Ms. Madhu Sharma Vs. Ito - Court Judgment

Excerpt:
income tax act, 1961, section 55a; in favor of: revenue - - : these cross-appeals are preferred on behalf of the assessed as well as the revenue assailing the order of the commissioner (appeals), who has re-estimated sale and purchase price of the properties and recomputed capital gains and the additions under section 69 of the income tax act, 1961. 2. before adverting to the main controversies raised in these appeals, we would like to narrate salient facts of the case. 10,50,000, but the assessing officer was not satisfied with the declared cost of this house and he referred the matter to the dvo under section 55a of the income tax act, relying upon various decisions on a question of valid reference, the dvo estimated the fair market value of the property purchased at rs. 83,40,097. copy of the valuation report was delivered to the assessed and the assessed filed her objections, but the assessing officer was not satisfied with the objections and accepted the fair market value determined by the dvo at rs. 31,74,349. this order of the commissioner (appeals) was not accepted by both the parties and the assessed as well as the revenue have challenged the order of the commissioner (appeals) through these appeals before the tribunal. while estimating the rate of land, the dvo has not even looked into the factual aspect that this plot was an irregular plot and there was a huge public dustbin located just behind the property spreading very bad smell for all the 24 hours throughout the year. originally, it was leasehold property and the lease was granted in favor of shri roop lal by delhi improvement trust, which was later on cancelled because the previous owner was misusing the property and the lease stood cancelled and despite best efforts it had not been restored till date. 9. the learned departmental representative, on the other hand, besides placing heavy reliance upon the orders of the lower authorities has emphatically argued that before making a reference to the dvo, the assessing officer has made local enquiries and after having been satisfied that the assessed has understated the sale price of the ashok vihar property and purchase price of the new rohtak road property, he made a reference under section 55a of the act to dvo to determine the fair market value of these properties. it has to take one stand that too in the hands of the seller of as well as the buyer. in this regard we would like to mention here that once the reference is not valid, the valuation officer did not assume the jurisdiction to make necessary enquiries in order to estimate the fair market value of the property.orders.k. yadav, j.m.:these cross-appeals are preferred on behalf of the assessed as well as the revenue assailing the order of the commissioner (appeals), who has re-estimated sale and purchase price of the properties and recomputed capital gains and the additions under section 69 of the income tax act, 1961.2. before adverting to the main controversies raised in these appeals, we would like to narrate salient facts of the case. during the year in question the assessed has sold her residential house, c - 2/141, ashok vihar, phase - ii, on 15-10-1997, for a sum of rs. 12,00,000. doubting the sale consideration, the assessing officer referred the matter to the valuation officer under section 55a to ascertain the fair market value of the property on the date of sale. the valuation officer accordingly estimated the fair market value at rs. 31,74,349. a copy of the valuation report was made available to the assessed and objections were called for, and in response thereto the assessed filed her objections to the reference of the valuation report, and placed reliance on the decision of the apex court in the case of k.p. varghese v. 170 & anr. : [1981]131itr597(sc) but the assessing officer was not convinced with the explanationns of the assessed and he estimated the sale consideration at rs. 31,74,349 and worked out long-term capital gain at rs. 5,68,019.3. during the year, assessed also purchased a residential house no. 21-b/4, new rohtak road, for a declared price of rs. 10,50,000, but the assessing officer was not satisfied with the declared cost of this house and he referred the matter to the dvo under section 55a of the income tax act, relying upon various decisions on a question of valid reference, the dvo estimated the fair market value of the property purchased at rs. 83,40,097. copy of the valuation report was delivered to the assessed and the assessed filed her objections, but the assessing officer was not satisfied with the objections and accepted the fair market value determined by the dvo at rs. 83,40,097, and difference of rs. 65,90,097 was added to the income of the assessed under section 69 of the act.4. the assessed preferred an appeal before the commissioner (appeals) with the submissions that her house at ashok vihar was constructed on 200 sq. yds. in 1972 with inferior quality material and was of single storey. this house was purchased by the assessed in 1994 for rs. 7,10,000. it was further stated that the assessing officer has calculated the capital gain at rs. 21,02,019 by estimating the sale consideration at rs. 31,74,349 as estimated by the valuation officer and after deducting the cost of another residential house purchased by the assessed on 20-10-1997, at rs. 18,34,000 he worked out the capital gain at rs. 5,68,019 having completely ignored the fact that the assessing officer had made an addition of rs. 65,90,097 under section 69 of the income tax act after having adopted the purchase value of the property at new rohtak road at rs. 83.40,097. she further contended that if the findings of the assessing officer are taken to its logical conclusion then the sale of the property would result in a negative figure under the head 'capital gains'. the commissioner (appeals) reexamined the issue in the light of this argument on capital gain and held that since the investment in the new house is taken at rs. 83,40,097, then deduction for-investment in new house be allowed for full sale consideration. he accordingly directed the assessing officer to recompute the capital gain by considering the investment in the new property at rs. 83,40,097 instead of rs. 18,34,000 and the same would be at nil.5. with regard to purchase price of the property, the commissioner (appeals) confirmed the fair market value adopted by the assessing officer. he, however, directed the assessing officer to recalculate the income from undisclosed sources under section 69 of the act, after giving a due credit of sale proceeds as per the fair market value of the ashok vihar property, which should be taken at rs. 31,74,349. this order of the commissioner (appeals) was not accepted by both the parties and the assessed as well as the revenue have challenged the order of the commissioner (appeals) through these appeals before the tribunal. in the assessed's appeal though the assessed has raised four grounds of appeal, but all relate to the fair market value adopted by the revenue authorities to determine the sale price and purchase price of the property in question. the revenue, however, has challenged the reduction in unexplained investment in the property, which was added under section 69 of the income tax act.6. we have heard the rival submissions and carefully perused the orders of the authorities below. the learned counsel for the assessed, shri o.p. sapra, has categorically argued that the assessed has sold her residential house, c-2/141, ashok vihar, for rs. 12,00,000 on 15-10-1997, to smt. sunita chadha and smt. reena chadha by executing two separate sale deeds for rs. 6,00,000 each. the payment was received through cheque. the purchase price of the above house was accepted in the hands of the buyer. if the assessing officer doubted the sale consideration and estimated it at rs. 31,74,349 he should have reopened the assessment in the case of smt. sunita chadha and smt. reena chadha, and an addition under section 69 of the act would be warranted in their cases, but the revenue did not do the same and straightaway accepted the purchase price declared by these buyers in their individual cases. the learned counsel for the assessed further invited our attention to the copy of form 34-a filed before the assessing officer on the basis of which income-tax clearance was given by the assessing officer for sale of property for rs. 12,00,000 to these buyers. while giving the permission, the assessing officer did not doubt the sale consideration of the property. copies of the sale deeds also placed on record at page nos. 69 to 82 of the compilation of the assessed. to counter the valuation report, the assessed also filed the valuation report of the registered valuer, who adopted the fair market value at rs. 11,74,095, but the assessing officer without commenting on the valuer's report has adopted the value estimated by the dvo. the learned counsel for the assessed further contended that the valuation officer has adopted the value of the property without any basis while estimating the cost of land as has taken the instance of a property situated at tri nagar, new delhi, which is a commercial area whereas the assessed's property is situated in a purely residential area. while estimating the fair market value, the valuation officer did not keep in mind the facts that the rates of land in commercial areas are always quite higher than the residential areas. the learned counsel for the assessed has also placed heavy reliance upon the judgment of the apex court in the case of k.p. varghese v. income tax officer & anr. (supra) with the submission that the value declared by the assessed should be accepted by the revenue unless and until some contrary evidence is brought on record. besides this judgment, he also placed reliance upon the following judgments of various high courts and tribunal(i) cit v. godawari corpn. ltd. : [1993]200itr567(sc) ;(ii) cit v. gulshan kumar (2002) 123 taxman 1111 (delhi);(iii) cit v. smt. k c. agnes : [2003]262itr354(ker) (iv) tribunal's order in the case of smt. preeti n. aggarwala in ita no. 3156 (del) of 1996(v) tribunal's order in the case of shri naresh k aggarwala in ita no. 3364/del/1996;(vi) tribunal's order in the case of shri naval kishore gupta in ita no. 3089/del/2003; and(vii) tribunal's order in the case of shri sanjay chawla v. income tax officer in ita nos. 1392/del/1999 & 3647/del/2002 (reported at (2004) 82 ttj (delhi) 4071.7. with regard to the fair market value of the new rohtak road residential house purchased by the assessed, the learned counsel has raised a similar argument. in addition to that it was further contended that 21-b/4, new rohtak road, is an old house on irregular plot measuring 314 sq. yds. constructed in 1959, which was purchased on 20-10-1997, for rs. 11,34,000 through three sale deeds and later on the assessed spent rs. 14,26,500 on further construction/renovation. the registered valuer's report was also filed, according to which, the fair market value as on 1-1-1998, was shown at rs. 19,15,000. the learned counsel for the assessed further contended that the valuation officer has estimated the fair market value by inspecting the property on 6-5-2000, at rs. 83,40,091. it was further contended that the valuer's report was commented by the registered valuer pointing out that the land rate notified by the union urban affairs ministry on 21-4-1999, applicable to 31-3-2000 for new rohtak road was rs. 6,930 per sq. mt., but the assessing officer has adopted the rate at rs. 24,631 per sq. mt. on the basis of the auction on 19-9-1994, copy of which was never supplied to the assessed. according to the registered valuer the cost of land as on 21-1-1997, was rs. 3,83,321 and the cost of construction was rs. 12,06,817, aggregating at rs. 15,89,191 out of which he had also allowed deductions of 1/3rd due to cancellation of the lease thereby estimating the value of the property at rs. 10,59,461 only. in support of this contention the assessed has filed photocopy of paper cutting of 'the times of india' in which rates of lands of different zones were notified.8. in support of land rates the assessed has filed the copies of sale deeds of other properties situated at new rohtak road and ashok vihar, which were sold during 1997 and in these sale deeds the land rates were shown between rs. 3,920 per sq. yd. and rs. 4,761 per sq. yd. copies of the sale deeds are placed on record, but the lower authorities did not take cognizance of these documentary evidence and without controverting it, they have adopted the rates estimated by the dvo. while estimating the rate of land, the dvo has not even looked into the factual aspect that this plot was an irregular plot and there was a huge public dustbin located just behind the property spreading very bad smell for all the 24 hours throughout the year. originally, it was leasehold property and the lease was granted in favor of shri roop lal by delhi improvement trust, which was later on cancelled because the previous owner was misusing the property and the lease stood cancelled and despite best efforts it had not been restored till date. the dvo took note of this fact, but did not consider it while estimating the fair market value of the property. it is also a fact that the previous owner could not get a customer for the purchase of the said property during the last 10 years and it was the assessed alone, who took the risk of purchasing the said property with such great drawback and disadvantage. the seller, shri r.l. chadha, was an aged and ailing person, who was very keen to sell the property and unfortunately after this sale he passed away within a period of 6 months. he further contended that in the hands of the seller the sale consideration at rs. 10,50,000 was accepted by the revenue. as such, the revenue cannot take double stand for one transaction. if they have adopted the sale consideration at rs. 83,40,097 in the hands of the assessed, the same should be adopted in the hands of the seller while determining the capital gain in his hands. he further contended that in view of the judgment of the apex court in the case of smt. amiya bala paul v. cit : [2003]262itr407(sc) and judgments of various other high courts, the assessing officer is not competent to make a reference to the dvo under section 55a of the income tax act. as such, the report submitted by the dvo cannot be relied on for estimating the fair market value of the property as the reference was made to the dvo by the assessing officer without having any jurisdiction to do the same.9. the learned departmental representative, on the other hand, besides placing heavy reliance upon the orders of the lower authorities has emphatically argued that before making a reference to the dvo, the assessing officer has made local enquiries and after having been satisfied that the assessed has understated the sale price of the ashok vihar property and purchase price of the new rohtak road property, he made a reference under section 55a of the act to dvo to determine the fair market value of these properties. while estimating this fair market value the dvo has called the comments from the assessed and after taking into account the instances of recent sale the dvo estimated the fair market value. the learned departmental representative, mr. salil gupta, has placed reliance on the map with the submission that the assessed's residential house at new rohtak road was in fact situated in karol bagh and its rate should at least be adopted at rs. 24, 150 per sq. yd., in view of the land rates notified in 'the times of india' newspaper on 21-4-1999. since the assessed has understated the sale considerations of the property, the assessing officer was justified in making a reference and adopting the fair market value estimated by the dvo.10. the learned counsel for the assessed in rebuttal has invited our attention to the telephone bills, house-tax bill and the ration card in support of his contention that the property was situated at new rohtak road only and not in karol bagh. he has also filed written submissions besides relying upon the various judicial pronouncements. the learned counsel for the assessed further invited our attention to the fact that this new rohtak road property was finally sold by the assessed in piecemeal. the basement was sold on 21-8-1999, at rs. 4,50,000 and ground floor and first floor was sold on 12-7-2003, at rs. 27,00,000. as such, the total property was sold for rs. 31,50,000. on this property the assessed has made investments in renovation and alterations at rs. 14,26,500. as such, the total cost of this property comes to rs. 25,60,500, which was later on finally sold up to 12-7-2003, for a sum of rs. 30,50,000. the sale price of this property was not disputed by the revenue till date. the learned counsel for the assessed has also made the comments on various judgments referred to by the departmental representative with the submission that the judgments are not applicable in the assessed's case as the revenue has not brought any material on record to prove that something over and above to the cost declared by the assessed has ever passed to the assessed. he also placed heavy reliance upon the recent order of the tribunal in the case of shri sanjay chawla v. ito in ita no. 1392 (del) of 1999 in which the tribunal has examined the judgment of the apex court in the case of shri k.p. verghese v. income tax officer & ors. (supra) and other judgments of various high courts on an issue whether the revenue can discard the sale/purchase consideration shown in the sale deed without bringing anything contrary on record to establish that some amount over and above to the declared sale consideration was passed over to the assessed.11. we have heard both the parties at length and carefully examined the orders of the lower authorities, and the documents placed on record. it is evident from the record that in the impugned assessment year the assessed had declared the sale price of her residential house at rs. 12,00,000 in her return of income and worked out the capital gain, but this sale price of this residential house was not accepted by the revenue despite a fact that the assessed has filed the copy of sale deeds executed in favor of smt. sunita chadha and smt. reena chadha and while estimating the sale price of this property at rs. 31,74,349 following the dvo's report, no effort was made to examine the cost of investment shown by smt. sunita chadha and smt. reena chadha in their return of income. during the course of hearing, the learned counsel for the assessed has emphatically argued that the purchase price of the above house at rs. 12,00,000 stands accepted by the revenue in the hands of smt. sunita chadha and smt. reena chadha. this contention of the assessed was not rebutted by the learned departmental representative. it means once the purchase price of this property was accepted in the hands of the purchasers at rs. 12,00,000 how the same property can be valued at rs. 31,74,349 in the hands of the seller without bringing any cogent material on record to establish that some amount over and above to rs, 12,00,000 was given to the seller by the buyers, smt. sunita chadha and smt. reena chadha. the revenue cannot blow hot and cold in the same breath. it has to take one stand that too in the hands of the seller of as well as the buyer. the property cannot be valued at different rates in the hands of two parties between whom transaction is performed. moreover, the sale price of this ashok vihar residential house becomes irrelevant because the assessed has invested the entire amount in purchase of another residential house at new rohtak road and this aspect was taken into account by the commissioner (appeals) while holding that no capital gain has accrued to the assessed. if we accept the version of the assessed that the ashok vihar property was sold at rs. 12,00,000 and purchased another residential house at rs. 10,50,000, and thereafter made a further investment of rs. 7,00,000 in renovation and alterations, the assessed did not earn any capital gain. likewise, if we accept the version of the revenue, who has estimated the sale price of ashok vihar property at rs. 31,74,349, which was invested in purchasing another residential house at new rohtak road for rs. 83,40,097, meaning thereby whatever sale proceeds were received by the assessed in selling of her residential house at ashok vihar, all was invested in purchasing another house and no capital gain has accrued to the assessed. it means the estimation of fair market price of residential house at ashok vihar has become academic. we, however, examined the issue whether the assessing officer is competent to make a reference to determine the fair market price of the property in order to compute capital gain under section 45 of the income tax act. the power to make a reference to the valuation officer is enshrined in section 55a of the income tax act, according to which, with a view to ascertain the fair market value of the capital asset for the purpose of this chapter, i.e., the computation of income from capital gains, the assessing officer may refer the valuation of capital asset to a valuation officer if he is of the opinion that the value so claimed is less than its fair market value. the power of reference to dvo was also examined by the tribunal in the case of sanjay chawla v. ito (supra) and the tribunal after having relied upon various judgments held that the reference under section 55a can only be made to determine the fair market value of the property in order to compute the capital gain accrued on sale of capital asset. we, thereforee, do not have any other opinion that the assessing officer is competent to make a reference to the valuation officer under section 55a to determine the fair market value of the property in order to compute capital gain.12. now, the next question comes whether the assessing officer has properly exercised his discretion under the given facts and circumstances of the case. in the instant case, the assessed has declared the sale value of her residential house at ashok vihar at rs. 12,00,000 and furnished the copy of the two sale deeds showing the said sale considerations. the assessing officer has simply doubted the sale considerations, but he has not mentioned anything in his order as to on what basis he has formed an,opinion that the assessed has understated the sale considerations. from a careful perusal of the assessment order, we do not find any inkling that the assessing officer at any point of time has collected some information that this sale consideration was understated by the assessed. without bringing anything on record, he has simply referred the property to the dvo for determination of its fair market value on the date of sale. while estimating the fair market value of this property, the valuation officer has not brought out any cogent material on record on the basis of which he has estimated the fair market value at rs. 31,74,349. he has simply taken the rates of land following the rates of land situated at tri nagar, which is a commercial area, whereas ashok vihar is a purely residential area and this fact cannot be ignored that the rates of commercial area are always higher than that of residential area. he has taken an instance of dda auction rate as on 11-12-1995, in tri nagar area of a plot of 180 sq. mts. at the rate of rs. 13,172 per sq. mt., and adopted the rate of land of the impugned property at rs. 16,070 per sq. mt., and worked out the cost of land at rs. 26,88,190. the assessed has filed the valuation report of her registered valuer in which the registered valuer has valued the property at rs, 11,74,095, after estimating the cost of land at rs. 8,28,669 at the rate of rs. 5,830 per sq. mt. in support of the rates adopted by the registered valuer, the learned counsel for the assessed has invited our attention to the land rates notified in the capital on 21-4-1999, published in 'the times of india' in which land rate as on 31-3-2000, was declared at rs. 5,830 of the ashok vihar area. the assessed has also quoted the other sale instances of the same area in which the property was sold at the land rate of rs. 3,920 per sq. yd. a copy of the sale deed is placed at pp. 135 to 142 of the compilation of the assessed. the other instance of the property was also quoted in which a plot measuring 300 sq. yds. was sold for rs. 9,70,000. if these instances were taken into account, the valuation officer could not have valued the property at the higher figure, because besides this documentary evidence, we have also examined the legal position whether the sale consideration declared by the assessed can be discarded by the revenue without bringing anything on record. for this issue, we may refer to the order of the tribunal in the case of sanjay chawla v. ito (supra) in which the tribunal has examined various judgments including the landmark judgment of the apex, court in the case of k.p. varghese v. ito (supra) on this issue and arrived at a conclusion that without bringing anything on record that some money over and above have passed over to the seller, the assessing officer cannot estimate his own fair market value. the tribunal has gone to the extent by saying that even if the market value of the property appears to be higher than the consideration declared by the assessed in the sale document, this cannot by itself be a sole ground for treating the difference between the declared consideration and market value as unexplained investment/receipt. the revenue is saddled with the onus to establish that higher consideration has been paid over and above the consideration indicated in the sale documents. in support of this contention, we may refer to the judgment of the jurisdictional high court in the case of cit v. ms. sushila mittal & ors. : [2001]250itr531(delhi) and cit v. shri gulshan kumar ( supra). in the instant, case, the revenue has not brought anything on record to form an opinion that some higher amount than the consideration declared by the assessed in the sale documents was passed over to the assessed. the assessing officer has simply made reference to the valuation officer, who valued the fair market value of the property on the basis of certain instances of sales of plots in a different locality, which is a commercial area without taking into factual aspect that the residential house in ashok vihar situates in a purely residential area and the market value of a residential house is always lesser than the house situated in a commercial area. the assessed, on the other hand, has furnished the valuation report of the registered valuer, who has valued the property on the basis of the rates notified in the newspaper as on 31-3-2000, besides quoting certain sale instances of the same locality. in the light of these facts the fair market value estimated by the assessing officer on the basis of the valuer's report does not appear to us to be correct. we, thereforee, set aside the order of the lower authorities on this aspect and direct the assessing officer to adopt the value of the property declared by the assessed in the sale deeds.13. now, the next question comes as to whether the assessing officer has jurisdiction to make a reference under section 55a of the income tax act to determine the fair market value of the residential house in new rohtak road in order to estimate the unexplained investment made by the assessed in the purchase of the said property. if that be so, what would be the fair market value of the property. with regard to the scope of the jurisdiction of the assessing officer for making a reference to the valuation officer under section 55a, it has been made abundantly clear by the apex court through its judgment in the case of smt. amiya bala paul v. cit (supra) by holding that the assessing officer cannot refer to the valuation officer the question of cost, of 'construction of a house property built by the assessed. their lordships have further held,that section 55a of the income tax act, 1961, can have no application to such matters. the powers of the assessing officer under sections 131(1) and 133(6) are, distinct from and does not includethe power to refer a matter to the valuation officer under section 55a, the report of the valuation officer under sections 55a may be considered by the assessing officer as a piece of evidence if it is relevant. however, the power of enquiry granted to an assessing officer under sections 133(6) and 142(2) does not include the power to refer the matter to the valuation officer for an enquiry by the latter. their lordships of the apex court further clarified that if the power to refer a dispute to the valuation officer were already available in sections 131(1), 133(6) and 142(2) there was no need to specifically empower the assessing officer to do so in certain circumstances under section 55a. section 55a having expressly set out the circumstances under and the purpose for which a reference can be made to a valuation officer, there is no question of the assessing officer invoking the general powers of enquiry to make a reference in different circumstances for the purpose. such a reference cannot be supported by reference to section 131 of the income tax act read with order 26 r. 9 of the code of civil procedure, 1908, since the consequence of a reference to a valuation officer under section 55a of the income tax act and of a commission issued under section 75 read with order 26 r. 9 of the code are different. through this judgment the apex court made it abundantly clear that a reference to a valuation officer can only be made under section 55a in order to determine the fair market value of the property in order to work out a capital gain under chapter iv of the income tax act. the assessing officer has no jurisdiction to make a reference under section 55a or by invoking the provisions of sections 131(1), 133(6) and 142(2) of the income tax act for any purpose other than the computation of income from a capital gain. in the instant case, a reference for determining the fair market value of the residential house at new rohtak road was not made to compute the capital gain accrued to the assessed. the object of reference was to determine the unexplained investment made in purchase of residential house at new rohtak so that necessary addition if need be can be made under section 69 of the income tax act. in view of the aforesaid judgment of the apex court in the case of smt. amiya bala paul v. cit (supra), the reference made in the instant case is invalid as the assessing officer has no jurisdiction to make the same.14. now, the next question comes what would be the evidentiary value of the valuation made by the dvo in pursuance to an invalid reference. in this regard we would like to mention here that once the reference is not valid, the valuation officer did not assume the jurisdiction to make necessary enquiries in order to estimate the fair market value of the property. we, thereforee, have no hesitation in holding that the valuation adopted by the dvo has no evidentiary value in order to determine the unexplained investment made in the property.15. we, however, further examined the valuation report submitted by the valuation officer. on a careful perusal of the valuation officer's report and the registered valuer report, we find that the valuation officer has adopted the rates of land of patel nagar which is a purely commercial area and the registered valuer of the assessed has adopted the rate as notified by the government in the newspaper on 21-4-1999. the registered valuer has also quoted certain instances of sale of the new rohtak road properties. during the course of hearing, the learned departmental representative has raised a dispute about the location of this property with the submission that this property was not situated at new rohtak road, but it was in karol bagh area. in order to rebut this contention, the assessed has filed photocopies of house-tax demand, ration card and the bank pass books to prove that the property was in fact at new rohtak road and not in karol bagh, and the rate adopted by the registered valuer was proper.16. we have also carefully examined the orders of the assessing officer and we find that the assessing officer has not brought anything on record in order to establish that the assessed has paid some excess consideration than the consideration declared in the sale deed to the seller. it has also been brought to bur notice that the sale consideration declared in the sale deed was accepted in the hands of the seller, it means that the revenue has taken different stands in the case of different assessedof one transaction. if the revenue has adopted the sale consideration of this property at rs. 83,40,097 in the hands of the assessed, there would have been some additions in the hands of the seller under the head capital gain. the revenue is not permitted to blow hot and cold in the same breath. it is also brought to our notice by the learned counsel for the assessed that the basement of this property was sold on 21-8-1999, at rs. 4,50,000 and after six years the ground floor and the first floor were also sold on 12-7-2003, for rs. 27,00,000. as such, the total property was sold up to 2003, for rs. 31,50,000. it is also evident from the record that after purchasing the property at rs . 11,34,000 the assessed has made investment in renovation and alterations at rs. 14,26,500 and the total comes to rs. 25,60,500. it means the total cost of the property comes to rs. 25,60, 500 in the hands of the assessed in assessment year 1998-99, which was finally sold for a consideration of rs. 31,50,000 up to july, 2003. the sale value declared by the assessed was not disputed by the revenue. we have also carefully perused the orders of the lower authorities, but we do not find any evidence on record wherefrom one can draw an inference that the assessed has passed over some extra consideration over and above the declared sale consideration of the property. in these circumstances, we do not find any justification in reference made by the assessing officer to the valuation officer and estimation of higher sale consideration in the light of landmark judgment of the apex court in the case of k.p. varghese v. ito (supra). we, thereforee, set aside the order of the commissioner (appeals) and direct the assessing officer to adopt the valuation of both the properties, i.e., at ashok vihar and new rohtak road, as declared by the assessed. accordingly, the impugned additions are hereby deleted.17. in the result, the appeal of the assessed is allowed and that of the revenue is dismissed.

Judgment:
ORDER

S.K. Yadav, J.M.:

These cross-appeals are preferred on behalf of the assessed as well as the revenue assailing the order of the Commissioner (Appeals), who has re-estimated sale and purchase price of the properties and recomputed capital gains and the additions under section 69 of the Income Tax Act, 1961.

2. Before adverting to the main controversies raised in these appeals, we would like to narrate salient facts of the case. During the year in question the assessed has sold her residential house, C - 2/141, Ashok Vihar, Phase - II, on 15-10-1997, for a sum of Rs. 12,00,000. Doubting the sale consideration, the assessing officer referred the matter to the valuation officer under section 55A to ascertain the fair market value of the property on the date of sale. The valuation officer accordingly estimated the fair market value at Rs. 31,74,349. A copy of the valuation report was made available to the assessed and objections were called for, and in response thereto the assessed filed her objections to the reference of the valuation report, and placed reliance on the decision of the Apex Court in the case of K.P. Varghese v. 170 & Anr. : [1981]131ITR597(SC) but the assessing officer was not convinced with the Explanationns of the assessed and he estimated the sale consideration at Rs. 31,74,349 and worked out long-term capital gain at Rs. 5,68,019.

3. During the year, assessed also purchased a residential house No. 21-B/4, New Rohtak Road, for a declared price of Rs. 10,50,000, but the assessing officer was not satisfied with the declared cost of this house and he referred the matter to the DVO under section 55A of the Income Tax Act, Relying upon various decisions on a question of valid reference, the DVO estimated the fair market value of the property purchased at Rs. 83,40,097. Copy of the valuation report was delivered to the assessed and the assessed filed her objections, but the assessing officer was not satisfied with the objections and accepted the fair market value determined by the DVO at Rs. 83,40,097, and difference of Rs. 65,90,097 was added to the income of the assessed under section 69 of the Act.

4. The assessed preferred an appeal before the Commissioner (Appeals) with the submissions that her house at Ashok Vihar was constructed on 200 sq. yds. in 1972 with inferior quality material and was of single storey. This house was purchased by the assessed in 1994 for Rs. 7,10,000. It was further stated that the assessing officer has calculated the capital gain at Rs. 21,02,019 by estimating the sale consideration at Rs. 31,74,349 as estimated by the valuation officer and after deducting the cost of another residential house purchased by the assessed on 20-10-1997, at Rs. 18,34,000 he worked out the capital gain at Rs. 5,68,019 having completely ignored the fact that the assessing officer had made an addition of Rs. 65,90,097 under section 69 of the Income Tax Act after having adopted the purchase value of the property at New Rohtak Road at Rs. 83.40,097. She further contended that if the findings of the assessing officer are taken to its logical conclusion then the sale of the property would result in a negative figure under the head 'Capital gains'. The Commissioner (Appeals) reexamined the issue in the light of this argument on capital gain and held that since the investment in the new house is taken at Rs. 83,40,097, then deduction for-investment in new house be allowed for full sale consideration. He accordingly directed the assessing officer to recompute the capital gain by considering the investment in the new property at Rs. 83,40,097 instead of Rs. 18,34,000 and the same would be at nil.

5. With regard to purchase price of the property, the Commissioner (Appeals) confirmed the fair market value adopted by the assessing officer. He, however, directed the assessing officer to recalculate the income from undisclosed sources under section 69 of the Act, after giving a due credit of sale proceeds as per the fair market value of the Ashok Vihar property, which should be taken at Rs. 31,74,349. This order of the Commissioner (Appeals) was not accepted by both the parties and the assessed as well as the revenue have challenged the order of the Commissioner (Appeals) through these appeals before the Tribunal. In the assessed's appeal though the assessed has raised four grounds of appeal, but all relate to the fair market value adopted by the revenue authorities to determine the sale price and purchase price of the property in question. The revenue, however, has challenged the reduction in unexplained investment in the property, which was added under section 69 of the Income Tax Act.

6. We have heard the rival submissions and carefully perused the orders of the authorities below. The learned counsel for the assessed, Shri O.P. Sapra, has categorically argued that the assessed has sold her residential house, C-2/141, Ashok Vihar, for Rs. 12,00,000 on 15-10-1997, to Smt. Sunita Chadha and Smt. Reena Chadha by executing two separate sale deeds for Rs. 6,00,000 each. The payment was received through cheque. The purchase price of the above house was accepted in the hands of the buyer. If the assessing officer doubted the sale consideration and estimated it at Rs. 31,74,349 he should have reopened the assessment in the case of Smt. Sunita Chadha and Smt. Reena Chadha, and an addition under section 69 of the Act would be warranted in their cases, but the revenue did not do the same and straightaway accepted the purchase price declared by these buyers in their individual cases. The learned counsel for the assessed further invited our attention to the copy of Form 34-A filed before the assessing officer on the basis of which income-tax clearance was given by the assessing officer for sale of property for Rs. 12,00,000 to these buyers. While giving the permission, the assessing officer did not doubt the sale consideration of the property. Copies of the sale deeds also placed on record at page Nos. 69 to 82 of the compilation of the assessed. To counter the valuation report, the assessed also filed the valuation report of the registered valuer, who adopted the fair market value at Rs. 11,74,095, but the assessing officer without commenting on the valuer's report has adopted the value estimated by the DVO. The learned counsel for the assessed further contended that the valuation officer has adopted the value of the property without any basis while estimating the cost of land as has taken the instance of a property situated at Tri Nagar, New Delhi, which is a commercial area whereas the assessed's property is situated in a purely residential area. While estimating the fair market value, the valuation officer did not keep in mind the facts that the rates of land in commercial areas are always quite higher than the residential areas. The learned counsel for the assessed has also placed heavy reliance upon the judgment of the Apex Court in the case of K.P. Varghese v. Income Tax Officer & Anr. (supra) with the submission that the value declared by the assessed should be accepted by the revenue unless and until some contrary evidence is brought on record. Besides this judgment, he also placed reliance upon the following judgments of various High Courts and Tribunal

(i) CIT v. Godawari Corpn. Ltd. : [1993]200ITR567(SC) ;

(ii) CIT v. Gulshan Kumar (2002) 123 Taxman 1111 (Delhi);

(iii) CIT v. Smt. K C. Agnes : [2003]262ITR354(Ker)

(iv) Tribunal's order in the case of Smt. Preeti N. Aggarwala in ITA No. 3156 (Del) of 1996

(v) Tribunal's order in the case of Shri Naresh K Aggarwala in ITA No. 3364/Del/1996;

(vi) Tribunal's order in the case of Shri Naval Kishore Gupta in ITA No. 3089/Del/2003; and

(vii) Tribunal's order in the case of Shri Sanjay Chawla v. Income Tax Officer in ITA Nos. 1392/Del/1999 & 3647/Del/2002 (reported at (2004) 82 TTJ (Delhi) 4071.

7. With regard to the fair market value of the New Rohtak Road residential house purchased by the assessed, the learned counsel has raised a similar argument. In addition to that it was further contended that 21-B/4, New Rohtak Road, is an old house on irregular plot measuring 314 sq. yds. constructed in 1959, which was purchased on 20-10-1997, for Rs. 11,34,000 through three sale deeds and later on the assessed spent Rs. 14,26,500 on further construction/renovation. The registered valuer's report was also filed, according to which, the fair market value as on 1-1-1998, was shown at Rs. 19,15,000. The learned counsel for the assessed further contended that the valuation officer has estimated the fair market value by inspecting the property on 6-5-2000, at Rs. 83,40,091. It was further contended that the valuer's report was commented by the registered valuer pointing out that the land rate notified by the Union Urban Affairs Ministry on 21-4-1999, applicable to 31-3-2000 for new Rohtak Road was Rs. 6,930 per sq. mt., but the assessing officer has adopted the rate at Rs. 24,631 per sq. mt. on the basis of the auction on 19-9-1994, copy of which was never supplied to the assessed. According to the registered valuer the cost of land as on 21-1-1997, was Rs. 3,83,321 and the cost of construction was Rs. 12,06,817, aggregating at Rs. 15,89,191 out of which he had also allowed deductions of 1/3rd due to cancellation of the lease thereby estimating the value of the property at Rs. 10,59,461 only. In support of this contention the assessed has filed photocopy of paper cutting of 'The Times of India' in which rates of lands of different zones were notified.

8. In support of land rates the assessed has filed the copies of sale deeds of other properties situated at New Rohtak Road and Ashok Vihar, which were sold during 1997 and in these sale deeds the land rates were shown between Rs. 3,920 per sq. yd. and Rs. 4,761 per sq. yd. Copies of the sale deeds are placed on record, but the lower authorities did not take cognizance of these documentary evidence and without controverting it, they have adopted the rates estimated by the DVO. While estimating the rate of land, the DVO has not even looked into the factual aspect that this plot Was an irregular plot and there was a huge public dustbin located just behind the property spreading very bad smell for all the 24 hours throughout the year. Originally, it was leasehold property and the lease was granted in favor of Shri Roop Lal by Delhi Improvement Trust, which was later on cancelled because the previous owner was misusing the property and the lease stood cancelled and despite best efforts it had not been restored till date. The DVO took note of this fact, but did not consider it while estimating the fair market value of the property. It is also a fact that the previous owner could not get a customer for the purchase of the said property during the last 10 years and it was the assessed alone, who took the risk of purchasing the said property with such great drawback and disadvantage. The seller, Shri R.L. Chadha, was an aged and ailing person, who was very keen to sell the property and unfortunately after this sale he passed away within a period of 6 months. He further contended that in the hands of the seller the sale consideration at Rs. 10,50,000 was accepted by the revenue. As such, the revenue cannot take double stand for one transaction. If they have adopted the sale consideration at Rs. 83,40,097 in the hands of the assessed, the same should be adopted in the hands of the seller while determining the capital gain in his hands. He further contended that in view of the judgment of the Apex Court in the case of Smt. Amiya Bala Paul v. CIT : [2003]262ITR407(SC) and judgments of various other High Courts, the assessing officer is not competent to make a reference to the DVO under section 55A of the Income Tax Act. As such, the report submitted by the DVO cannot be relied on for estimating the fair market value of the property as the reference was made to the DVO by the assessing officer without having any jurisdiction to do the same.

9. The learned Departmental Representative, on the other hand, besides placing heavy reliance upon the orders of the lower authorities has emphatically argued that before making a reference to the DVO, the assessing officer has made local enquiries and after having been satisfied that the assessed has understated the sale price of the Ashok Vihar property and purchase price of the New Rohtak Road property, he made a reference under section 55A of the Act to DVO to determine the fair market value of these properties. While estimating this fair market value the DVO has called the comments from the assessed and after taking into account the instances of recent sale the DVO estimated the fair market value. The learned Departmental Representative, Mr. Salil Gupta, has placed reliance on the map with the submission that the assessed's residential house at New Rohtak Road was in fact situated in Karol Bagh and its rate should at least be adopted at Rs. 24, 150 per sq. yd., in view of the land rates notified in 'The Times of India' newspaper on 21-4-1999. Since the assessed has understated the sale considerations of the property, the assessing officer was justified in making a reference and adopting the fair market value estimated by the DVO.

10. The learned counsel for the assessed in rebuttal has invited our attention to the telephone bills, house-tax bill and the ration card in support of his contention that the property was situated at New Rohtak Road only and not in Karol Bagh. He has also filed written submissions besides relying upon the various judicial pronouncements. The learned counsel for the assessed further invited our attention to the fact that this New Rohtak Road property was finally sold by the assessed in piecemeal. The basement was sold on 21-8-1999, at Rs. 4,50,000 and ground floor and first floor was sold on 12-7-2003, at Rs. 27,00,000. As such, the total property was sold for Rs. 31,50,000. On this property the assessed has made investments in renovation and alterations at Rs. 14,26,500. As such, the total cost of this property comes to Rs. 25,60,500, which was later on finally sold up to 12-7-2003, for a sum of Rs. 30,50,000. The sale price of this property was not disputed by the revenue till date. The learned counsel for the assessed has also made the comments on various judgments referred to by the Departmental Representative with the submission that the judgments are not applicable in the assessed's case as the revenue has not brought any material on record to prove that something over and above to the cost declared by the assessed has ever passed to the assessed. He also placed heavy reliance upon the recent order of the Tribunal in the case of Shri Sanjay Chawla v. ITO in ITA No. 1392 (Del) of 1999 in which the Tribunal has examined the judgment of the Apex Court in the case of Shri K.P. Verghese v. Income Tax Officer & Ors. (supra) and other judgments of various High Courts on an issue whether the revenue can discard the sale/purchase consideration shown in the sale deed without bringing anything contrary on record to establish that some amount over and above to the declared sale consideration was passed over to the assessed.

11. We have heard both the parties at length and carefully examined the orders of the lower authorities, and the documents placed on record. It is evident from the record that in the impugned assessment year the assessed had declared the sale price of her residential house at Rs. 12,00,000 in her return of income and worked out the capital gain, but this sale price of this residential house was not accepted by the revenue despite a fact that the assessed has filed the copy of sale deeds executed in favor of Smt. Sunita Chadha and Smt. Reena Chadha and while estimating the sale price of this property at Rs. 31,74,349 following the DVO's report, no effort was made to examine the cost of investment shown by Smt. Sunita Chadha and Smt. Reena Chadha in their return of income. During the course of hearing, the learned counsel for the assessed has emphatically argued that the purchase price of the above house at Rs. 12,00,000 stands accepted by the revenue in the hands of Smt. Sunita Chadha and Smt. Reena Chadha. This contention of the assessed was not rebutted by the learned Departmental Representative. It means once the purchase price of this property was accepted in the hands of the purchasers at Rs. 12,00,000 how the same property can be valued at Rs. 31,74,349 in the hands of the seller without bringing any cogent material on record to establish that some amount over and above to Rs, 12,00,000 was given to the seller by the buyers, Smt. Sunita Chadha and Smt. Reena Chadha. The revenue cannot blow hot and cold in the same breath. It has to take one stand that too in the hands of the seller of as well as the buyer. The property cannot be valued at different rates in the hands of two parties between whom transaction is performed. Moreover, the sale price of this Ashok Vihar residential house becomes irrelevant because the assessed has invested the entire amount in purchase of another residential house at New Rohtak Road and this aspect was taken into account by the Commissioner (Appeals) while holding that no capital gain has accrued to the assessed. If we accept the version of the assessed that the Ashok Vihar property was sold at Rs. 12,00,000 and purchased another residential house at Rs. 10,50,000, and thereafter made a further investment of Rs. 7,00,000 in renovation and alterations, the assessed did not earn any capital gain. Likewise, if we accept the version of the revenue, who has estimated the sale price of Ashok Vihar property at Rs. 31,74,349, which was invested in purchasing another residential house at New Rohtak Road for Rs. 83,40,097, meaning thereby whatever sale proceeds were received by the assessed in selling of her residential house at Ashok Vihar, all was invested in purchasing another house and no capital gain has accrued to the assessed. It means the estimation of fair market price of residential house at Ashok Vihar has become academic. We, however, examined the issue whether the assessing officer is competent to make a reference to determine the fair market price of the property in order to compute capital gain under section 45 of the Income Tax Act. The power to make a reference to the valuation officer is enshrined in section 55A of the Income Tax Act, according to which, with a view to ascertain the fair market value of the capital asset for the purpose of this chapter, i.e., the computation of income from capital gains, the assessing officer may refer the valuation of capital asset to a valuation officer if he is of the opinion that the value so claimed is less than its fair market value. The power of reference to DVO was also examined by the Tribunal in the case of Sanjay Chawla v. ITO (supra) and the Tribunal after having relied upon various judgments held that the reference under section 55A can only be made to determine the fair market value of the property in order to compute the capital gain accrued on sale of capital asset. We, thereforee, do not have any other opinion that the assessing officer is competent to make a reference to the valuation officer under section 55A to determine the fair market value of the property in order to compute capital gain.

12. Now, the next question comes whether the assessing officer has properly exercised his discretion under the given facts and circumstances of the case. In the instant case, the assessed has declared the sale value of her residential house at Ashok Vihar at Rs. 12,00,000 and furnished the copy of the two sale deeds showing the said sale considerations. The assessing officer has simply doubted the sale considerations, but he has not mentioned anything in his order as to on what basis he has formed an,opinion that the assessed has understated the sale considerations. From a careful perusal of the assessment order, we do not find any inkling that the assessing officer at any point of time has collected some information that this sale consideration was understated by the assessed. Without bringing anything on record, he has simply referred the property to the DVO for determination of its fair market value on the date of sale. While estimating the fair market value of this property, the valuation officer has not brought out any cogent material on record on the basis of which he has estimated the fair market value at Rs. 31,74,349. He has simply taken the rates of land following the rates of land situated at Tri Nagar, which is a commercial area, whereas Ashok Vihar is a purely residential area and this fact cannot be ignored that the rates of commercial area are always higher than that of residential area. He has taken an instance of DDA auction rate as on 11-12-1995, in Tri Nagar area of a plot of 180 sq. mts. at the rate of Rs. 13,172 per sq. mt., and adopted the rate of land of the impugned property at Rs. 16,070 per sq. mt., and worked out the cost of land at Rs. 26,88,190. The assessed has filed the valuation report of her registered valuer in which the registered valuer has valued the property at Rs, 11,74,095, after estimating the cost of land at Rs. 8,28,669 at the rate of Rs. 5,830 per sq. mt. In support of the rates adopted by the registered valuer, the learned counsel for the assessed has invited our attention to the land rates notified in the capital on 21-4-1999, published in 'The Times of India' in which land rate as on 31-3-2000, was declared at Rs. 5,830 of the Ashok Vihar area. The assessed has also quoted the other sale instances of the same area in which the property was sold at the land rate of Rs. 3,920 per sq. yd. A copy of the sale deed is placed at pp. 135 to 142 of the compilation of the assessed. The other instance of the property was also quoted in which a plot measuring 300 sq. yds. was sold for Rs. 9,70,000. If these instances were taken into account, the valuation officer could not have valued the property at the higher figure, because besides this documentary evidence, we have also examined the legal position whether the sale consideration declared by the assessed can be discarded by the revenue without bringing anything on record. For this issue, we may refer to the order of the Tribunal in the case of Sanjay Chawla v. ITO (supra) in which the Tribunal has examined various judgments including the landmark judgment of the Apex, Court in the case of K.P. Varghese v. ITO (supra) on this issue and arrived at a conclusion that without bringing anything on record that some money over and above have passed over to the seller, the assessing officer cannot estimate his own fair market value. The Tribunal has gone to the extent by saying that even if the market value of the property appears to be higher than the consideration declared by the assessed in the sale document, this cannot by itself be a sole ground for treating the difference between the declared consideration and market value as unexplained investment/receipt. The revenue is saddled with the onus to establish that higher consideration has been paid over and above the consideration indicated in the sale documents. In support of this contention, we may refer to the judgment of the jurisdictional High Court in the case of CIT v. Ms. Sushila Mittal & Ors. : [2001]250ITR531(Delhi) and CIT v. Shri Gulshan Kumar ( supra). In the instant, case, the revenue has not brought anything on record to form an opinion that some higher amount than the consideration declared by the assessed in the sale documents was passed over to the assessed. The assessing officer has simply made reference to the valuation officer, who valued the fair market value of the property on the basis of certain instances of sales of plots in a different locality, which is a commercial area without taking into factual aspect that the residential house in Ashok Vihar situates in a purely residential area and the market value of a residential house is always lesser than the house situated in a commercial area. The assessed, on the other hand, has furnished the valuation report of the registered valuer, who has valued the property on the basis of the rates notified in the newspaper as on 31-3-2000, besides quoting certain sale instances of the same locality. In the light of these facts the fair market value estimated by the assessing officer on the basis of the valuer's report does not appear to us to be correct. We, thereforee, set aside the order of the lower authorities on this aspect and direct the assessing officer to adopt the value of the property declared by the assessed in the sale deeds.

13. Now, the next question comes as to whether the assessing officer has jurisdiction to make a reference under section 55A of the Income Tax Act to determine the fair market value of the residential house in New Rohtak Road in order to estimate the unexplained investment made by the assessed in the purchase of the said property. If that be so, what would be the fair market value of the property. With regard to the scope of the jurisdiction of the assessing officer for making a reference to the valuation officer under section 55A, it has been made abundantly clear by the Apex Court through its judgment in the case of Smt. Amiya Bala Paul v. CIT (supra) by holding that the assessing officer cannot refer to the valuation officer the question of cost, of 'construction of a house property built by the assessed. Their Lordships have further held,that section 55A of the Income Tax Act, 1961, can have no application to such matters. The powers of the assessing officer under sections 131(1) and 133(6) are, distinct from and does not includethe power to refer a matter to the valuation officer under section 55A, The report of the valuation officer under sections 55A may be considered by the assessing officer as a piece of evidence if it is relevant. However, the power of enquiry granted to an assessing officer under sections 133(6) and 142(2) does not include the power to refer the matter to the valuation officer for an enquiry by the latter. Their Lordships of the Apex Court further clarified that if the power to refer a dispute to the valuation officer were already available in sections 131(1), 133(6) and 142(2) there was no need to specifically empower the assessing officer to do so in certain circumstances under section 55A. Section 55A having expressly set out the circumstances under and the purpose for which a reference can be made to a valuation officer, there is no question of the assessing officer invoking the general powers of enquiry to make a reference in different circumstances for the purpose. Such a reference cannot be supported by reference to section 131 of the Income Tax Act read with order 26 r. 9 of the Code of Civil Procedure, 1908, since the consequence of a reference to a valuation officer under section 55A of the Income Tax Act and of a commission issued under section 75 read with order 26 r. 9 of the Code are different. Through this judgment the Apex Court made it abundantly clear that a reference to a valuation officer can only be made under section 55A in order to determine the fair market value of the property in order to work out a capital gain under Chapter IV of the Income Tax Act. The assessing officer has no jurisdiction to make a reference under section 55A or by invoking the provisions of sections 131(1), 133(6) and 142(2) of the Income Tax Act for any purpose other than the computation of income from a capital gain. In the instant case, a reference for determining the fair market value of the residential house at New Rohtak Road was not made to compute the capital gain accrued to the assessed. The object of reference was to determine the unexplained investment made in purchase of residential house at New Rohtak so that necessary addition if need be can be made under section 69 of the Income Tax Act. In view of the aforesaid judgment of the Apex Court in the case of Smt. Amiya Bala Paul v. CIT (supra), the reference made in the instant case is invalid as the assessing officer has no jurisdiction to make the same.

14. Now, the next question comes what would be the evidentiary value of the valuation made by the DVO in pursuance to an invalid reference. In this regard we would like to mention here that once the reference is not valid, the valuation officer did not assume the jurisdiction to make necessary enquiries in order to estimate the fair market value of the property. We, thereforee, have no hesitation in holding that the valuation adopted by the DVO has no evidentiary value in order to determine the unexplained investment made in the property.

15. We, however, further examined the valuation report submitted by the valuation officer. On a careful perusal of the valuation officer's report and the registered valuer report, we find that the valuation officer has adopted the rates of land of Patel Nagar which is a purely commercial area and the registered valuer of the assessed has adopted the rate as notified by the Government in the newspaper on 21-4-1999. The registered valuer has also quoted certain instances of sale of the New Rohtak Road properties. During the course of hearing, the learned Departmental Representative has raised a dispute about the location of this property with the submission that this property was not situated at New Rohtak Road, but it was in Karol Bagh area. In order to rebut this contention, the assessed has filed photocopies of house-tax demand, ration card and the bank pass books to prove that the property was in fact at New Rohtak Road and not in Karol Bagh, and the rate adopted by the registered valuer was proper.

16. We have also carefully examined the orders of the assessing officer and we find that the assessing officer has not brought anything on record in order to establish that the assessed has paid some excess consideration than the consideration declared in the sale deed to the seller. It has also been brought to bur notice that the sale consideration declared in the sale deed was accepted in the hands of the seller, It means that the revenue has taken different stands in the case of different assessedof one transaction. If the revenue has adopted the sale consideration of this property at Rs. 83,40,097 in the hands of the assessed, there would have been some additions in the hands of the seller under the head capital gain. The revenue is not permitted to blow hot and cold in the same breath. It is also brought to our notice by the learned counsel for the assessed that the basement of this property was sold on 21-8-1999, at Rs. 4,50,000 and after six years the ground floor and the first floor were also sold on 12-7-2003, for Rs. 27,00,000. As such, the total property was sold up to 2003, for Rs. 31,50,000. It is also evident from the record that after purchasing the property at Rs . 11,34,000 the assessed has made investment in renovation and alterations at Rs. 14,26,500 and the total comes to Rs. 25,60,500. It means the total cost of the property comes to Rs. 25,60, 500 in the hands of the assessed in assessment year 1998-99, which was finally sold for a consideration of Rs. 31,50,000 up to July, 2003. The sale value declared by the assessed was not disputed by the revenue. We have also carefully perused the orders of the lower authorities, but we do not find any evidence on record wherefrom one can draw an inference that the assessed has passed over some extra consideration over and above the declared sale consideration of the property. In these circumstances, we do not find any justification in reference made by the assessing officer to the valuation officer and estimation of higher sale consideration in the light of landmark judgment of the Apex Court in the case of K.P. Varghese v. ITO (supra). We, thereforee, set aside the order of the Commissioner (Appeals) and direct the assessing officer to adopt the valuation of both the properties, i.e., at Ashok Vihar and New Rohtak Road, as declared by the assessed. Accordingly, the impugned additions are hereby deleted.

17. In the result, the appeal of the assessed is allowed and that of the revenue is dismissed.