The ITAT Amritsar ruled that a Directorate of Valuation (DVO) report alone cannot justify a tax addition under Section 69 without evidence of extra payment. This emphasizes the need for supporting documentation in valuation assessments.
ITAT Amritsar: DVO Valuation Requires Proof of Extra Payment
The ITAT Amritsar has clarified that a valuation report provided by the Directorate of Valuation (DVO) cannot be the sole basis for justifying an addition to taxable income under Section 69 unless there is accompanying evidence of extra payment made beyond the registered sale deed value. This ruling challenges the reliance on valuation alone for tax purposes.
The tribunal's decision emphasizes the necessity for comprehensive proof when asserting claims of underreporting or additional income. In this case, the absence of documented evidence of 'on-money' was crucial to the tribunal's determination and led to the deletion of the addition.
This decision is important for tax practitioners, especially those involved in property transactions, as it sets a precedent for ensuring that clients maintain the necessary documentation to substantiate their financial claims and protect against unwarranted tax assessments.
Citations
- ITAT Amritsar (2026) ITA No. 107/2021
