLAINING THE SCOPE OF REFERENCE TO DVO U/S 142A OF THE ACT. IV) NAMITA SINGH, NEW DELHI VS. DEPARTMENT OF INCOME TAX, ITA NO.2256/DEL/2008. 12. THE LD. COUNSEL FOR THE ASSESSEE ALSO CONTENDE D THAT SPECIFIC PROVISION FOR SUBSTITUTING SALE CONSI DERATION OF IMMOVABLE PROPERTY HELD AS STOCK-IN-TRADE WAS BR OUGHT ON THE STATUTE BY INSERTING SECTION 43CA OF THE ACT W.E.F. 1.4.2014, WHICH IN THE FIRST PLACED DOES NOT APPLY IN ASSESSEES CASE SINCE IT RELATES TO ASSESSMENT YEAR 2010- 11 AND EVEN OTHERWISE THE SAID SECTION ALLOWS REFER ENCE TO THE DVO FOR DETERMINING THE FMV ONLY ON THE INSISTE NCE OF 13 THE ASSESSEE AND THE ASSESSING OFFICER ON HIS OWN H AS NO POWER TO MAKE SUCH REFERENCE. 13. THE CONTENTION OF THE LD. DR, ON THE OTHER HAN D, IS THAT THE REFERENCE MADE U/S 131(1)(D) OF THE ACT WAS VALID AS PER THE DECISION OF THE HON'BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF JINDAL STRIPS LTD. (SUPRA ). 14. WE HAVE HEARD BOTH THE PARTIES ON THE ISSUE. WE ARE INCLINED TO AGREE WITH THE CONTENTIONS OF TH E LD. COUNSEL FOR THE ASSESSEE THAT REFERENCE MADE IN THE PRESENT CASE TO THE DVO FOR DETERMINING THE FMV OF THE PROPERTY SOLD WAS NOT IN CONFORMITY WITH LAW. IT I S NOT DISPUTED THAT THE REFERENCE IN THE PRESENT CASE WAS MADE U/S 131(1)(D) OF THE ACT AND FURTHER IT IS ALSO NOT DISPUTED THAT THE ASSET WAS A STOCK-IN-TRADE OF THE ASSESSEE . IT IS SETTLED LAW THAT THE REFERENCE TO THE DVO CAN BE MA DE ONLY BY RESORTING TO SPECIFIC PROVISION PROVIDING F OR THE SAME BY THE LEGISLATURE AND NOT BY VIRTUE OF OR BY INVOKING ANY GENERAL PROVISION. THE HONBLE APEX CO URT IN THE CASE OF AMIYA BALA PAUL(SUPRA) HAS HELD AS F OLLOWS: 17 BESIDES S. 55A HAVING EXPRESSLY SET OUT THE CIRCUMSTANCES UNDER AND THE PURPOSES FOR WHICH A RE FERENCE COULD BE MADE TO A VALUATION OFFICER, THERE IS NO QUES TION OF THE AO INVOKING THE GENERAL POWERS OF ENQUIRY TO MAK E A REFERENCE IN DIFFERENT CIRCUMSTANCES AND FOR OTHER PURPOSES. [SEE PADAM SEN VS. STATE OF U.P. AIR 1961 SC 218 PARA 8; ARJUN SINGH VS. MOHINDRA KUMAR AIR 1964 SC 993 (PARA 19). IT IS NOTEWORTHY THAT S. 55A WAS INTRODUCED IN THE AC T BY THE TAXATION LAWS (AMENDMENT) ACT, 1972, WHEN SS. 131(1), 133(6) AND 142(2) WERE ALREADY ON THE STATUTE BOOK. LE ARNED COUNSEL FOR THE APPELLANT HAS CORRECTLY SUBMITTED THAT IF THE POWER TO REFER ANY DISPUTE TO A VALUATION OFFICER WER E ALREADY AVAILABLE IN SS. 131(1), 133(6) AND 142(2), THERE WAS NO N EED 14 TO SPECIFICALLY EMPOWER THE AO TO DO SO IN CERTAIN CIRCUMSTANCES UNDER S. 55A. 15. THE HON'BLE APEX COURT HAS FURTHER RULED OUT THE REFERENCE FOR THE PURPOSE OF VALUATION BEING MA DE U/S 131(1)(D) BY STATING AS FOLLOWS: 11. THE COMMON FEATURE OF SS. 133(6) AND 142(2) IS THAT T HE AO IS THE FACT-FINDING AUTHORITY. IT IS HIS OPINION ON TH E BASIS OF THE FACTS AS FOUND ON AN ENQUIRY CONDUCTED BY HIMSEL F WHICH RESULTS IN THE ASSESSMENT ORDER. A REPORT BY THE VALU ATION OFFICER UNDER S. 55A IS, ON THE OTHER HAND, THE OUTCOM E OF AN INQUIRY HELD BY THE VALUATION OFFICER HIMSELF AND REF LECTS HIS OPINION ON THE EVIDENCE BEFORE HIM. SUCH A REPORT WOU LD NOT BE THE RESULT OF AN INQUIRY BY THE AO UNDER THE PRO VISIONS OF S. 133(6) OR S. 142(2). IT IS TRUE THAT THE AO IS NOT BOUND BY STRICT RULES OF EVIDENCE AND A REPORT OF A VALUATION OFFICER UNDER S. 55A MAY BE CONSIDERED BY THE AO AS A PIECE OF EVIDE NCE IF IT IS RELEVANT [SEE CIT VS. EAST COMMERCIAL CO. LTD. (1967) 6 3 ITR 449 (SC), 457]. HOWEVER, THE POWER OF INQUIRY GRAN TED TO AN AO UNDER SS. 133(6) AND 142(2) DOES NOT INCLUDE THE POWER TO REFER THE MATTER TO THE VALUATION OFFICER FOR AN ENQUIRY BY HIM. 16. THE REFERENCE IN THE PRESENT CASE HAVING BEEN MADE UNDER GENERAL PROVISION U/S 131(1)(D) IS, THER EFORE, ILLEGAL AND INVALID AND BEYOND THE POWERS OF THE AS SESSING OFFICER. FURTHER, EVEN FOR A MOMENT IF WE ASSUME T HAT REFERENCE WAS MADE U/S 142A AND THE MENTIONING OF SECTION 131(1)(D) WAS WRONG, THE REFERENCE, WE HOLD , IS STILL NOT VALID SINCE, AS RIGHTLY ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, AS PER THE PROVISIONS OF SECTION 142A PREVAILING AT THE TIME THE REFERENCE WAS MADE, THE REFERENCE COULD HAVE BEEN MADE ONLY FOR DETERMINING THE COST OF CONSTRUCTION OF THE ASSET AND NOT THE SALE CONSIDERATION OF THE ASSET. SECTION 142A, INSERTED BY FINANCE ACT 2004 AND APPLICABLE IN THE PRESENT CASE STATES AS FOLLOWS: 15 142A. ESTIMATE BY VALUATION OFFICER IN CERTAIN CASES. (1) FOR THE PURPOSES OF MAKING AN ASSESSMENT OR RE-ASSESSME NT UNDER THIS ACT, WHERE AN ESTIMATE OF THE VALUE OF ANY IN- VESTMENT REFERRED TO IN SECTION 69 OR SECTION 69B OR THE VALUE OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE REFE RRED TO IN SECTION 69A OR SECTION 69B OR FAIR MARKET VALUE OF A NY PROPERTY REFERRED TO IN SUB-SECTION (2) OF SECTION 56 IS REQUIRED TO BE MADE, THE ASSESSING OFFICER MAY REQUIRE THE VA LUATION 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 SECTI ON 38A OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). (3) ON RECEIPT OF THE REPORT FROM THE VALUATION OFFIC ER, THE ASSESSING OFFICER MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, TAKE INTO ACCOUNT SUCH RE PORT 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 BECOM E FINAL AND CONCLUSIVE ON OR BEFORE THAT DATE, EXCEPT IN CASES WHERE A REASSESSMENT IS REQUIRED TO BE MADE IN ACCO RDANCE WITH THE PROVISIONS OF SECTION 153A. 17. THE SAID SECTION HAS BEEN INTERPRETED BY THE DELHI BENCH OF THE I.T.A.T. IN THE CASE OF NAMITA SINGH (SUPRA) WHEREIN, THE I.T.A.T., WE FIND, HAS ELUCIDA TED THE SCOPE OF REFERENCE MADE U/S 142A OF THE ACT AS BEIN G APPLICABLE ONLY WHEN THE VALUE OF INVESTMENT IS TO BE DETERMINED AND NOT THE VALUE OF SALE CONSIDERATION. THE TRIBUNAL IN THE SAID CASE OBSERVED AS UNDER: 15.UNDER S. 142A OF THE ACT THE AO IS EMPOWERED TO REFER TO THE VALUATION CELL FOR THE PURPOSE OF MAKING AN ASSESS MENT OR REASSESSMENT WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN S. 69 OR 69B OR THE VALUE O F ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, REFERRED TO I N S. 69A OR S. 69B. THUS PROVISIONS OF S. 142A ARE APPLICABLE WHERE TH E 16 VALUE OF INVESTMENT IS TO BE DETERMINED. PROVISIONS OF S. 142A ARE NOT APPLICABLE FOR THE PURPOSE OF DETERMINATION OF FULL VALUE OF CONSIDERATION. THEREFORE, IN OUR CONSIDERED OPINION, IN THE ABSENCE OF ANY CONTRARY EVIDENCE, FULL VALUE OF CONSIDERATION CANNOT BE ESTIMATED UNDER S. 142A. 18. THIS VIEW IS FURTHER FORTIFIED BY THE MEMORANDUM, EXPLAINING THE REASONS AND OBJECTS FOR INCLUDING PROVISIONS 142A AND WHICH STATES THAT THE SAID PROVISIONS HAS BEEN INTRODUCED TO REMOVE DOUBTS WHE THER THE ASSESSING OFFICER CAN MAKE REFERENCE TO VALUATI ON OFFICER FOR ESTIMATING THE COST OF CONSTRUCTION. T HE RELEVANT PORTION OF THE MEMORANDUM IS REPRODUCED HEREUNDER: 36. CLARIFICATORY AMENDMENTS REGARDING ESTIMATES BY VALUATION OFFICER IN CERTAIN CASES THE EXISTING PROVISIONS OF SECTION 131 PROVIDE THAT THE ASSESSING OFFICER SHALL HAVE THE SAME POWERS AS ARE VESTED IN A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908, WHEN TRYIN G A SUIT. ONE SUCH POWER WHICH HAS BEEN PROVIDED IN CLAUSE (D) OF SUB- SECTION (1) OF SECTION 131, IS THE POWER TO ISSUE C OMMISSIONS. SECTION 75 OF CPC AND ORDER XXVI OF THE SCHEDULE TH ERETO LAYS DOWN THE POWER OF ISSUING COMMISSION', WHICH INTER ALIA, EMPOWERS THE COURT TO MAKE A LOCAL INVESTIGATION AND ALSO 'TO HOLD A SCIENTIFIC, TECHNICAL AND EXPERT INVESTIGATION '. USING THIS POWER, THE ASSESSING OFFICER HAS BEEN MAKING A REFERENCE TO THE VALUATION OFFICER FOR ESTIMATING TH E COST OF CONSTRUCTION OF PROPERTIES. THE SCOPE OF POWER VESTED IN AN ASSESSING OFFICER U NDER SECTION 131 TO MAKE A REFERENCE TO THE VALUATION OFFICER FO R ESTIMATING THE COST OF CONSTRUCTION OF PROPERTIES HAS BEEN A S UBJECT-MATTER OF LITIGATION. A NEW SECTION 142A HAS BEEN INSERTED BY THE FINANCE (NO. 2) ACT, 2004 TO SPECIFICALLY PROVIDE THAT AN ASSESSING OFFICER HAS THE POWER TO MAKE A REFERENCE TO THE VALUATION OFFI CER FOR ESTIMATING THE VALUE OF INVESTMENT, EXPENDITURE, ETC. THIS SECTION HAS BEEN INSERTED WITH RETROSPECTIVE EFFECT FROM 15TH NOVEMBER, 1972 TO SAVE THE CASES WHERE SUCH REFEREN CES HAVE BEEN MADE IN THE PAST AND ARE STILL PENDING IN LITIG ATION AT ONE STAGE OR THE OTHER. 19. FURTHER 2009 GUIDELINES OF VALUATION OF IMMOVABLE PROPERTY DEPARTMENT OF REVENUE LEND CREDE NCE 17 TO THE ABOVE VIEW. THE SAID GUIDELINES ARE REPRODU CED HEREUNDER: 2.3.6 UNDER SUB SECTION 1 OF SECTION 142A OF INCOME TAX ACT, 1961 INTRODUCED BY THE FINANCE ACT OF 2004, SUBSEQUENT TO THE SUPREME COURT JUDGMENT IN AMIYA B ALA PAL CASE, THE ASSESSING OFFICER MAY REFER THE VALUA TION OFFICER TO MAKE AN ESTIMATE OF THE VALUE OF AN INVESTMENT REFERRED TO IN SECTION 69A AND 69B OF TH E INCOME TAX ACT. IT IS TO BE UNDERSTOOD THAT INVESTM ENT REFERRED TO IN THIS SECTION PERTAINS TO THE INVESTM ENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF THE PRO PERTY AND NOT THE INVESTMENT MADE IN THE PURCHASE OF THE PROPERTY. THE VALUATION OFFICER UNDER THIS SECTION SHALL HAVE THE SAME POWERS AS HE HAS UNDER SECTION 38A OF THE WEALTH TAX ACT, 1957. THE REFERENCE MADE UNDER THIS SECTION 142A IS AN ADVISORY REFERENCE AND THE ASSES SING OFFICER MAY AFTER GIVING THE ASSESSEE AN OPPORTUNIT Y OF BEING HEARD TAKE INTO ACCOUNT SUCH REPORT OF THE VALUATION OFFICER FOR MAKING ASSESSMENT OR REASSESS MENT. 20. THUS IT IS AMPLY CLEAR FROM THE ABOVE THAT THE ASSESSING OFFICER IN THE PRESENT CASE HAD NO POWERS UNDER THE ACT TO REFER THE VALUATION OF THE IMPUGNED PROP ERTY TO THE DVO FOR THE PURPOSE OF DETERMINING THE SALE CONSIDERATION OF THE PROPERTY. THEREFORE, WE HOLD THAT THE REFERENCE MADE TO THE DVO U/S 131(1)(D) WAS INVALID . 21. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUE D THAT BY SUBSTITUTING SALE CONSIDERATION BY FMV IN THE ABSENCE OF THE ACT ANY EVIDENCE OF THE ASSESSEE HAV ING ACQUIRED ANY SUM OVER AND ABOVE THE STATED CONSIDERATION, THE ASSESSING OFFICER HAS ATTEMPTED TO BRING TO TAX THE NOTIONAL PROFITS OF THE ASSESSEE W HICH IS IMPERMISSIBLE UNDER THE LAW. THE LD. COUNSEL FOR T HE ASSESSEE HAS RELIED UPON THE FOLLOWING JUDGMENTS IN THIS REGARD: 18 1) POONA ELECTRIC SUPPLY CO. LTD. VS. CIT (1965) 57 ITR 521 (SC) 2) CIT VS. PRAFULLA KR MALLICK (1969) 73 ITR 119 (ORISSA) 3) K.P. VARGHESE VS. ITO (1981) 131 ITR 597 (SC) 4) CIT VS. SHAKUNTALA DEVI (2009) 224 CTR 79 (DELHI) 5) PRINCIPAL CIT-2, CHD. VS. QUARK MEDIA HOUSE INDIA (P) LTD. (2017) 77 TAXMANN.COM 301 (P&H) 22. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON T HE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF PARAMJIT SINGH VS. ITO (2010) 195 TAXMAN 27 3 (P&H) AND STATED THAT THE SALE CONSIDERATION DISCLO SED IN SALE DEED HAS TO BE ACCEPTED AND CANNOT BE CONTRADI CTED MERELY ON THE BASIS OF ORAL EVIDENCE. THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ACTUAL SALE CONSIDE RATION CANNOT BE SUBSTITUTED BY FAIR MARKET VALUE AND RELI ED UPON THE FOLLOWING DECISIONS IN THIS REGARD: 1) CIT VS. SMT.NILOFER I. SINGH (2009) 309 ITR 233 (DEL) 2) CIT VS. GEORGE HENDERSON & CO. LTD. (1967) 66 ITR 622 (SC) 3) GILLANDERS ARBUTHNOT & CO. (1973) 87 ITR 407 (SC) 23. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTE D THAT IN A BONAFIDE SALE TRANSACTION NOTHING COMPELS A TRADER TO SELL ON MARKET RATE AND SALE CONSIDERATIO N IS TO BE ACCEPTED UNLESS TRANSACTION IS PROVEN TO BE SHAM OR BOGUS, THE ONUS FOR WHICH LIES ON THE REVENUE TO 19 ESTABLISH. RELIANCE WAS PLACED ON A NUMBER OF DECI SIONS IN THIS REGARD, PARTICULARLY CIT VS. CALCUTTA DISCO UNT CO. LTD. (1973) 91 ITR 8. 24. ON THIS SCORE ALSO WE ARE IN AGREEMENT WITH TH E LD. COUNSEL FOR THE ASSESSEE. EVIDENTLY, THE ASSES SING OFFICER HAS MERELY SUBSTITUTED THE SALE CONSIDERATI ON WITH FMV OF THE PROPERTY DETERMINED BY THE DVO. NO OTHE R EVIDENCE HAS BEEN BROUGHT ON RECORD TO PROVE THAT T HE ASSESSEE HAS EARNED MORE THAN THE STATED CONSIDERAT ION. THE DVOS REPORT IS AT BEST ONLY A POINTER TO THE PRICE THAT THE PROPERTY CAN FETCH IN THE MARKET. IT DOES NOT ON ITS OWN ESTABLISH THAT THE ASSESSEE HAS EARNED MORE THAN THE STATED SALE CONSIDERATION. DVOS REPORT ON A S TAND ALONE BASIS MERELY RAISES A SUSPICION THAT THE PROP ERTY MUST HAVE BEEN SOLD FOR A HIGHER PRICE AND SUSPICIO N, HOWEVER, GRAVE, CANNOT THE BASIS FOR MAKING AN ADDI TION. BESIDES WE FIND THE ASSESSEE HAD ALSO EXPLAINED THE REASONS FOR FALL IN PRICE AS FOLLOWS AS BEING DUE T O DECLINE IN MARKET ON ACCOUNT OF ECONOMIC GLOBAL DOWNTURN. T HE ASSESSEE PLACED EXTRACTS OF THE CRISIL RESIDENTIAL REAL ESTATE 2010 REPORT BEFORE THE LD.CIT(A) PLACED AT P .B 166.THE LD DR HAS NOT CONTROVERTED THE SAME. BESID ES TO DEMONSTRATE THE PREVALENT MARKET CONDITIONS FOR THE IMPUGNED PROPERTY, REPORT OF AN APPROVED VALUER DETERMINING THE FMV AT RS.3.52 CRORES WAS FILED AN D ALSO COMPARABLE SALES IN THE SAME DEVELOPMENT BY THE SAM E BUILDER DURING THE SAME PERIOD WITH A THIRD PARTY S HOWING 20 LOWER PER SQUARE YARD SALE PRICE AS COMPARED TO THE ASSESSEE WAS FILED PLACED AT PAPER BOOK PG. NO.61-1 24.NO OBSERVATIONS WITH REGARD TO THESE EVIDENCES HAVE BE EN MADE BY THE LOWER AUTHORITIES OR EVEN THE LD.DR BEF ORE US. THE ASSESSEE HAD BESIDES DEMONSTRATING THE GENUINENESS OF THE SALE CONSIDERATION RECEIVED BY I T ALSO POINTED OUT ERRORS IN THE DVOS REPORT THAT IT HAD ADOPTED CIRCLE RATE OF COMMERCIAL PROPERTIES WHILE THE ASSE SSEES PROPERTY WAS RESIDENTIAL AND HAD A MUCH LOWER CIRCL E RATE. DETAILED SUBMISSIONS WERE MADE TO THE AO VIDE LETTE R DATED 07-3-2013 ALONGWITH COPY OF EXPERT OPINION OF A GOVT. APPROVED VALUER POINTING OUT DISCREPANCIES IN THE DVOS REPORT PLACED AT PAPER BOOK PAGE NO 143-163.B UT THE SAME WE FIND WERE NOT CONSIDERED BY THE LOWER AUTHORITIES . 25. THEREFORE, CONSIDERING THE FACT THAT THE ASSES SEE HAS ESTABLISHED THE SALE CONSIDERATION RECEIVED BY VIRTUE OF THE SALE DEED, COUPLED WITH THE FACT THAT NO SHR ED OF EVIDENCE, OF THE ASSESSEE HAVING EARNED MORE THAN T HE STATED CONSIDERATION, HAS BEEN BROUGHT ON RECORD BY THE REVENUE, WE UNHESITANTINGLY HOLD THAT THE ASSESSING OFFICER HAS ERRED IN TAKING THE FAIR MARKET VALUE A S THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE AND BY DOING SO HAS SOUGHT TO TAX THE NOTIONAL PROFITS OF THE AS SESSEE, WHICH IS NOT PERMISSIBLE UNDER THE ACT. THE RELIAN CE PLACED BY THE ASSESSEE ON THE DECISION OF THE HON'B LE APEX COURT IN THE CASE OF K.P. VARGHESE (SUPRA) IS APT, WHEREIN 21 IT HAS BEEN CATEGORICALLY HELD THAT THE ONUS IS ON THE REVENUE TO PROVE UNDERSTATEMENT IN THE DOCUMENT AND ESTABLISH A CONDITION OF TAXABILITY. THERE HAS TO BE EVIDENCE THAT CONSIDERATION ACTUALLY RECEIVED WAS M ORE THAN WHAT WAS DISCLOSED OR DECLARED AND IT HAS TO B E ESTABLISHED THAT THE ASSESSEE HAS STATED A FALSE FA CT. 26. THE LD.COUNSEL FOR THE ASSESSEE HAS RIGHTLY REFERRED TO THE DECISION OF THE APEX COURT IN THE C ASE OF CIT VS CALCUTTA DISCOUNT CO. LTD.(1973) 91 ITR 8 WH EREIN IT WAS HELD THAT WHERE A TRADER TRANSFERS GOODS TO ANOTHER TRADER AT A PRICE LESS THAN THE MARKET PRICE AND TH E TRANSACTION IS A BONAFIDE ONE, THE TAXING AUTHORITY CANNOT TAKE INTO ACCOUNT THE MARKET PRICE OF THOSE GOODS, IGNORING THE REAL PRICE FETCHED TO ASCERTAIN THE PR OFIT FROM THE TRANSACTION. 27. IN VIEW OF THE ABOVE, WE HOLD THAT REFERENCE MADE TO THE DVO FOR DETERMINING THE FMV OF THE PROP ERTY WAS INVALID AND AS CONSEQUENCE THE SALE CONSIDERATI ON OF THE PROPERTY COULD NOT HAVE BEEN SUBSTITUTED BY FMV DETERMINED BY THE DVO. WE THEREFORE SET ASIDE THE O RDER OF THE LD. CIT (APPEALS) AND DELETE THE ADDITION MA DE OF RS.1,19,39,461/-. 28. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLO WED IN THE ABOVE TERMS 22 ITA NO.716/CHD/2016: 29. SINCE THE FACTS & CIRCUMSTANCES AND ISSUES INVOLVED IN THIS ARE SIMILAR TO THAT IN ITA NO.717/CHD/2016, THEREFORE, OUR DECISION RENDERED I N ITA NO.717/CHD/WILL APPLY TO ITA NO.716/CHD/2016 WITH EQUAL FORCE. 30. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLO WED IN THE ABOVE TERMS. 31. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE ES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3 RD APRIL, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH