Corner Point Infrastructure Pvt. Ltd. Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad Remands DVO-Based Addition and Demonetisation Cash Deposit Issue: Books Not Rejected, Assessee Not Confronted
The Ahmedabad Bench “D” of the ITAT partly allowed the assessee’s appeals for AYs 2017-18 and 2018-19 by remanding the matters to the Assessing Officer for fresh adjudication. The assessee, a real estate developer, faced additions of ₹36.93 crore under section 69 on account of alleged unexplained investment based solely on the DVO’s valuation report, and ₹66.29 lakh under section 68 for cash deposits during the demonetisation period.
The Tribunal noted that the Assessing Officer had neither rejected the assessee’s books of account under section 145 nor confronted the DVO’s valuation report to the assessee before making the addition. It held that valuation differences cannot be mechanically adopted without giving the assessee an opportunity to explain project-wise investments and sale values vis-à-vis the DVO’s estimates. Similarly, with respect to cash deposits, the ITAT observed that proper verification of evidences was required, as the assessee sought to correlate deposits with withdrawals and business transactions.
In the interest of natural justice, both issues were restored to the file of the AO for de novo examination after confronting the valuation material, verifying evidences, and granting due opportunity of hearing. Accordingly, both appeals were partly allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
