|CORAM:||N. K. Billaiya (AM), Vivek Varma (JM)|
|SECTION(S):||142A, 50C, 69B|
|CATCH WORDS:||DVO's valuation report|
|DATE:||October 8, 2014 (Date of pronouncement)|
|DATE:||October 12, 2014 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|Even if s. 50C addition can be made on the basis of stamp duty valuation, addition u/s 69B cannot be made barely on the basis of DVO's report|
At the outset, we have to demarcate the territory of the case, i.e. application of section 50C and addition to be made u/s 69C. We find that both the sections operate independently i.e. to say that section 50C shall bet attracted where there is a transfer of property by the assessee and receives sales consideration. This automatically puts into oblivion the purchase part of the agreement. Hence, the argument of the assessee before the CIT(A0 was correct that provisions of section 50C do not apply on purchase part of the agreement.
12. Coming to application of section 69B, it is attracted if the AO finds that the amount expended on making investment exceeds the amount recorded in the books or the explanation, as made by the assessee is not acceptable. From the orders of the revenue authorities, we have find that the material available with the AO was report of the
DVO, and the report of the registered valuer. As seen from the impugned order, the remand report does not talk about any thing factual but it only says that since the DVO valuation is closer to stamp duty valuation, hence DVO’s report is being adopted. As such there is nothing in the report of the DVO. The only acceptable document is the report of the registered valuer, which has same basis.
13. We find that the observation of the CIT(A) that the AO must have some reasonable material to put the leash on the assessee. But the only material available with the AO was the DVO’s estimated report, which is based entirely on comparative transactions in the close vicinity. This, cannot become the basis of adoption of financial valuation.