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2021 (6) TMI 653 - AT - Income TaxAddition of sales of flats - suppression of sale price of the flats in order to evade the tax - HELD THAT:- Except drawing inferences on the basis of the documents, AO did not refer to the prevailing market prices in the vicinity so as to conclude that there is an attempt to reduce the sale consideration for the sole purpose of evading the tax. No material was produced before the CIT(A) to reach a conclusion as to the actual cost of the plot in competition with the prevailing market value. In respect of this flat also, AO requires to make enquiry as to the prevailing market value of the plot vis-à-vis the figures mentioned in the documents. Now coming to the omnibus additions made by the learned AO for all the 3 years, basing on these documents relating to 2 flats, AO while stating that there was understatement of the cost of the flats by 36% and 26.5% respectively the average of which comes to 24.5%, extrapolated the same in respect of all the sales of plots that took place between the assessment year 2009-10 and 2011-12. It remains an admitted fact that insofar as the other flats are concerned no material whatsoever, much less incriminating material is forthcoming. It is only the imagination of the AO that merely because there appears to be understatement in respect of one or 2 flats the same must have occurred in respect of all. Absolutely there is no material to support such an extrapolation of the inferences drawn by the learned Assessing Officer basing on the documents relating to two flats, to all the sales that took place for long three years. The maxim Falsus in uno and falsus in omnibus has an obligation in India and it has not received any acceptance or approval by the higher courts. It is therefore clear that the action of the AO in calculating the so-called understatement of the cost of the flats for all the 3 years and making addition is accordingly cannot be justified. Additions made by the AO in respect of all the sales that took place in all the 3 years cannot be sustained. While setting aside the impugned orders, we restore the issue for verification of the actual cost of the flats Nos. A-601 and A-802 with reference to the prevailing market value vis-à-vis the figures mentioned in the seized documents. Assessee is free to put forth their contentions on these documents before the learned AO and the learned AO will take a fresh view in respect of those two flats alone. - Appeals of the Revenue are allowed for statistical purpose.
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