Dulu Mahato Vs DCIT (ITAT Ranchi)
In these two appeals for AYs 2012-13 & 2013-14, Assessee, along with his four brothers, jointly owned an ancestral residential property at Dhanbad. AO estimated that renovation/construction of the said ancestral house cost ₹55 lakhs & apportioned ₹27.5 lakhs each in two years. Without any DVO valuation & without examining actual contributions, AO taxed ₹27.5 lakhs in each year entirely in the hands of Assessee alone, treating it as unexplained investment. CIT(A)/NFAC confirmed the addition.
Before Tribunal, Assessee argued that the property originally belonged to his late father & after his demise, all brothers jointly inherited & jointly renovated the property. AO himself issued notices u/s 133(6) to the brothers, who replied confirming that renovation was done collectively out of their own income. Therefore, at best, any investment should be spread among all brothers, not only in assessee’s hands. Further, AO’s own assessment order admitted it is ancestral property. Assessee also pointed out that AO is not a competent authority to estimate cost of construction & no reference was made to DVO as mandated by law. The estimation of ₹55 lakhs was purely on guesswork, unsupported by evidence or valuation report.
Department contended that since renovation is admitted, Assessee should have disclosed his share of investment in the return & failure justified addition.
