TMI Blog2012 (3) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... d by sale deed/ other agreements etc - Held that: Assessing Officer failed to conduct a detailed enquiry and verification, which may have justified their stand regarding understatement or non-declaration of the actual sale consideration - Once it is shown that consideration has been understated, it may be open to the Assessing Officer to quantify the same by reference to the market value arrived at by the rent capitalization method in the absence of any material to show the precise extent of understatement - Revenue appeal dismissed - ITA 145/2012 - - - Dated:- 6-3-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. Abhishek Maratha, sr. standing counsel with Ms. Anshul Sharma, Adv. SANJIV KHANNA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as there was no material to show that there was understatement and thus rent capitalization method cannot be the basis to hold and compute the alleged understatement of the sale consideration. 4. The aforesaid findings recorded by the CIT(Appeals) have been affirmed by the Tribunal, who have stated as under : 12. We have hard (sic.) both the parties and gone through the material available on record. The Assessing Officer had estimated the value of the property based on rent capitalization method which is applicable to wealth tax proceedings. During the course of search no mater[al (sic.) was found to suggest that properties were sold at higher price than the price mentioned in sale deeds. The Assessing Officer had proceeded to value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be assumed, measured and computed by applying rent capitalization method. In a given case, the said contention/ method may go against the Revenue and lead to evasion of tax. 6. In the present case, the assessee has sold properties. The statement of the parties to whom the properties were sold have been recorded. All of them have confirmed the sale consideration mentioned in the sale document/agreement. In the search no incriminating material or evidence to show and establish understatement of sale consideration was found. The observations of the Assessing Officer for adopting the rent capitalization method, in the assessment order read: - Suppression of Sale Consideration During the course of assessment proceedings, it was noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siderations are supported by sale deed/ other agreements etc. The assessee can not be allowed to take advantage of this situation because the transactions are prima facie absurd and most definitely qualify to be mutually-beneficial-collusive transactions . In these circumstances and considering the absurdities, claimed by the assessee in its books of account, I do not find that the books of accounts in any manner, indicate real state of affairs. Sale consideration on the rented properties is estimated at the max to give 15% return to the buyer. 7. The aforesaid observations indicate that the Assessing Officer failed to conduct a detailed enquiry and verification, which may have justified their stand regarding understatement or non-dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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