ACIT Vs. Shri Jayantilal T. Jariwala (ITAT Ahmedabad)- In thie Case Assessing Officer found that assessee had constructed a residential house, B-3, Mamta Flats, Surat and plot No.158/21 GIDC, Pandesara, Surat. The AO was not satisfied with the cost of construction shown in the books of accounts. He formed an opinion that there was an under-invoicing of bills, and therefore, the ld. AO made reference to the valuation officer, who has determined the value of the property higher than declared cost and on the strength of valuation report AO has made the addition to the Income of the Assessee.
on Appeal ITAT held that Mere valuation report is not sufficient to conclude that the assessee has made unexplained investment. From perusal of the assessment, nowhere it reveals that inspite of search, Revenue was in a position to lay its hands on any material exhibiting the unexplained investment made by the assessee, over and above one stated in the books of accounts. Further, we find that the ld.First Appellate Authority has deleted the addition by following the order of the ITAT in the case of Smt. Ilaben Bharat Shah in ITA No.839/Ahd/2007 dtd. 17-8-2007 for the Asstt.Year 2004-05. The ld.First Appellate Authority is of the opinion that the addition cannot be made merely on the basis of DVO’s report, and there should be some other incriminating material to support the case of the Revenue.
IN THE INCOME TAX APPELLATE TRIBUNAL
“C” BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
IT(SS)A No.65/Ahd/2009 With CO No.236/Ahd/2009
Asstt. Year: 2004-2005
ACIT Vs. Shri Jayantilal T. Jariwala
Revenue by : Smt.Vibha Bhalla, CIT-DR
Assessee by : Shri Sanjay Kapadia with Shri Ankur D. Shah
Date of Hearing : 25/08/2015
Date of Pronouncement: 28/10/2015
ORDER
PER BENCH:
Revenue is in appeal before us against the order of the ld.CIT(A)- II dated 17.6.2009 for the Asstt.Year 2004-05.
2. On receipt of notice in the Revenue’s appeal, the assessee has filed cross-objections bearing no.CO No.236/Ahd/2009. The Revenue has taken twelve grounds of appeal, but the grievance revolves around a single issue whereby it has pleaded that the ld.First Appellate Authority has erred in deleting the addition of Rs.6,31,300/- made by the AO on account of unexplained investment made by the assessee in construction of residential building.
3. The brief facts of the case are that a search operation under section 132 of the Income Tax Act was carried out at the premises of Colourtex Group of Surat on 26.7.2006. The assessee is a member of this group and his premises were also searched on 26.7.2006. A notice under section 153A was issued upon the assessee. To this notice, the assessee has filed his return of income on 31.3.2007 declaring total income at Rs.63,45,634/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Income Tax Act dated 3.3.2008 was issued and served upon the assessee. The ld.AO has rejected the books result of the assessee. He found that the assessee had constructed a residential house, B-3, Mamta Flats, Surat and plot No.158/21 GIDC, Pandesara, Surat. The AO was not satisfied with the cost of construction shown in the books of accounts. He formed an opinion that there was an under-invoicing of bills, and therefore, the ld.AO made reference to the valuation officer, who has determined the value of the property vide letter no.5/2/VOB/2008- 09/193 dated 22.12.2008, No.5/2/VOB/2008-09/181 dated 22.12.2008. The ld.AO has reproduced the part of the report indicating name of the investors, property description, valuation period, declared cost, estimated cost and the difference. These details are as under:
