Income Tax Appellate Tribunal - Delhi
Inderpreet Kaur Sahota, New Delhi vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "C" DELHI)
BEFORE SHRI G.D. AGRAWAL, HON'BLE VICE PRESIDENT
AND SHRI A.D. JAIN, JUDICIAL MEMBER
ITA No. 2412(Del)2010
Assessment year: 2004-05
Income Tax Officer, Shri Harvinder Singh Sahota,
Ward 10(1), New Delhi. V. F-484,Vikaspuri, New Delhi.
ITA No. 3651(Del)2010
Assessment year: 2004-05
Income Tax Officer, Smt. Inderpreet Kaur Sahota,
Ward 10(1), New Delhi. V. F-484, Vikaspuri, New Delhi.
(Appellant) (Respondent)
Department by: Shri Salil Mishra, Sr. DR
Assessee by: Shri P.N. Chawla, Advocate
ORDER
PER A.D. JAIN, J.M.
These are Department's appeals for assessment year 2004-05 in the case of two assesses, Shri Harvinder Singh Sahota and his wife Smt. Inderpreet Kaur Sahota. The issue is being similar, the facts, for convenience, are being taken from ITA No. 2412(Del)2010.
2. The only effective ground is ground No.2, which states as follows:-
2 ITA Nos. 2412&3651(Del)2010
"On the facts and in the circumstances of the case, the ld. CIT(Appeals) has erred in deleting addition made of ` 38,06,600/- u/s 69 B of the Income Tax Act, 1961, when the District Valuation Officer has valued the property at ` 50,56,600/- against the disclosed value of ` 12,50,000/-."
3. The AO made addition of ` 38,06,600/- in the hands of Harvinder Singh Sahota, based on the report of Distt.Valuation Officer. While doing so, it was observed, inter alia, that the Valuation Officer, vide valuation report dated 26.12.06 had estimated the fair market value of the property(No. F-484, Vikaspuri, New Delhi) at ` 50,56.600/- against the value of the property mentioned at ` 12,50,000/- in the sale deed; that the valuation report of the Government approved valuer, as produced by the assessee, had estimated the property at ` 11,79,000/- only; that this value was less than that shown in the sale deed; that it was the value given by the Distt.Valuation Officer, which was to be taken as the fair market value of the property and the difference of ` 38,06,600/- was to be treated as the deemed income within the meaning of section 69 B of the I.T. Act; that the assessee has taken the plea that he was the owner of 3/4th share of the property, whereas his wife was owner of the remaining 1/4th share; that no 3 ITA Nos. 2412&3651(Del)2010 documentary proof have been filed; that it was being concluded that it was the assessee, Harvinder Singh Sahota who had purchased the property and the assessment of the difference of ` 38,06,600/- was to be made in his hands only.
4. By virtue of the impugned orders, the ld. CIT(A) deleted the additions made in the hands of both the assesses.
5. Challenging the impugned orders, the ld. DR has contended that whereas the AO had made the additions u/s 69 B of the Act, the ld. CIT(A) has not even as much as made any addition of such provision and has instead invoked the provisions of section 50 C of the Act and that therefore, the matter to be remitted to the file of the CIT(A) to be decided afresh in accordance with law, on taking the assessment order in due consideration vis-à-vis the invocation of the provision of section 69 B of the Act by the AO.
6. The learned counsel for the assessee, on the other hand, has submitted that the ld. CIT(A) has deleted the additions on perfectly well reasoned findings of fact; that the AO had merely relied on DVO's report to make the addition, despite the fact that there was no material on record to suggest that nothing more than the amount stated in the sale deed had exchanged hands; that not even the 4 ITA Nos. 2412&3651(Del)2010 statement of the seller had been recorded; that besides, the assessee had given comparable prevalent rate, which was wrongly ignored by the AO; that further more, the property was latest sold for ` 32,00,000/-, vide sale deed [copy at pages 40 to 81 of the Assessee's Paper Book ('APB' for short)], which transaction has been accepted by the Department itself vide assessment order dated 30.8.2011, for assessment year 2009-2010, passed u/s 143(3) of the I.T. Act in the case of Harvinder Singh Sahota (copy placed on record).
7. The learned counsel for the assessee has sought to place reliance on the following case laws:-
1. "CIT v. Puneet Sabharwal", 338 ITR 485(Del);
2. "CIT v. Smt. Suraj Devi", 328 ITR 604(Del); and
3. "CIT v. Naveen Gera", 328 ITR 516(Del).
8. We have heard the parties and have perused the material on record. The issue is as to whether the ld. CIT(A) has rightly deleted the additions made by the AO.
9. Undisputably, the AO made the addition singularly on the basis of the DVO's report. The value of the property as given in the sale deed was ` 12,50,000/-. No material whatsoever was brought on record by the AO to the effect that any further amount had passed 5 ITA Nos. 2412&3651(Del)2010 hands in the deal. In such a scenario, obviously, there was no occasion to accept the DVO's report as a Gospel truth. The assessee had cited comparable cases, which undisputably remained unrebutted in the remand report filed by the assessee before the ld. CIT(A). "K.P. Varghese v. ITO, Ernakulam", 131 ITR 597(SC) is, that the shadow of a doubt the corner stone of the proposition that it is the AO who must bring on record evidence to prove that some extra expenditure passed in such a transaction of property. In the present case, nothing to this effect has come on record, has correctly appreciated by the ld. CIT(A). The comparable case given by the assessee was, for reasons best known to him, ignored by the AO. Sofar as regards the Valuation Officer, it was based on the fact and not disputed before us that he had taken into consideration one property which was better located than the property had not and so it was not comparable to the property of the assessee.
10. The objection of the Department regarding invocation of the provisions of section 50 C of the Act, despite the AO having invoked section 69 B, is also not of any aid to the revenue. In "CIT v. Puneet Sabharwal" (supra), the facts are exactly similar to those present here. Therein, the addition was made u/s 69 B of the Act. 6 ITA Nos. 2412&3651(Del)2010 The addition was based solely on the report of the DVO. The matter was decided in favour of the assessee by the Hon'ble High Court, observing that the AO had solely relied on the report of the DVO, apart from which, there was no evidence to conclude that the assessee had paid extra consideration over and above what was stated in the sale deed and so, the addition was not justified. Similar are the decisions in "CIT v. Smt. Suraj Devi" (supra), and "CIT v. Naveen Gera" (supra).
11. Apropos, "Amar Kumari Surana (Smt) v. CIT", 226 ITR 344(Raj) sought to be relied on by the ld. DR. This decision also, to our minds, does not go to make the case of the Department any better. The ld. DR has stressed on the observations made therein to the effect that:-
"..................although on the basis of the Valuation Report and the fair market value no addition can be made, after obtaining the valuation report the plot of land noticed had been given to the assessee to show cause as to why the value of the plot of land in question should not be taken as per the valuation report and on the basis of comparable cases. The assessee had not given any reason as to why the property had been sold to the assessee for roughly ½ the prevalent market rate. In the absence of that the only inference that could be drawn was that the assessee had, in fact, concealed the actual consideration paid to the seller. The addition made u/s 69B was justified."7 ITA Nos. 2412&3651(Del)2010
12. In this regard, it is firstly seen that this decision, at the outset, recognizes the settled legal proposition, as in the case law discussed above, that merely on the basis of the valuation report and the fair market value, no addition can be made. Then, the facts in the present case do not tally with those in the present case, the comparable cases cited by the assessee were never taken into consideration, whereas those relied on were not comparable at all. In these facts and circumstances, relying on the jurisdictional High Court decisions (supra), the ld. CIT(A)'s orders are to be confirmed and we order accordingly.
13. In the result, both the appeals of the Department are dismissed.
Order pronounced in the open court on 03.02.2012.
Sd/- sd/-
(G.D. Agrawal) (A.D. Jain)
Vice President Judicial Member
Dated: 03.02.2012
*RM
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
8 ITA Nos. 2412&3651(Del)2010
5. DR
True copy
By order
Assistant Registrar