The Commissioner Of Income Tax, Ajmer v. Swami Complex Pvt. Ltd., Pandit Deen Dayal Marg, Near Indiamotors, Ajmer

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 717 / 2008 The Commissioner of Income Tax, Ajmer. ----Appellant Versus Swami Complex Pvt. Ltd., Pandit Deen Dayal Marg, Near IndiaMotors, Ajmer. ----Respondent _____________________________________________________ For Appellant(s) : Mrs. Parinitoo Jain with Ms. Shiva GoyalFor Respondent(s) : Mr. Anant Kasliwal with Ms. Charu Pareek _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 26/08/2017 1. By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal of the department. 2.This court while admitting the appeal on 18.11.2009 framedfollowing substantial question of law:- 1. Whether under the facts and in thecircumstances of the case, the Tribunal wasjustified in deleting the addition of Rs.79,50,538-made u/s 69 of the Income Tax Act, which wasbased on valuation report of DVO. 2. Whether the DVO’s report received u/s 55A tocalculate capital gain in the hand of seller can beconsidered for the purpose of calculatingundisclosed investment u/s.69 in the hands ofpurchaser assessee? 3. The facts of the case are that during the year, the assessees had purchased plots from India Motors Pvt. Ltd. which, as per the AO, was for the amount higher than the consideration declared inthe sale deeds, as the sub-Registrar, Property, had registered theproperties on higher value and the D.V.O. had also determined thevalue on higher figure. 3.1The assessee, Swami Complex Pvt. Ltd. had purchased a plotof land admeasuring 842.22 sq. yards at a consideration of Rs.45.00 lakhs on 19.05.2000. The property was, however, registeredat a value of Rs. 1,19,80,000/- as per the valuation of DIGStamps[Collector(Stamps)]. Reference was made to the D.V.O. ofestimating fair market value of the property as on date of sale aswell as on 01.04.1981 under section 55A of the Act in the case ofthe seller, India Motors Pvt. Ltd. The total land sold by IndiaMotors Pvt. Ltd. was of the area of 2793 sq. yards and structure.Out of this land, the seller had sold plots of different areas andsize to the assessees and others like Smt Maya Moolani and Smt.Pushpa Moolani, etc. In cases of Smt. Maya Moolani and SmtPushpa Moolani, their plots were registered @ Rs 20,000/- per sq.yd. The buyer K.S. Apparels Pvt. Ltd(one of the assessees) hadalso got its plot registered and on appeal, the value wasdetermined at Rs. 11,000/- per sq. yard by Board ofRevenue(Rajasthan), Ajmer. Based on DVO's report, the fairmarket value of the land in the case of Swami Complex Pvt. Ltd,was valued at Rs.14,783/ per sq. yard, which comes to Rs.1,24,50,538/- as disclosed purchase consideration of Rs. 45 lakhsThus, the amount in difference worked out at Rs. 79,50,538 wasadded under section 69 of the Act as undisclosed investment in the income of Swami Complex Pvt. Ltd. The addition wasquestioned by the assessee before the ld, CIT(A) with thecontentions that the addition has been made on the presumptionthat the assessee could have paid more than what has beenmentioned in the registered sale deed without any basis orevidence. 4.Counsel for the respondent Mr. Kasliwal has relied upon thefollowing decisions:- 4.1In CIT vs. Bhanwarlal Murwatiay (2008) 215 CTR 489 (Raj.)wherein it has been held as under:- the income of Swami Complex Pvt. Ltd. The addition wasquestioned by the assessee before the ld, CIT(A) with thecontentions that the addition has been made on the presumptionthat the assessee could have paid more than what has beenmentioned in the registered sale deed without any basis orevidence. 4.Counsel for the respondent Mr. Kasliwal has relied upon thefollowing decisions:- 4.1In CIT vs. Bhanwarlal Murwatiay (2008) 215 CTR 489 (Raj.)wherein it has been held as under:- “7. We have considered the submissions, and aftergoing through the impugned orders, are of the viewthat all said and done, the question as to what wasthe price of the land at the relevant time, is a purequestion of fact. Apart from the fact, that even if, itwere to be assumed, that the price of the land wasdifferent than the one, recited in the sale deed,unless it is established on record by theDepartment, that as a matter of fact, theconsideration, as alleged by the Department, didpass to the seller from the purchaser, it cannot besaid, that the Department had any right to makeany additions. It is a different story as to, to whatextent and how, the statement of Suresh KumarSoni, as given before different authorities, atdifferent times, can be used against the assessee.More so, when none of the witnesses wereexamined before the AO, and the assessee did nothave any opportunity to cross examine them.” 4.2In Dev Kumar Jain vs. ITO (2009) 309 ITR 240 (Delhi)wherein Delhi High Court held as under:- “7. We find that a Division Bench of this Court in thecaseCITv.Smt.NiloferI.Singh[2009]309ITR233(Delhi) has held that theprovisions of Section 55A of the Act apply onlywhere the Assessing Officer is required to ascertain the "fair market value" of a capital asset. In a casewhere capital gains have to be brought to tax theprovisions of Sections 45 and 48 of the Act comeinto play. Section 45(1A) of the Act provides thatany profit or gains arising from the transfer of asseteffected in the previous year shall be chargeable toIncome Tax under the head "Capital gains". Itstipulates that capital gains shall be computed bydeducting from the "full value of consideration"received or accruing as a result of the transfer ofthe capital asset, the amount of expenditureincurred wholly and exclusively in connection withsuch transfer as also the cost of acquisition of theasset and the cost of any improvement thereto. TheDivision Bench went on to hold that a combinedreading of Section 45(1A) and Section 48 of the Actwould show that it is apparent that when a sale ofproperty takes place, the "capital gains" arising outof such a transfer has to be computed by looking atthe "full value of the consideration" received oraccruing as a result of such transfer. It went on tohold that the expression "full value of saleconsideration" is not the same as "fair marketvalue" as appearing in Section 55A of the Act. Incoming to this conclusion the Division Bench of thisCourt relied upon the Supreme Court judgment inthe case of CIT v. George Henderson and Co. Ltd.[1967]66ITR622(SC) as also the judgment of theSupreme Court in the case of CIT v. GillandersArbuthnot and Co. [1973]87ITR407(SC) whereinthe expression "full value of consideration" wasinterpreted in the context of pari materia provisionsfound in the Income Tax Act, 1922. Based on thesedecisions the Division Bench concluded that for thepurpose of computing "capital gains" there is nonecessity for computing the "fair market value" and,therefore the Assessing Officer could not havereferred the matter to the Valuation Officer. 8. Before us the learned Counsel for the Revenuesubmitted that this was a case where the assesseehad not supplied documents, therefore, the ratio ofthe judgment in the case of the Smt. Nilofer I.Singh [2009]309ITR233(Delhi) was not applicable.We are not in agreement with the submission madeby the learned counsel for the revenue for thereasons that there is nothing on record to show thatthe assessee received a consideration for the sale ofthe saidproperty in excess of that which was shownin the agreement to sell. That being the case thedecision in the case of Smt. Nilofer I. Singh (supra)would bind the revenue. The tribunal, in our view erred in accepting the stand of the revenue thatactual sale consideration recorded in the agreementto sell would be substituted by the value arrived atby the DVO u/s 55(A) of the Act. The question oflaw as framed is answered in favour of the assesseeand against the revenue.” 4.3In CIT vs. Nilofer I Singh (2009) 309 ITR 233 (Delhi) wherein it has been held as under:- 4. Capital gains are subjected to tax in view ofSection 45 of the said Act. Section 45(1) of the Actprovides that any profits or gains arising from thetransfer of a capital asset effected in the previousyear shall be chargeable to Income Tax under thehead "Capital gains". It stipulates that capitalgains shall be computed by deducting from the"full value of consideration" received or accruingas a result of the transfer of the capital asset, theamount of expenditure incurred wholly andexclusively in connection with such transfer as alsothe cost of acquisition of the asset and the cost ofany improvement thereto. From a combinedreading of Section 45(1) and Section 48 of thesaid Act, it is apparent that when a sale ofproperty takes place, the capital gains arising outof such a transfer has to be computed by lookingat the full value of the consideration received oraccruing as a result of such transfer. From the saidfull value of the consideration, the amount ofexpenditure incurred wholly and exclusively inconnection with such transfer as also the cost ofacquisition of the asset and the cost of anyimprovement thereto have to be deducted. In thepresent case, there is no dispute with regard tothe expenditure incurred in connection with thetransfer or with regard to the cost of acquisition ofthe asset and the cost of any improvement. Theentire dispute centres upon the expression "fullvalue of consideration". According to the revenue,the full value of consideration refers to the fullmarket value. However, according to the assessee,the expression "full value of consideration" cannothave any reference to the fair market value. 7. In view of several decisions of the SupremeCourt, it is clear that the expression ‘full’ value ofconsideration’, that has been used in section 48,does not have any reference to the market value,but only to the consideration referred to in the sale deeds as the sale price of the assets which havebeen transferred. 7. In view of several decisions of the SupremeCourt, it is clear that the expression ‘full’ value ofconsideration’, that has been used in section 48,does not have any reference to the market value,but only to the consideration referred to in the sale deeds as the sale price of the assets which havebeen transferred. Section 55A begins with the expression "with aview to ascertain the fair market value of a capitalasset". In other words, the reference to a ValuationOfficer under Section 55A is for the object ofascertaining the fair market value of a capitalasset. It is only when the Assessing Officer isrequired to ascertain the fair market value of acapital asset that the provisions of Section 55A canbe invoked. There may be certain situations wherethe Assessing Officer is required to determine thefair market value. One of the situations is indicatedin Section 45(4) of the said Act where the profits orgains arising from the transfer of a capital asset byway of distribution of capital assets on thedissolution of a firm or other association of personsor body of individuals are to be computed is inquestion. In such a situation, the provision itselfmakes it clear that for the purposes of Section 48,the fair market value of the asset on the date ofsuch transfer shall be deemed to be the full valueof the consideration received or accruing as a resultof the transfer. In a situation, as one obtainingunder Section 45(4) of the Act, since there is noapparent consideration for the transfer of the asset,the full value of the consideration has to bedetermined in an indirect manner and that indirectmanner has been indicated to be the fair marketvalue of the asset. Thus, when the fair marketvalue of the asset under Section 45(4) is to bedetermined, it is obvious that Section 55A of theAct would get triggered and a reference to theValuation Officer would be necessary. Another instance where the fair market value wouldhave to be determined is provided in Section45(1A) of the Act. Under this provision, where theassessee receives an amount from the insurer onaccount of damage or destruction to any capitalasset as a result of natural calamities such asfloods or fires, explosions etc., the question ofdetermining the capital gains is also connected withthe determination of the fair market value of theasset on the date of receipt of such amounts fromthe insurer. In Section 45(1A) of the said Act also,it is indicated that for the purposes of Section 48 ofthe said Act, that is for computation of capitalgains, the value of any money or the fair marketvalue of the asset on the date of such receipts shallbe deemed to be the full value of the considerationreceived or accruing as a result of such transfer of capital asset. In this situation also the AssessingOfficer would be required to compute the fairmarket value of the asset and therefore, areference to the Valuation Officer under Section55A of the said Act would be necessary. But, the facts of the present case are entirelydifferent. The present case involves salessimpliciter where the full value of theconsiderations are the sale prices of the twoproperties indicated above. For the purposes ofcomputing capital gains in such a case as the onebefore us, there is no necessity for computing thefair market value and, therefore, the AssessingOfficer could not have referred the matter to theValuation Officer.” 4.4In CIT vs. Gauranginiben S. Shodhan (2014) 367 ITR238 (Gujarat) wherein Gujarat High Court held as under:- But, the facts of the present case are entirelydifferent. The present case involves salessimpliciter where the full value of theconsiderations are the sale prices of the twoproperties indicated above. For the purposes ofcomputing capital gains in such a case as the onebefore us, there is no necessity for computing thefair market value and, therefore, the AssessingOfficer could not have referred the matter to theValuation Officer.” 4.4In CIT vs. Gauranginiben S. Shodhan (2014) 367 ITR238 (Gujarat) wherein Gujarat High Court held as under:- Taking the question of ascertaining the fair marketvalue on the date of sale, we notice that section48, which is also contained in chapter IV of the Actpertains to method of computation of capital gain.A detailed mechanism has been provided for suchcomputation of the income chargeable under thehead "Capital Gains". It provides, inter alia, thatthe income chargeable under the Head "CapitalGains", shall be computed by deducting from thefull value of the consideration received or accruingas a result of the transfer of the capital asset, theamounts mentioned therein that is the expenditureincurred wholly and exclusively in connection withsuch transfer and the cost of acquisition of theasset and the cost of any improvement thereto.Main thrust of section 48 of the Act, therefore, isthe full value of consideration received or accruingas a result of the transfer of the capital asset asreduced by expenditure mentioned therein and thecost of acquisition of the asset. Section 55A, as wehave noticed, refers to the reference to DVO forascertaining the fair market value of a capitalasset. Such ascertainment of fair market value withthe aid of the DVO's report would have norelevance for the purpose of determining full valueof consideration received or accruing as a result ofthe transfer of the capital asset for the purposes ofsection 48 of the Act. In that view of the matter, the reference to DVO forascertaining the fair market value of the capitalasset as on the date of the sale in the present casewould be wholly redundant. We are conscious that section 50C of the Actintroduced in the statute by Finance Act, 2002 witheffect from 1.4.2003 now provides for specialprovision for full value of consideration in certaincases. The said section provides a deeming fictionunder which consideration received or accruing as aresult of transfer of a capital asset being land orbuilding or both can be replaced by the valueadopted or assessed or accessible by stampvaluation authority for the purpose of payment ofstamp duty in respect of such transfer. Subsection(2) of section 50C, however, permits the assesseeto dispute such valuation adopted by the StateStamp Valuation Authority and in such a case, it isopen for the Assessing Officer to refer the valuationof the capital asset to a Valuation Officer. Present isnot a case of this nature, as is clear from theassessment order in which the Assessing Officerhas referred the reference to DVO. Even otherwise,we are informed that in the present case, saleconsideration reflected in the sale deeds was higherthan the valuation adopted by the Stamp ValuationAuthority. 4.5In CIT vs. Manjula M. Udankat (2015) 55 taxmann.com (Gujarat) wherein it has been held as under:- 4. Learned advocate for the appellant has invitedour attention to a decision in the case of HiabenJayantilal Shah V. Income Tax Officer, reported inMANU/GJ/0833/2008MANU/GJ/0833/2008 : [2009]310, ITR 31 : [2009] 181 TAX.man 191(Guj.) andsubmitted that the issue involved in this appeal issquarely covered by the aforesaid decision.Paragraphs 27 and 28 of the above decision readsas under:- 4.5In CIT vs. Manjula M. Udankat (2015) 55 taxmann.com (Gujarat) wherein it has been held as under:- 4. Learned advocate for the appellant has invitedour attention to a decision in the case of HiabenJayantilal Shah V. Income Tax Officer, reported inMANU/GJ/0833/2008MANU/GJ/0833/2008 : [2009]310, ITR 31 : [2009] 181 TAX.man 191(Guj.) andsubmitted that the issue involved in this appeal issquarely covered by the aforesaid decision.Paragraphs 27 and 28 of the above decision readsas under:- 27. The record of the petition does not indicate asto what was the opinion formed by the AssessingOfficer before making reference to the DVO. It isonly from the undated communication of the DVOthat one gathers that the valuer has undertakenestimation of the fair market value of the propertyas on 1.4.1981 and 28.12.1995. However, in theaffidavit-in-reply the Assessing Officer himselfstates to ascertain the fair market value of theproperty, a reference was made by this office to the Valuation Officer on 26.04.1996, since according tothis office, the value declared by the assessee as onthe date of execution and registration of the saledeed was lower by more than 25 per cent. Thepetitioner filed a return on 27.8.1996, for theassessment year 1996-97 and the fair market valueas on 1.4.1981 was shown at Rs. 6,25,000/-. Thecapital gain was worked out at Rs. 17,43,750/-taking the sale value of the property at Rs.17,50,000/- as per the banakhat dated 29.11.1994.In the above background of the it is humblysubmitted that since the capital gain is required tobe worked out on the fair market value of theproperty on the date of the sale deed, respondentNo. 1 has acted within jurisdiction for makingreference to the value officer under the provisionsof Section 55A of the Act. 14. Therefore, it is apparent that the AssessingOfficer had, at no point of time, formed an opinionthat the fair market value, in substitution of the costof acquisition, as claimed by the assessee wasrequired to be disturbed because prescribedparameters were fulfilled. In fact, as can be seenfrom the affidavit-in-reply the only ground on whichreference was made to the valuation officer wasthat the value declared by the assessee as on thedate of the execution and registration of the saledeed was lower by more than 25 per cent. There isno provision in the act which permits the AssessingOfficer to disturb the sale consideration, at leastSection 55A of the cannot be invoked for the saidpurpose" 5. We have heard learned advocates for both theparties and perused the material on record. Whiledeciding the Appeal, the Tribunal in paragraph No. 6of its order observed as under:- "6. We have duly considered the rival contentions. Areference to the Valuation Officer is to be madeunder section 155A of the Act. Clause(A) of Section55A has a bearing on making such a reference. Itreads as under: "55.A. With a view to ascertaining the fair marketvalue of a capital asset for the purposes of thisChapter, the Assessing Officer may refer theValuation of capital asset to a Valuation Officer:-(a) in a case where the value of the asset asclaimed by the assessee is in accordance with theestimate made by a registered valuer, if theAssessing Officer is of opinion that the value soclaimed is less than its fair market value; "6. We have duly considered the rival contentions. Areference to the Valuation Officer is to be madeunder section 155A of the Act. Clause(A) of Section55A has a bearing on making such a reference. Itreads as under: "55.A. With a view to ascertaining the fair marketvalue of a capital asset for the purposes of thisChapter, the Assessing Officer may refer theValuation of capital asset to a Valuation Officer:-(a) in a case where the value of the asset asclaimed by the assessee is in accordance with theestimate made by a registered valuer, if theAssessing Officer is of opinion that the value soclaimed is less than its fair market value; The provision specifically provides that if theAssessing Officer is of the opinion that the valuedisclosed by the assessee is less than the fairmarket value only, then he can make a reference tothe DVO. Now the moot question is as to how theopinion is to be formed by the Assessing Officer.Whether this opinion is subjective or guided bysome judicious actions. The formation of opinionshould have rational connection with the materialbrought on record. It should not be based onextraneous or irrelevant reasons. In the presentcase, the Assessing Officer before making areference to the Valuation Officer has not broughtanything on the record indicating that the assesseehas disclosed lesser sale price. There is nothing onthe record which can suggest to ignore the report ofthe registered valuer and to adopt the report of theValuation Officer. Both these persons are technicalpersons and before accepting the evidence of anexpert, there should be corroboration of some othermaterial. Taking into consideration the overall factsand circumstances of the case, we are of theopinion that the ld. Assessing Officer ought to havenot made a reference to the DVO for determinationof the fair market value of the property in dispute.The report of the DVO alone is not sufficient forestimating the capital gains at Rs. 12,28,907/-." 4.6In PCIT vs. Quark Media House India Pvt. Ltd. (2017) 391ITR (P & H) wherein it has been held as under:- First of all, the Assessing Officer must determinewhether the price stated in the agreement for sale isinfact the price bargained for by the parties thereto.In other words, the full value of the consideration isneither the market value nor necessarily the pricestated in the document for sale but the price actuallyarrived at between the parties to the transaction. Iftherefore it is found that the price actually arrivedupon between the parties is not the price reflected inthe document, it is the price bargained for by theparties to sale that must be considered fordetermining the capital gain under section 48. Even on principle there is no reason to denude theAssessing Officer the right to draw an inferenceespecially an irresistible inference. Take for instancea case where the property worth crores of rupees issold for merely ` 1 lakh and there is no explanationfor the same despite the parties being at armslength. The Assessing Officer is not bound to accept the statement in the sale deed unless he can provethat additional consideration was paid. The initialburden to prove the same is undoubtedly on theDepartment. But in such a case the onus clearly shiftupon the assessee. If the assessee is unable to offeran explanation, the Department must be taken tohave discharged the burden. It cannot be said that the price mentioned in thedocument is sacrosanct and that the same must beconsidered to be the price bargained between theparties to the transaction. That would indeed resultin an absurdity for the parties could then by merelystating an incorrect price in the sale deed avoid thetax on capital gains altogether. the statement in the sale deed unless he can provethat additional consideration was paid. The initialburden to prove the same is undoubtedly on theDepartment. But in such a case the onus clearly shiftupon the assessee. If the assessee is unable to offeran explanation, the Department must be taken tohave discharged the burden. It cannot be said that the price mentioned in thedocument is sacrosanct and that the same must beconsidered to be the price bargained between theparties to the transaction. That would indeed resultin an absurdity for the parties could then by merelystating an incorrect price in the sale deed avoid thetax on capital gains altogether. The full value of consideration referred to in Sections45 and 48 of the Act refers to the full value actuallyreceived or accruing and not what the parties merelystate or declare in the sale deed as was paid orpayable and received or accruing. Such a view wouldas we mentioned earlier enable a party to avoid theliability to tax on account of capital gains by merelystating the incorrect price to be the consideration forsale or transfer of the asset. That could not havebeen the intention of the legislature. The assessee submitted that there was no findingthat it received any consideration other than thatshown in the sale agreement. This is correct. Theassessment order does not proceed on the basis thatthe assessee received any amount in addition towhat is stated in the sale deed. It proceeds only onthe basis that the assessee and the purchaser beingrelated parties, the property was sold at a very lowprice. The CIT(A) also noted that the AssessingOfficer had not shown that the assessee hadreceived any consideration other than theconsideration mentioned in the sale agreement. TheCIT(A) further noted that the Assessing Officer hadunnecessarily emphasized that the assessee and thepurchaser were related parties and therefore, thevendee was in a position to exercise influence in thedecision of the assessee and hence the assessee soldthe property at the price below the market price.The Tribunal also noted this aspect in paragraph-9.The Tribunal observed that it was not the case of theAssessing Officer that the assessee received aconsideration more than what was mentioned in thesale deed and that the Assessing Officer hadtherefore, erred in considering the fair market value. In the case of related parties, there is yet anotheraspect. The presumption against the value beingunderstated (not undervalued) is greater whereparties are connected or related. Their relationship isa factor which could justify a price lower than themarket price. Where parties are strangers theremust be some explanation for an undervaluation. We must, therefore, proceed on the basis that it isnot the case of the revenue that the assesseereceived any amount other than what wasmentioned in the sale agreement. In this view of thematter and in view of the judgments referred toearlier especially the judgments of theSupremeCourt it must follow that there was nooccasion for the Assessing Officer to determine thefair market value. The Assessing Officer was onlyconcerned with the amounts actually received by theassessee. The amount actually received wasadmittedly the amount mentioned in the saleagreement. It follows then that the reference to the DVO undersection 55A was without jurisdiction. Section 55Aopens with the words “with a view to ascertainingthe fair market value of a capital asset for thepurposes of this Chapter, the Assessing Officer mayrefer the valuation of capital asset to a ValuationOfficer”. However, in view of the judgments of theSupreme Court, what falls for determination undersection 48 is not the fair market value of the capitalasset but the full value of the consideration receivedor accruing as a result of the transfer of the capitalasset. It follows then that the reference to the DVO undersection 55A was without jurisdiction. Section 55Aopens with the words “with a view to ascertainingthe fair market value of a capital asset for thepurposes of this Chapter, the Assessing Officer mayrefer the valuation of capital asset to a ValuationOfficer”. However, in view of the judgments of theSupreme Court, what falls for determination undersection 48 is not the fair market value of the capitalasset but the full value of the consideration receivedor accruing as a result of the transfer of the capitalasset. Section 55A is not redundant on account of thisview. It would apply to the provisions of Chapter IVwhich require the determination of the fair marketvalue of capital assets. Thus the Assessing Officer proceeded on theerroneous basis that as the assessee and thepurchaser are interconnected and the property wassold at an undervalue he had the jurisdiction toinvoke the provisions of section 55A or evenotherwise to determine the fair market value. The reliance upon Section 50C is of no assistance tothe Revenue either. Mrs. Dugga’s submission thatthe Assessing Officer’s can be supported undersection 50C is not well founded. Even assuming thatthe Assessing Officer was entitled to invoke Section50C to have the fair market value determined, it would make no difference. In view of sub section (3)the rate adopted, assessed or assessable by theStamp authority would prevail. It is common groundthat in this case the consideration stated in the saledocument is even higher than the valuation by theStamp authority. 5.We have heard counsel for the parties. 6.Taking into consideration the observations made by thetribunal and more particularly DVO report which was pertaining tothe case in which the purchaser is Swami Complex Pvt. Ltd.wherein the tribunal observed as under:- 6. Likewise in the case of K.S. Apparels Pvt. Ltd., thecompany had purchased a piece of ld. admeasuring430.50 sq. yards on 16 .3.2000 from India MotorsPvt. Ltd. for a consideration of Rs. 25.00 lakhs. Thesub-Registrar of properties valued that piece of landRs. 20,000/- per sq. yard. which was reduced toRs. 11.000/- per sq. yard in appeal by the RevenueBoard. The DVO in the case of seller valued theproperty at Rs.14,783- per sq. yard and,accordingly, the value was estimated at Rs.63,64,081/- The difference of Rs. 38,64,081/- wastreated as undisclosed investment of the assesseeunder section 69 of the Act. The Revenue Board hasfinally valued the property at Rs. 47,35,500/-. .i.e..Rs. 11.000- per sq. yard. Similar contentions wereraised against the addition before the ld. CTT(A) inthe case of present assessee as well. The ld. CIT(A)in this case has, however, not given full relief. In thecases of other assessees, the ld. CIT(A) has deletedthe addition mainly on the basis that valuation forthe purpose of payment of stamp duty cannot bemade the basis for estimating the fair market valueto verify the correctness of the consideration pricedeclared in the sale deed The Department hasquestioned first appellate orders deleting theadditions in the cases of Swami Complex Pvt. Ltd.and Shri Bal Mukand Parihar, whereas the party is incross appeal in the case of K.S. Apparels Pvt. Ltd. Inthe case of K S. Apparels Pvt. Ltd., the ld. CIT(A)has directed to take the consideration at Rs.47,35,500/- as considered by the Revenue Board as against Rs. 25.00 lakhs shown by the assessee andRs. 38,64,080/- valued by the AO. against Rs. 25.00 lakhs shown by the assessee andRs. 38,64,080/- valued by the AO. 8. The ld. A/Rs, while reiterating the argumentsadvanced on behalf of the assessees before the ld.CIT(A), submitted that DVO has taken average oftwo values, the one is of Pandit Deen Dayal Marg ofRs.11.000/- per sq. yard and another was ofKutchery Road of Rs. 20,000/- per sq. yard on thebasis of so-called DLC rates: the DLC rates arealways more than the market value, since these aretaken on the basis of the rates arrived at during thecourse of public auction; as per the decision ofHon'ble Supreme Court in the case of CWT vs. P.N. Sikand, 107 ITR 922(SC) the valuation of propertyshould always be made after giving effect todisadvantages attached to it: the AO has all thefailed to appreciate the application of belting methodfor estimating the valuation of odd size of plot ofland, which has been recognized by the Hon'bleSupreme Court as well as by various High Courts. Inthis regard, the ld. A/R referred Page No. 733”Acts and of Gift Wealth Tax” authored byGulanikar(Page 13 of the written submissions) inthe case of Bal Mukand Parihan. Page No. 105. ie.. relevant abstract “Theory& Practice ofValuation” authored by Rosh Namawati. Page No. 275. ie.. copy of relevant abstract fromCommentary of Chaturvedi Pithisariya on ThreeTaxes. The ld. A/R has also placed reliance on thefollowing decisions in this regard 1. CIT vs. Madho Properties, 131 ITR 380(Cal.) 2. Mathura Prasad Rajgharia vs. State of WestBengal, AIR 1971 SC 465(469) 9. In all these appeals, the ld. A/Rs, besides otherrelevant documents, have also placed on record thecopy of sale deeds showing the price in considerationon which the properties in question were agreedupon to be sold. The ld. A/Rs have also placed onrecord lay out plans of the properties to supporttheir contentions that size of the the properties wasodd and due to big drainage etc., severaldisadvantages were attached to them. The ld. A/Rfurther submitted that the stamp value, of coursemay be a factor in drawing an inference, however, can never be a sole basis to make addition undersection 69 of the Act and, in no case, stamp dutyvaluation can be treated to be the purchase price paid, for purpose of making addition of undisclosed income under the said provision Reliance has been placed on the following decisions: 1. Krishna Kumar Rawat vs. Union of India 214 ITR 610(Raj) 2. Hindustan Motors Lud, vs AssESSEE, 249 ITR 424 (Mad) 3. Dinesh Kumar Mittal vs, ITO, 193 ITR 770(All) 4. JCIT v. Smt. Veena Kapoor, 32 Tax World 242(JP) The ld. A/R has also referred the decision of Hon’bleSupreme Court in the case of KP Verghese, 131 ITR597(SC) with this submission that onus always liesupon the Revenue to establish that assessee reallymade payment of sale consideration more thandisclosed in the document. In this regard, thedecision of Hon'ble Jurisdictional High Court in thecase of CIT vs. Raja Narendra, 210 ITR 250(Raj) has also been refened. The ld. A/R submitted thatrecently amended law under section 50C by theFinance Act, 2000 w.e.f. 01.04.2003, I.eassessment year 2003-04 has also made theposition clear, though at a later date. 2. Hindustan Motors Lud, vs AssESSEE, 249 ITR 424 (Mad) 3. Dinesh Kumar Mittal vs, ITO, 193 ITR 770(All) 4. JCIT v. Smt. Veena Kapoor, 32 Tax World 242(JP) The ld. A/R has also referred the decision of Hon’bleSupreme Court in the case of KP Verghese, 131 ITR597(SC) with this submission that onus always liesupon the Revenue to establish that assessee reallymade payment of sale consideration more thandisclosed in the document. In this regard, thedecision of Hon'ble Jurisdictional High Court in thecase of CIT vs. Raja Narendra, 210 ITR 250(Raj) has also been refened. The ld. A/R submitted thatrecently amended law under section 50C by theFinance Act, 2000 w.e.f. 01.04.2003, I.eassessment year 2003-04 has also made theposition clear, though at a later date. 10. Considering the above submissions as well asthe decisions relied upon by the ld. A/Rs. we are ofthe view that in absence of a positive evidence thatthe assessees had actually paid more than theconsideration shown in the sale deeds for thepurchase of their plots, the AO was not justitied tovalue the propetties on higher amount as per DVO'sreport in the case of seller and the value adopted bysub-Registrar for the purpose of stamp duty. In thisregard, we find support from the decisions ofHon'ble Jurisdictional High Court in the case ofKrishna Kumar Rawat vs Union of India(supra).CITvs Raja Narendra(supra) and the decisions of otherHon’ble High courts besides Hon'ble Supreme Courtin the case of K.P. verghese(Supra), relied upon bythe ld. A/R. The sale consideration of propertyagreed upon by the parties depends upon severalfactors, like locality. size, availability, etc. of theproperties, besides needs of the parties. It isalways negotiable, hence the same cannot beequated with the general value fixed for the purposeof payment of stamp duty. The ld CIT(A) has, thus, rightly deleted the additions under section69C of the Act for undisclosed investment in thecases of swami Complex Pvt. Ltd. and Shri Bal Mukand Parihar. The same are upheld. The groundson the issue these appeals(ITA Nos. 449& 461/JP/05) are rejected. The ld. CIT(A) was, however, not justified in sustaining some addition inthis regard in the case of K.s. Apparel Pvt Ltd. onthe basis of the valuation estimated by RevenueBoard, because admittedly, it was meant for thepurpose of payment of stamp duty and the assesseehad went in appeal before the Revenue Boardagainst the valuation adopted by the sub-Registrarfor the purpose of payment of stamp duty which, as discussed above, undisputedly, cannot be thesole basis for valuation of the property in preferenceto the sale consideration declared in the sale deed. The addition sustained by the ld. CIT(A) at Rs. 22,35,500/- in the case of K.S. Apparels Pvt. Ltd. is, thus, directed to be deleted. The issue raised inthe grounds of appeal preferred by the assessee inthis regard is, thus, decided in favour of theassessee. 6.1Taking into consideration the DVO report which was nottaken into consideration in proper manner, in that view of thematter, the issues are answered in favour of the assessee andagainst the department. 7.The appeal stands dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Brijesh 51.