COMMISSIONER OF INCOME TAX Vs. SURAJ DEVI

JUDGEMENT

(1.) The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity "Act, 1961") challenging the order dated 8th July, 2009 passed by the Income Tax Appellate Tribunal (in short "ITAT") in ITA No. 3451/Del/2008, for the Assessment Year 2005-2006.

(2.) The facts relevant to the present case are that the respondent-assessee had made investment in properties bearing No. 101, Ground Floor, Bangala Sahib Road, New Delhi and a flat on the first floor of that property. The respondent-assessee had duly registered the purchase deed with the Sub-Registrar-VI, New Delhi. The said investment was duly declared in the regular return filed by the respondent-assessee. It is pertinent to mention that the property purchased is a disputed property which is tenanted and whose mutation has not been allowed in the name of the respondent-assessee by the Land and Development Officer. However, the Assessing Officer (in short "AO") made an addition on account of undisclosed payment having been made by the purchaser/respondent-assessee solely on the basis of the report of DVO. On an appeal being filed by the respondent-assessee, the ITAT allowed the appeal by observing as under:

(3.) During the course of search what the Department recovered was only the registered purchase deed. No other incriminating document whatsoever was found on the basis of suspicion that the market value of the property is more can be raised, reference to valuation cell was made under Section 142(1A). On the basis of DVO, the market value of the property has been estimated at Rs. 1,50,07,800/- as against the consideration in terms of registered deed at Rs. 62,50,000/- only resulting in addition of Rs. 43,78,900/- in the hands of the assessee. Because the DVO, various objections were raised besides it was pointed out that vacant possession of the shop was not given as there was already a tenant i.e. Indian Overseas Bank. The DVO failed to consider this vital aspect that due to presence of a tenant, the market value of the property in Delhi is severely diminished. Apart from this, learned Counsel vehemently argues that there is no material whatsoever with the department to come to a conclusion that any on money was paid by the assessee, corresponding addition in the case of vendor Shri Ashok Deish has not been made. The collateral instances referred to by DVO are in respect of vacant possession property besides in better locality, therefore, it was claimed that the matter should not have been referred to valuation cell under Section 141A and in any case, the addition is not sustainable on merits in view of this deficiency.