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2016 (10) TMI 1259 - ITAT DELHIAddition u/s 69 - unexplained investment - reference of matter to the District Valuation Officer (DVO) for estimation of investment made in land at fair market value - investment made by the assessee in purchase of 11 plots in the course of its business - HELD THAT:- A careful perusal of the provision divulges that in order to invoke this provision, it is sine qua non that the assessee must have made investments which are not recorded in the books of account. The factum of the assessee having made investment should be first proved by the AO, only then the burden shifts on the assessee to prove the source of investment. Such investment outside the books of account must be positively proved by the AO and not only inferred from the attending facts. If such an investment outside the books is not proved, the assessee cannot be called upon to prove the source of such a hypothetical investment. Apart from relying on the DVO’s report, the AO has not brought on record any other material to indicate that the assessee did make investment in purchase of plots over and above that declared in the books of account. The legislature is also not oblivious of the practice of understatement of consideration in the transactions of immovable properties in certain cases. That is why, apart from inserting section 50C, which is applicable in the hands of a seller, section 56(2)(vii) was introduced w.e.f. 1.10.2009 for charging to tax the difference between stamp value and the declared consideration in the hands of the buyer, if such difference is more than ₹ 50,000/-. As this is a substantive provision inserted w.e.f. 1.10.2009, the same cannot be applied to the assessment year 2006-07 under consideration. Ex consequenti, the entire addition made by the AO is deleted. The ground taken by the assessee is allowed and that by the Revenue is dismissed. Addition on account of stamp duty and registration charges - AO applied 8% rate on the alleged excess investment made by the assessee, the CIT(A) proportionately reduced the same. In view of the fact that the substantive addition u/s 69 on account of the alleged investment made by the assessee has been deleted in an earlier para, this consequential addition is also liable to be deleted. - Decided against revenue.
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