IN HIGH COURT OF DELHI AT NEW DELHI Decided on: May 22, 2015 ITA 340/2015 & C.M.No.9241/2015 COMMISSIONER OF INCOME TAX-14 Appellant Through: Ms. Suruchii Aggarwal, Sr. Standing Counsel, Ms. Lakshmi Gurung, Jr. Standing Counsel and Mr. Abhishek Sharma, Adv. versus ANIL ARORA ..... Respondent Through: Mr.Vikas Jain, Adv. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K. GAUBA MR. JUSTICE R.K. GAUBA (OPEN COURT) % 1. This appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as Act ) challenges order dated 08.08.2014 of Income Tax Appellate Tribunal (hereinafter referred to as ITAT ) in appeal ITA no. 2293/Del/2011 in respect of respondent (assessee) for Assessment Year (AY) 2008-09. 2. assessee is resident individual associated with business of Wings Pharmaceuticals Pvt. Ltd. It is stated that search and seizure action under Section 132 of Act was carried out in case of said company Page 1 of 5 on 14.02.2008 in which assessee was also covered. searches lead to proceedings being initiated under Section 153A, including against assessee. All cases arising out of said search were centralized with Central Circle-2, New Delhi by CCIT (Central), New Delhi by order F.No. CCIT (Central) 2008-09/449 dated 13.08.2008. 3. Notices under Section 143(2) and 142(1) along with questionnaire were issued on 13.08.2009. In course of such proceedings, Assessing Officer (AO), inter alia, noted that property (admeasuring 2275.92 sq. yds.) no. 10/78, Punjabi Bagh (West), New Delhi had been purchased from Mr. Munish Sachdeva and Mr. H.K. Sachdeva by registered sale deed executed on 19.04.2007 by assessee jointly in equal shares with his three brothers for total consideration of `3.90 crores. It was noted that while two other brothers (Mr. K.K. Arora and Mr. R.P. Arora) had paid `1.05 crores each, assessee and his other brother had paid `90 lakhs each for their respective shares. AO suspected it to be case of under- valuation and, thus, referred matter to Departmental Valuation Officer (DVO) to ascertain correct value of property. DVO, in his report, determined value of property at `6,47,72,800/-. On basis of said estimation, AO concluded that assessee had reported value of investment incorrectly. He found value of assessee s share at `1,61,93,200/- and on that basis, discounting `90 lakhs as declared, added `71,93,200/- treating it as undisclosed investment under Section 69B of Act. 4. AO also noted that assessee had declared rental income only of `34,200/- for shop at Bhagirath Place, Chandni Chowk, Delhi which had been purchased by him for `2,55,000/- number of years ago. AO Page 2 of 5 assessed current rental income to be `1,14,000/- on basis of 6% of estimated present value of shop assessed at `19 lakhs. On such conclusions, AO made further addition of `79,800/- to income of assessee under Section 23(4)(b). 5. It is case of Revenue that during search, cash of value of `3,22,200/- was found at residence of assessee. AO held this amount to be unexplained money and, thus, added it to income under Section 69A. 6. assessee preferred appeal no. 322/09-10 against order dated 30.12.2009, which was allowed by CIT(Appeals) by order dated 17.02.2011. Revenue took matter in second appeal to ITAT but unsuccessfully. 7. Revenue urges following as substantial questions of law:- i. Whether ITAT was justified in upholding decision of Ld. CIT and passing order without considering facts of case and without taking into account valuation report relied upon by A.O. u/s 142A of I.T. Act as expert opinion and deleted addition of Rs. 71,93,200/- made u/s 69B of I.T. Act? ii. Whether ITAT, without appreciating provisions of Sec. 23(4) (b) of I.T. act, 1961, was justified in upholding decision of Ld. CIT (A) in deleting addition of Rs.79,800/- on account of Fair Rental Value stating that Ld. CIT (A) had deleted additions on account of difference in market prices of properties as compared with declared values following certain judicial pronouncements and by elaborating facts clearly? iii. Whether ITAT was justified in law in deleting addition of Rs. 3,22,200/- made u/s 69A of I.T. Act 1961 on Page 3 of 5 account of unexplained cash found during course of search proceedings? iv. Whether on facts and circumstances of case, findings of ITAT are perverse? 8. Having heard learned counsel for Revenue, we find contentions urged in appeal to be wholly misplaced. It is fairly conceded (at bar) by counsel for Revenue that reference to DVO for estimation of market value of property in Punjabi Bagh was not based on any material discovered or seized during search operations. counsel, however, referred to case of another property in District Baddi (Himachal Pradesh), in respect of which documentary evidence indicated unaccounted consideration paid by assessee, referred to by AO in para 4.3 of his order. At same time, learned counsel also conceded that no addition to tax liability of assessee on account of said other property has been made. There is no nexus between property in Baddi (Himachal Pradesh) and property in Punjabi Bagh (West). There is undoubtedly no material available to even remotely reflect that consideration over and above what was shown to be paid in registered sale deed of West Punjabi Bagh property was made over to seller. In these circumstances, it was not fair in first place to refer said property for estimation of its market value by DVO. 9. assessment of value by DVO cannot hold primacy over consideration for which property was actually acquired. If there is any difference in shares in consideration borne by four brothers, it is matter of their inter se understanding. Doubts as to real value cannot arise from such fact alone. Page 4 of 5 10. shop in Bhagirath Place is property of assessee. It has been found, as fact, by CIT(Appeals) that shop had remained vacant throughout AY. No evidence was gathered by AO to refute claim of assessee to such effect or to show that rent over and above what was declared was realized. conclusion of CIT(Appeals) to contrary was affirmed by ITAT in order dated 08.08.2014. Both said authorities have also found, on factual inquiry, that assessee had explained recovery during search with help of books of accounts of Wings Pharmaceuticals Pvt. Ltd. There is nothing brought by Revenue to demonstrate that these pure findings of fact are perverse. 11. In foregoing fact and circumstances, no substantial question of law arises. There is no illegality or infirmity in view taken by ITAT. 12. appeal must fail. It is dismissed in limine. R.K. GAUBA (JUDGE) S. RAVINDRA BHAT (JUDGE) MAY 22, 2015 ik Page 5 of 5 Commissioner of Income-tax-14 v. Anil Arora