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March, 14th 2013
%                                      Judgment delivered on: 06.03.2013

+       ITA 434/2012

        CIT                                                  ..... Appellant


        SADHNA GUPTA                                         ..... Respondent

Advocates who appeared in this case:
For the Petitioner           : Mr Sanjeev Rajpal, Sr. Standing Counsel.
For the Respondent           : Mr Piyush Kaushik, Advocate.




1.      This appeal has been filed by the revenue under section 260A of

the Income Tax Act, 1961 (hereinafter referred to as the said Act)

being aggrieved by the order dated 30.11.2011 passed by the Income

Tax Appellate Tribunal in ITA No.5266(Del)/2010 relating to

assessment year 2007-08. It appears that this appeal had been admitted

for hearing by an order passed by this Court on 30.07.2012. However,

learned counsel for the parties pointed out that there is some

ITA434/2012                                                               Page 1 of 6
typographical error in the question of law which has been framed.

Consequently, we reframe the substantial question of law as under: -

        "Whether the Tribunal fell in error in not placing reliance
        on the district valuation officer's report under section
        142A and thereby deleting the addition of `2,81,83,000/-
        made by the assessing officer under section 69B of the
        Income Tax Act, 1961?"

2.      We have heard learned counsel for the parties. The facts are that

the assessing officer made an addition of `2,81,83,000/- under section

69B of the said Act on the basis of a valuation report which he

received from the District Valuation Officer (DVO).         This was in

respect of purchase of a property by the respondent/ assessee at 2-B,

Goela Lane, Under Hill Road, Civil Lines, Delhi. The assessee had

disclosed that the said property had been purchased through two sale

deeds dated 03.05.2006 for a total sum of `59,50,000/-. The purchase

consideration as per the sale deeds signified a rate of `8,500/- per sq.

yd., which appeared to be low to the assessing officer and, therefore,

he referred the matter of valuation to the DVO. The DVO submitted

his report and indicated that in his opinion the total fair market value

ought to be `3,41,33,000/- as against the declared value of

ITA434/2012                                                  Page 2 of 6
`59,50,000/-.   The difference of `2,81,83,000/- was added by the

assessing officer by invoking the provisions of Section 69B of the said


3.      Being aggrieved by the said addition the respondent assessee

preferred an appeal before the CIT (Appeals) who deleted the said

addition after referring to the decision K.P. Varghese v. ITO: (1981)

131 ITR 597 (SC). The Commissioner of Income Tax (Appeals) held

that the addition had been made on the basis of the valuation report

without there being any other material to indicate that any extra

consideration had passed in respect of the said purchase of property.

Thereafter, the revenue, being aggrieved by the order passed by the

CIT (Appeals), preferred an appeal before the Tribunal which has been

dismissed by the Tribunal by confirming the deletion made by the CIT

(Appeals). The revenue is in appeal before us.

4.      The only point to be considered is whether the valuation

rendered by the DVO is to be taken into account or not. It has been

argued by the learned counsel for the revenue that the assessing officer

was justified in referring the matter to the DVO for an opinion with

regard to the fair market value of the property and once that opinion

ITA434/2012                                                 Page 3 of 6
has been rendered, the same has to be taken into account and if that

were to be so, the addition of `2,81,83,000/- would be fully justified.

Consequently, it was submitted by the learned counsel for the revenue

that the Tribunal had erred in deleting the addition. On the other hand

the learned counsel for the respondent referred to a Division Bench

decision of this Court in the case of CIT v. Shri Puneet Sabharwal :

(2011) 338 ITR 485. In that decision a specific question had been

raised as to whether the Income Tax Appellate Tribunal was right in

holding that notwithstanding the report of the DVO the revenue had to

prove that the assessee had received extra consideration over and

above the declared value of the same. That question was answered by

this Court in favour of the assessee and against the revenue. The

Division Bench in the case of Shri Puneet Sabharwal (supra) had also

placed reliance on the decision of Supreme Court in K.P. Varghese

(supra) as also on another decision of a Division Bench of this Court in

CIT v. Smt. Suraj Devi: (2010) 328 ITR 604 (Delhi) wherein this

Court held that the primary burden of proof with regard to concealment

of income was on the revenue and it was only when the said burden

was discharged that reliance could be placed on the valuation report of

ITA434/2012                                                 Page 4 of 6
the DVO. There are several other decisions of this Court in the same

vein. One such cse being the case of CIT v. Vinod Singhal: (ITA

No.482/2010 decided on 05.05.2010) where, again, reliance was

placed on the very same decision of the Supreme Court in K. P.

Varghese (supra) and also on a decision of this Court in CIT v. Smt.

Shakuntala Devi: (2009) 316 ITR 46. It was observed that there must

be a finding that the assessee had received an amount over and above

the consideration stated in the sale deed and for this the primary burden

was cast on the revenue. It is only when this burden is discharged by

the revenue that it would be permissible to rely upon the value as given

in the valuation report of the DVO.

5.      The law seems to be well settled that unless and until there is

some other evidence to indicate that extra consideration had flowed in

the transaction of purchase of property, the report of the DVO cannot

form the basis of any addition on the part of the revenue. In the

present case there is no evidence other than the report of the DVO and,

therefore, the same cannot be relied upon for making an addition. In

these circumstances, the question which has been framed is decided in

ITA434/2012                                                  Page 5 of 6
favour of the assessee and against the revenue.     The appeal is


                                  BADAR DURREZ AHMED, J

                                                  R.V.EASWAR, J
MARCH 06, 2013

ITA434/2012                                            Page 6 of 6
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