AO not relay upon an Inspector’s report while estimating the rate of plots with which the respondent had not been confronted.

It is also pertinent to note that he had only made verbal inquiries with regard to the prevailing market rate of the property and had not collected any instances of actual sales in the said areas. Furthermore, the inquiry that he made was as on the date of his visit, that is on 02.03.2006, whereas the sales had taken place in the financial year ending 31.03.2003. He also stated that he had made inquiries from only 2-3 persons. It is obvious that when such statements are made in cross-examination, his report with regard to the rate of land being 6,000/- per sq. yd. to 7,000/- per sq. yd. in the two localities could not have much evidentiary value, if at all. He had specifically indicated in his cross-examination that he had inquired about the likely rate at which he could buy property at that time. Thus, even the rates indicated by him in his report, were not of financial year ending 2003-04 but, were of the date he visited, that is, 02.03.2006.

Download Full text of the Judgment – CIT Vs. Delhi Housing & Finance Corporation, ITA No. 38/2013, Judgment delivered on: 12.02.2013, High court of Delhi

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