TMI Blog2014 (7) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been compounded by adopting a completely different methodology without any positive finding as to the cost of acquisition. The addition made is purely based on estimate and conjecture and there is no substance in the estimate made by the AO, who in any case is not authorized to make any estimate under the provisions of section 142(2A) of the Income-tax Act - section 69/69B are deeming provisions and it is trite law that deeming provisions are to be strictly interpreted - AS there is no invoke section 69/69B therefore for this reason too the addition made is not sustainable in law – the AO is directed to delete the addition made for ₹ 74 lacs on account of unaccounted investment made by the assessee out of undisclosed sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 12,62,699/- . The difference was on account of interest income from bank which was declared at ₹ 14,846/-; subsequently it was disclosed as ₹ 29,035/-. 4. The Assessing Officer was of the opinion that property bearing No. 201 to 210, 15, Community Centre, Karkardooma, Delhi-92 shown to have been purchased for a consideration of ₹ 51 lakhs was not correctly valued. This was because it was let out to one M/s CRR Capital Services Ltd. for a monthly rent of ₹ 3,10,114/-. The assessee was asked to explain why the purchase price of the property be not determined on the basis of return on investment method and the difference be not treated as unexplained investment. Her response was that the property was acquired for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete the valuation exercise. The learned counsel also highlighted the fact that CIT (A) had accepted the assessee s contention even without calling for a remand report. 6. The learned counsel for the respondent submitted that whilst the AO could possibly have entertained a suspicion, that by itself could not have led to adoption of the return on capital method without a finding based upon materials that the cost of acquisition of the property was undervalued. The learned counsel in this regard relied upon the judgment of this Court in Commissioner of Income Tax vs. Agile Properties (P.) Ltd.: (2014) 45 taxmann.com 512 (Delhi). She also relied upon CIT vs. Dinesh Jain HUF: (2013) 352 ITR 629. 7. From the above discussion, it is app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounded the error in the present case. 8. In Dinesh Jain (supra) this Court observed inter alia as follows:- 11. Section 69B does not permit an inference to be drawn from the circumstances surrounding the transaction that the purchaser of the property must have paid more than what was actually recorded in his books of account for the simple reason that such an inference could be very subjective and could involve the dangerous consequence of a notional or fictional income being brought to tax contrary to the strict provisions of Article 265 of the Constitution of India and Entry 82 in List I of the seventh schedule thereto which deals with Taxes on income other than agricultural income . This was one of the major considerations that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature. 12. While the omitted section 52(2) applied to the transferor of the property, section 69B applies to the transferee the purchaser of the property. It refers to the money expended by the assessee, but not recorded in his books of account, which is a clear reference to undisclosed income being used in the investment. Applying the logic and reasoning in K.P. Varghese (supra) it seems to us that even for the purposes of Section 69B it is the burden of the Assessing Officer to first prove that there was understatement of the consideration (investment) in the books of account. Once that undervaluation is established as a matter of fact, the Assessing Officer, in the absence of any satisfactory explanation from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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