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Assistant CIT, Central Circle-5, New Delhi Versus Gee Ispat Pvt. Ltd.

Addition on undisclosed GP rate - suppressed sales assumed on the basis of a diary seized from third party - CIT(A) restricted part addition - whether the documents seized during the course of search and the statements recorded during search and post-search was sufficient to draw an inference about undisclosed sales? - Held that:- The entire sales as made by the assessee during the year aggregate to ₹ 699.73 crores and sale of manufactured goods is of ₹ 257.51 crores and the quantity .....

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seized diary during the course of search and the statements of Shri Salek Chand Garg recorded during the course of search and post-search was not sufficient to draw an inference about the alleged undisclosed sales dehors corroborative evidence supporting the third party statements and the entries recorded in the diary found from the possession of the third party during the course of search. - Decided in favour of the assessee.

Whether a profit can be estimated without rejecting books .....

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ee to meet out the defects pointed out by the Assessing Officer in the books of account and if the Assessing Officer is not satisfied with the explanation of the assessee to those defects pointed out by the Assessing Officer, then the Assessing Officer will reject the books of account by invoking the provisions of sec. 145(3) of the Act and will estimate the profit.In the present case, in view of the above finding on sub-issue No.(i), the Assessing Officer was having no reason to reject the book .....

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ls) assigned any convincing reason for applying the g.p. rate at 5% of the turnover. The g.p. rate declared by the assessee in respect of manufacturing was 1.24%. Also keeping in mind the above findings on other sub-issues, the issue is decided in favour of the assessee.

Unexplained investment in stock - CIT(A) sustained the addition to the extent of ₹ 6,62,35,000 - Held that:- The Learned CIT(Appeals) thereafter has held that variation in quantity of raw material of six items w .....

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the Revenue. In such a situation, it is now a well settled position of the law that in absence of decision of Hon'ble jurisdictional High Court on the issue, the decision favoring the assessee will have to be followed. The finding of the Learned CIT(Appeals) on the issue following the decision in favour of the assessee thus cannot be held erroneous. The same is upheld. - Decided against revenue.

As regards CIT(A) sustained the addition to the extent of ₹ 6,62,35,000 the closing .....

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7; 6,62,35,000 sustained by the Learned CIT(Appeals) is thus not tenable. The same is directed to be deleted - Decided in favour of assesse.

Undisclosed investment - assessee company had paid balance amount to the seller in cash outside the books of account by utilizing unaccounted income - held that:- provisions laid down under sec. 50C of the Act are not applicable in the case of buyer and the valuation report in absence of corroborative evidence in support cannot be the sole basis .....

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eement, sale deed, remittance of the accounts from the ledger as well as bank account were sufficient evidence to accept sale consideration shown in those documents. The Assessing Officer was thus not justified in making addition solely on the basis of valuation report and the Learned CIT(Appeals) was also not justified in sustaining the part addition partly on the basis of the valuation and applying the provisions of sec. 50C of the Act in the case of buyer. The addition made and sustained by t .....

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t issues. 2. The Revenue has questioned First Appellate Order on the following grounds: 1. The Learned CIT(Appeals) is not correct in law and facts: 2. On the facts and in the circumstances, Learned CIT(Appeals) has erred in restricting the addition of ₹ 8,37,60,000 ( 5% of 83076 crore) made by the Assessing Officer on account of undisclosed GP rate. 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in restricting the addition of ₹ 11,69,98,750 .....

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f ₹ 4,18,80,000 out of an aggregate addition of ₹ 8,37,60,000 by applying the rate of 5% on alleged suppressed sales assumed on the basis of a diary seized from third party. 1.1 That the Learned CIT(Appeals)-XXXI, New Delhi has failed to appreciate that diary marked as Annexure A-I found adnd seized from residential premises of Shri Salek Chand Garg and the statement recorded Shri Salek Chand Garg neither in law and nor on fact could be made a basis to assume that appellant had made .....

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eized diary from Shri Salek Chand Garg pertains to his own transactions and not to the appellant company and therefore, addition sustained is wholly unsustainable. 1.4 The finding of the Learned CIT(Appeals) that the subsequent statement of Shri Salek Chand Garg recorded in response to summons u/s. 1341 of the Act creates doubts in the mind that why Shri Salek Chand Garg has denied when he himself admitted earlier itself establishes the addition has been sustained on surmises, suspicion and conj .....

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g an addition of ₹ 6,62,35,000 out of an aggregate addition of ₹ 17,69,98,750 representing alleged unexplained investment-in-stock. 2.1 That the Learned CIT(Appeals) while upholding the addition has failed to appreciate that once the physical stock duly tallied with the stock recorded in the books of account no addition could be made on account of alleged unexplained investmentin- stock, more particularly when the same was supported by order of assessment from Excise Department and V .....

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law and on facts in processing to sustain the addition on account of alleged unexplained investment-in-stock on the basis of diary found from thirty party. 2.4 That ever otherwise the computation of alleged peak is based on surmises, conjecture and hence unsustainable. 3. That the Learned CIT(Appeals) has erred both in law and on facts in upholding the addition of ₹ 61,26,760 out of addition of ₹ 2,04,91,450 representing unexplained investment in property by relying on the circle rat .....

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the appellant company. 4. Ground No.1 of the appeal preferred by the Revenue is general in nature, hence, does not need independent adjudication. 5. Ground No.2 (Revenue ) & Ground Nos. 1, 1.1 to 1.5(Assessee): The issue involved in the grounds is as to whether the Learned CIT(Appeals) was justified in restricting the addition of ₹ 4,18,80,000 out of the addition of ₹ 8,37,60,000 made by the Assessing Officer by applying g.p. rate of 5% on the alleged suppressed sales assumed on .....

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₹ 4,18,80,000. Thus, the parties are in cross appeals. 7. The Learned AR submitted that the aforesaid addition has been made by applying a rate of profit of 10% on alleged undisclosed sales of ₹ 83.76 crores which has been arrived in the manner hereunder: Sr. No. Alleged undisclosed sales (Rs. is crores) Pages of the order of assessment i) 44.94 6.12 ii) 38.82 14-16 Total 83.76 7.1 The Learned AR submitted that the Revenue has not disputed that the aforesaid figures of ₹ 44.94 .....

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nufactured and sold by the assessee company are excisable goods and no defect has even been allowed by excise authorities. The copies of the excise return have been placed at pages 279 to 313 of Paper Book; d) That even the VAT authorities have accepted the turnover declared by the assessee company. The return filed with the VAT authorities are placed at pages 314 to 329 of Paper Book; e) That no evidence either in the shape of unexplained cash or unexplained investment or material has been foun .....

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k which have been accepted as such; h) That the sales have been made to the identifiable and verifiable parties and no evidence has been gathered post search to allege unaccounted sales; i) That not a single party has been examined or even attempted to be examined before drawing adverse inference of such a magnitude fastening a heavy demand on the assessee company; j) That books of accounts as maintained by the asessee company stands accepted as such; 7.2 The Learned AR submitted mere substituti .....

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m the premises of Shri Salek Chang Garg. 8.2 It was submitted that the revenue before making the impugned addition has not established any nexus of the said figures with the appellant company 8.3 It was submitted that in absence of any nexus of the said figures adverse inference drawn is entirely misplaced more particularly in light of the undisputed facts submitted in sub-para (a) to (j) of para 2.1 of this synopsis. 8.4 It was submitted that the statement of Shri Salek Chand Garg was recorded .....

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ies namely entries at pages 179 to 184 are sales of the appellant company 8.6 The Learned AR added here that even Shri Salek Chand Garg in a subsequent statement recorded on 21.10.2011 (pages 108A-110A of type copies of statement) has not even alleged that such diaries pertains to appellant company. On the contrary he has admittedly to the fact that such diary pertains to his business. It was also submitted that the learned Assessing Officer has therefore deliberately in the order of assessment .....

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connection of Shri Salek Chand Garg with the appellant company. It was clearly stated that assessee had only dealing with Shri Sawar Mal Goyal and there is no material on record to establish any dealing with Shri Salek Chand Garg. 8.7 It was submitted that the revenue has not led any material to rebut the above statement despite having framed assessment twenty one months after recording the said statement of the director. Also even Shri Sawar Mal Goyal has not been examined by the authorities be .....

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a ground to overlook, reject and discard tangible documentary evidence. It was also submitted that the said inferences are also being drawn on the basis of record of a third party whose testimony was unbelievable as he has himself adopted shifting stands. Reliance was placed on the judgment of Hon ble Apex Court in the case of CIT vs. P.V. Kalynsundaram reported in 294 ITR 49 holding that in which allegations of on money transaction on the basis on non convincing loose sheets found during the co .....

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e of CIT vs. Prem Prakash Nagpal reported in 220 Taxman 168 (Del) (Mag) (pages 963-966 of JPB) to hold that third party evidence cannot be a ground for making addition in absence of any corroborative material found from the assessee. 9.1 The Learned AR submitted that the sale is always between two parties and once there is no evidence either seized or gathered from the two parties then it would not only be highly improper but also unjust and arbitrary to assume undisclosed sales between the said .....

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here is not even a single instance referred to by the Assessing officer in the order of assessment, which is based on concluded sales transaction. Therefore, in absence of any material to suspect let alone establish that any of the actual sales made by the appellant company had an element of understatement of consideration, the allegation remains totally and, wholly unsubstantiated and, as such the addition made is untenable, unwarranted and, unsustainable. The Learned AR submitted that, in the .....

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AR contended that last but not the least even the statement recorded of Shri Salek Chand Garg on 7.1.2010 is behind the back of assesee and therefore perse the same cannot be relied upon as has been held in the following cases: i) 125 ITR 713 (SC) Kishni Chand Chella Ram v CIT (pages 944-948 of JPB) ii) 288 ITR 345 (Del) CIT vs. SMC Share Stock Brokers iii) 293 ITR 43 (Del) CIT vs S M Aggarwal (pages 896-898 of JPB) iv) 295 ITR 105 (Del) CIT vs. Dharam Pal Prem Chand Ltd v) 303 ITR 95 (Del) CIT .....

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T ii) 40 TTJ 668 (Ind) Brij Lal Rupchand vs. ITO iii) 63 TTJ 532 at 535 (Delhi) S K Gupta vs. DCIT 9.4 The Learned AR humbly submitted further that no evidence has been brought on record by learned Assessing Officer to connect the seized documents with the assessee. Infact the Hon ble ITAT in the case of Ashwani Kumar reported at 39 ITD 183 at page 193 has held that mere finding of dumb document cannot be made the basis for making any addition. It went on further to hold that unless the revenue .....

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nt has been found from the possession of third party and, there is no material to show that any money has been received, no income can be brought to tax. Reliance has been placed on the judgment of Hon ble Delhi High Court in the cases of CIT vs. Kulwant Rai reported in 291 ITR 36 and CIT vs, D.K. Gupta reported in 308 ITR 230. 9.6 The Learned AR also placed reliance on the decision in the case of CIT V Genesis Commet (P) Ltd reported in 163 Taxman 482 (Del), wherein it has been held that, an of .....

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s no MOU is found but unsigned paper have been found from the residential premises of former director of the appellant company. Infact, here too the appellant has denied receipt/payment of any money and, even the buyers of space in the projects have never alleged payment of any on money. Further, there is no corroborative evidence and, in such circumstances, the paper is a dumb document. 10. The Learned AR contended that it is settled law that no addition can be made on the basis of surmises, su .....

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nd Bhagat Ambica Ram vs. CIT Learned AR also placed reliance on the judgment delivered by Hon ble Supreme Court in the case of CBI vs. V.C. Shukla and Others reported in 3 SCC 410 (SC) (pages 537-550 of JPB) (arising out of SLP Crl. Nos. 1716 of 1997); wherein it was held that evidence to be used against accused should be evidence acceptable to process of law. An evidence, which is not found in possession of a person, cannot be used against him unless the evidence being used is supported by othe .....

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result of the comparative companies tabulated at page 22 of CIT(A) order. 13. In such circumstances the submission of the Learned AR remained that on any of the ground the addition made is not tenable and unsustainable. 14. Without prejudice to the aforesaid, the Learned AR submitted that learned AO has applied a GP rate of 10% and learned CIT(A) has reduced such GP rate to 5% failing to appreciate that GP rate declared by the appellant in respect of manufacturing was merely 1.24% as such, if th .....

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icer was having no option but to estimate the suppressed profit by applying g.p. rate of 10% on the undisclosed sales of ₹ 83.76 crores resulting into the addition of ₹ 8,37,60,000 on account of profit made on undisclosed sales by the assessee company. The Learned CIT(DR) submitted that the statements recorded during the course of search has got substantial value than the retraction made later. He submitted that datewise payments has been recorded in the diary seized. The Learned CIT .....

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und ₹ 38.82 crores. Thus, the total sales worked out to ₹ 83.76 crores (Rs.38.82 + ₹ 44.94). On the said amount of sales, a g.p. @ 10% is computed resulting into profit of ₹ 8,37,60,000 on account of undisclosed sales. 16. Considering the above submissions, we find that the addition of ₹ 8,37,60,000 was made by the Assessing Officer on account of profit on alleged undisclosed sales made by the assessee on the basis of Annexure-A1, a diary containing pages 1 to 191 s .....

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10% of the sales amount. The Learned CIT(Appeals) has held that the statement of Shri Salek Chand Garg recorded at the time of search was spontaneous, hence, is more reliable and as such transaction recorded in diary belong to the assessee. He, however, held that gross profit rate applied by the Assessing Officer at 10% is excessive and he took the gross profit of assessee @ 5% and deleted the addition of ₹ 4,18,80,000 and sustained the addition of ₹ 4,18,80,000. 17. On perusal of t .....

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of account, proper income cannot be adduced? ; & (iii) even if, it is held that non-reliance on the books of account was justified, then as to whether application of g.p. rate at 10% by Assessing Officer and 5% by Learned CIT(Appeals) was reasonable to estimate the profit? 18. Sub-issue No. (i) : It is an admitted fact that Annexure A1, a diary was seized from one Shri Salek Chand Garg from his premises and his statements were recorded during the course of search and after search during the .....

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in his statement recorded on 21.10.2011 by the Assessing Officer, Shri Salek Chand Garg vide question No.2 was required to state his business and source of income. In response, he stated that he is proprietor of M/s. Ashutosh Hot Rerolling which is situated at B-31, Industrial Area, Wazirpur, New Delhi, where he does job work. He replied further that he is also the proprietor of Shivan Industries, Shahbad, Daultpur where he does job work. He replied that these are his source of income and apart .....

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statement recorded under sec. 131 of the Act Shri Salek Chand Garg has not stated that he has any business connection with the assessee. He stated that transaction recorded in the diary belongs to him and were cash transactions entered with different entities/businessman. He also stated during the assessment proceedings that he never stated that he worked as commission agent for the assessee and transaction recorded in the diary pertained to sale and purchase made on behalf of the assessee. Shri .....

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Mal Goel by cheques and TDS was also deducted. 19. It is an established proposition of law that entries found recorded in the books of account of third party or statement recorded under sec. 132(1) of the Act or 131 of the Act of a third party are binding upon him in his own case only and the same cannot be foisted upon the other party in the absence of sufficient corroborative material, more particularly, when such third party do not admit any business relationship with the assessee. The statu .....

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. Shukla (supra) has been pleased to hold that an evidence which is not found in the possession of a person cannot be used against him unless the evidence being used is supported by other concrete evidence. When the Revenue in the present case sought to rely upon the statement of Shri Salek Chand Garg and diary found from his possession, the burden was on the Revenue to produce Shri Salek Chand Garg for cross examination of the assessee and the addition made without affording this opportunity of .....

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found in the course of the search was duly reconciled with the books of account. The entire sales as made by the assessee during the year aggregate to ₹ 699.73 crores and sale of manufactured goods is of ₹ 257.51 crores and the quantity-wise details furnished by the assessee have been accepted as such. Not a single party has been examined before drawing adverse inference regarding undisclosed sales made by the assessee. It is also worth noting that the sale is always made between the .....

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ing the third party statements and the entries recorded in the diary found from the possession of the third party during the course of search. The sub-issue No. (i) is accordingly decided in favour of the assessee. 20. Sub-issue No. (ii): The contention of the Learned AR remained that the entire addition is based on presumption. The assessee has maintained complete books of account, which are audited, the goods manufactured and sold by the assessee are excisable and no defects has even been foun .....

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le parties and no evidence has been gathered post-search to unaccounted sales. It was also contended that not a single party has been examined before drawing adverse inference. 21. In our view, it is a settled position of law that estimation of profit by applying a reasonable g.p. rate can be adopted and applied only when it is not possible for the Assessing Officer to deduce the profit of the assessee on the basis of books of accounts produced by the assessee. In such a situation, the Assessing .....

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No.(i), the Assessing Officer was having no reason to reject the books of account of the assessee, hence, he was not justified to jump on the second step for estimation of the profit by applying different g.p. rate than that shown by the assessee. The sub-issue No.( ii ) is thus decided in favour of the assessee. 22. Sub-issue No.(iii): No plausible reason has been assigned by the Assessing Officer for application of g.p. rate at 10% nor has the Learned CIT(Appeals) assigned any convincing reas .....

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the addition even by restricting it by applying g.p. rate at 5% against 10% applied by the Assessing Officer. We thus while setting aside orders of the authorities below in this regard direct the Assessing Officer to delete the addition of ₹ 4,18,80,000 sustained by the Learned CIT(Appeals). The ground Nos. 1, 1.1 to 1.5 of the appeal preferred by the assessee on the issue are thus allowed and ground No. 2 of the appeal preferred by the Revenue is thus rejected. 24. Ground Nos. 2, 2.1 to .....

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ed investment in stock with this observation that there was difference of ₹ 17,69,98,750 in the valuation of stock as per bank statement furnished to the bank and the stock as per stock register seized as page Nos. 1 to 119 of annexure A-9 and annexure A-35. He placed reliance on the decision of Hon'ble Punjab & Haryana High Court in the case of B.T. Steels Ltd. vs. CIT (2011) - 196 Taxmann 362 (P&H) holding that the ITAT was justified in sustaining the addition made by the Ass .....

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ut of twelve items and that there was no difference in rates. The variation in quantity of raw-material of six items was imaginary to obtain credit facility from bank on account of financial crises. The Learned AR submitted that there was no difference in the stock on the date of search and the stock was not pledged with the bank but only hypothecated to bank. Learned AR contended that the stock statement given to the bank cannot be a basis to assume unexplained investment in stock and placed re .....

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A1 (diary) seized from Shri Salek Chand Garg. On the basis of the diary, he observed that there is unexplained investment in stock of ₹ 11,97,85,000 which was not separately being made as it was covered by the addition of ₹ 17,69,98,750. The Learned CIT(Appeals) has dealt with this issue at page Nos. 35 to 40 of the First Appellate Order. He submitted further that complete books of account are duly supported by stock register maintained by the assessee company which was audited as p .....

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e books of third party alone cannot be a basis to presume that there was unexplained investment in stocks, particularly when nature of stock was also not known, where it was kept. It is also contrary to the statements of the persons from whose possession diary had been seized by the Revenue. He had also not alleged that he was in possession of any stock of the assessee. 28 The Learned AR submitted further that the Learned CIT(Appeals) was not justified in sustaining the addition of ₹ 6,62, .....

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stands accepted in an order u/s 143(3) of the Act then there can be no unexplained investment in opening stock. The relevant evidences are as under: i) Audited financial statements as on 31.3.2009 (pages 231-278 of Paper Book) ii) Order of Assessment for Assessment for Assessment Year 2009-10 (pages 767-769 of Paper Book) Reliance has also been placed on the following judgments in support of the contention that if closing stock is accepted then opening stock cannot be distributed: i) 318 ITR 20 .....

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ined investment for Assessment year 2009-10, as has been held in the case of CIT vs. Om Prakash Mahajan reported in 152 ITR 583 (Del) k) That even otherwise the closing stock having been accepted, it has to be held that such stock was sold and therefore there was loss and, as such no addition is untenable. This was held by the judgment of Hon ble Delhi High Court in the case of J.M. Wire Inds. Vs. CIT in ITA No. 96/1989 dated 15.7.2010 4.4 In view of the aforesaid, the addition sustained of S .....

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d Annexure A-35 9,73,35,111 (page 19 of order) Addition 17,69,98,750- 30. The Learned CIT(Appeals) has dealt with the issue in para Nos. 6.5.1 to 6.5.4 at page No. 30 to 34 of the First Appellate Order while deleting the addition of ₹ 11,69,98,750 out of ₹ 17,69,98,750 made by the Assessing Officer on account of unexplained investment. The Learned CIT(Appeals) has noted the break up of the stocks as declared to the bank and stock register as under: Sr. No. Particulars Amount (Rs.) St .....

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(MT) Stock Register (MT) TALLIED i) Scrap 18,200 1680 1680 3,05,76,000 ii) Silicon Manganese 49,000 44.70 44.70 21,90,300 iii) Flourspar 21,500 153.40 153.40 32,98,100 iv) Dolomite 2,800 45.00 45.00 1,26,000 v) Lime 2500 108.00 108.00 2,70,000 vi) Met Coke 4625 23.00 23.00 1,06,375 Sub Total (A) 3,65,66,775 Sr. No. Particulars Quantity Bank statement Stock Register Difference Quantity Value NOT TALLIED i) S S Scrap 360000 551.10 51.10 500 1,80,00,000 ii) HC Ferro Charome 43300 1110.00 110.00 10 .....

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s no difference in stock on the date of search and that the stock has not been pledged with the bank but only hypothecated to bank as such stock statement given to bank cannot be a basis to assume unexplained investment in stock. In this regard, he placed reliance on several decisions. We also find that on the issue, there are several decisions in favour of the assessee as well as the Revenue. In such a situation, it is now a well settled position of the law that in absence of decision of Hon .....

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i Salek Chand Garg observed that there was unexplained investment in stock worth ₹ 11,97,85,000 which was not separately added as it was covered by the addition of ₹ 17,69,98,750. The Learned CIT(Appeals) observed that the Assessing Officer has furnished two accounts extracted from the seized diary of Shri Salek Chand Garg. One account pertained to page No. 179-184 of the diary and the other account pertains to page No. 177 and 178 of the diary. The Learned CIT(Appeals) has reproduce .....

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has taken the peak figure of stock from both the accounts which is not justified because data of table-1 and table-2 almost relates to same transaction and tallied datewise. Therefore, either of the two tables is to be considered for peak investment in stock. It was found that maximum stock was available as on 01.04.2009 for 1324.7 MTs as per table-2. After comparing both the tables, the Learned CIT(Appeals) took peak figure of table-2 as peak investment in stock worth ₹ 6,62,35,000. The L .....

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able. He, therefore, restricted the addition of ₹ 17,69,98,750 on account of undisclosed stock to the amount of peak investment of ₹ 6,62,35,000. We, however, find substance in the contention of the Learned AR against the sustenance of the addition of ₹ 6,62,35,000 made by the Learned CIT(Appeals) that once closing stock as on 31.3.2009 has been accepted in the assessment order framed under sec. 143(3) of the Act, there cannot be unexplained investment in opening stock. In supp .....

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when nature of stock is also not known, where it was kept. It is also not the case of the Revenue that Shri Salek Chand Garg was in possession of any stock of the assessee. The conclusion of the Learned CIT(Appeals) that stocks as on 01.04.2009 of 1324.70 MTs is based on page Nos. 177 to 178 of the diary, tabulated at page No. 31 of the First Appellate Order, per se is a misnomer. The closing stock as on 31.3.2009 in any case cannot be added as unexplained investment for the assessment year unde .....

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deleted. The ground No. 3 of the appeal preferred by the Revenue is thus rejected and ground No. 2, 2.1 to 2.4 are allowed. 34. Ground No.4 (Revenue) and Ground No.3(Assessee): The Assessing Officer on the basis of the documents seized from the official premises of the assessee observed that the said official premises was purchased from one Shri Saroj Bala Gupta on 17.12.2009 for the consideration of ₹ 28,25,000. The circle rate at which the sale deed was registered was ₹ 49,85,010 .....

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to the seller in cash outside the books of account by utilizing unaccounted income for the assessment year under consideration and held the investment as undisclosed investment within the provisions of sec. 69 of the Income-tax Act, 1961. 35. The assessee contended above action of the Assessing Officer with this submission that the Assessing Officer has applied the provisions of sec. 50C of the Act on the buyer, whereas the said provisions will always be applicable on the seller of the property .....

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e of the property in absence of finding of incriminating papers relating to the transaction of cash or otherwise or any other corroborative evidence to support. The Learned CIT(Appeals) has, however, adopted the cost of construction shown at ₹ 39,66,750 in the said valuation report as based on CPWD/Govt. approved schedule of rates and the value of the land as per circle rate. The Learned CIT(Appeals) added the above stated two values i.e. value of the construction on the land and value of .....

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icer as the same was based upon the value shown in the valuation report found during the course of search from the official premises of the assessee. The AR on the other hand reiterated the submissions made before the authorities below in this regard. He submitted that no evidence was found during the course of the search or gathered during the assessment proceedings to allege unexplained investment in property. On the other hand, there were sufficient evidence on record to support his submissio .....

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des that vendor is to obtain consent from husband, sons and daughters before sale deed; and sale deed dated 17.12.2009 ( page Nos. 345 to 352 of the paper book). 37. The Learned AR submitted further that in case of a buyer, circle rate cannot be made a basis to allege unexplained investment in property under sec. 69 of the Act and placed reliance on the following decisions: a) 256 CTR 371 (Del) CIT vs. Khoobsurat Resorts (P) Ltd.; b) 323 ITR 510 (P&H) CIT vs. Chandni Bhuchar; c) 220 Taxman 1 .....

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rect, as the property had not vested with the assessee and payment of ₹ 20 lacs was outstanding. The Learned CIT(Appeals) has also noted that the rate of land adopted for valuation at ₹ 90,000 per sq. yd. is not even the rate as per A category whereas property is in D/E Category . Even otherwise, valuation report cannot be made the basis of addition, particularly when books have been accepted and there is no material to disbelieve the sale deed. He placed reliance on the following de .....

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760/D/2011 A.Y. 2003-04 dated 11.4.2014 ACIT vs. Rashmi Chaturvedi 39. The Learned AR contended further that under sec. 69 of the Act, the burden is upon the Revenue to establish that the assessee had made investment, which burden remained to be discharged. Thus, it was not permissible in law to draw adverse inference against the assessee. In support, he cited the following decisions: a) 131 ITR 597 (SC) K.P. Varghese v. ITO b) 316 ITR 46 (Del) CIT v. Shakuntala Devi; c) 335 ITR 572 (Del) CIT v. .....

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