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2015 (9) TMI 739 - ITAT MUMBAI

2015 (9) TMI 739 - ITAT MUMBAI - TMI - Addition invoking section 69B - unaccounted investment - CIT(A) deleted the addition - Held that:- Assessing Officer did not have any clinching evidence to suggest that the assessee has paid any consideration for purchase of property over and above the stated consideration. The reference made by the Assessing Officer to the value determined by the stamp valuation authority for the purposes of payment of stamp duty cannot be taken as an evidence to demonstra .....

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and, at best can be a source for further enquiries but the valuation report by itself cannot be construed as an evidence which establishes understatement of purchase consideration. DVO’s estimation of fair market value cannot be accepted as a conclusive evidence for establishing that any additional consideration over and above the stated consideration has passed between a buyer and seller. See Commissioner of Income-tax Versus Dinesh Jain HUF [2012 (10) TMI 158 - DELHI HIGH COURT] and CIT vs. B .....

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reement dated 24/3/2009, copy of which has also been placed before us in the Paper Book. Therefore, we find no error on the part of CIT(A) in negating the aforesaid stand of the Assessing Officer. Amar Kumari Surana (1996 (5) TMI 36 - RAJASTHAN High Court) does not apply to the facts of the present case. - Decided against revenue. - ITA No.6688/MUM/2012 - Dated:- 19-8-2015 - SHRI G.S.PANNU AND SHRI SANJAY GARG, JJ. For The Appellant : Shri Akhilendra Yadav For The Respondent : Shri Hiro Rai ORDE .....

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/- by invoking section 69B of the Act. 3. In brief, the relevant facts are that the respondent assessee purchased a property viz. Unit No.401, Commerze Zone, Yeravada, Pune, from M/s. K. Reheja Corp Pvt. Ltd. vide a purchase agreement dated 24/03/2009 for a consideration of ₹ 9,81,60,000/-. In the course of assessment proceedings, the Assessing Officer invoked the provisions of section 69B of the Act and determined an amount of ₹ 9,39,61,200/- as value of investment made by the asses .....

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this behalf in the books of account maintained and the assessee offers no explanation about such excess amount or the explanation offered by him is not satisfactory, then the Assessing Officer is empowered to deem such excess amount as income of the assessee. Notably, in the present case, the Assessing Officer has invoked section 69B of the Act on the ground that the purchase consideration of ₹ 9,81,60,000/-reflected in the purchase agreement was undervalued to the extent of ₹ 9,39, .....

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et value of the property as determined by the stamp valuation authority for calculating payment of stamp duty was ₹ 19,21,21,200/-, which was higher than the stated consideration. Secondly, as per the Assessing Officer the Housing Development Finance Corporation Ltd., who had advanced loan of ₹ 9,50,00,000/- to the assessee towards purchase of the impugned property had valued the property at ₹ 13.74 crores, which also higher than the stated value of the transaction. Thirdly, as .....

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VO) to ascertain the value of the property and such report was awaited till the completion of the assessment proceedings. For all the above reasons, the Assessing Officer treated the stated consideration in the purchase deed as undervalued, and adopted the fair market value of the property determined by the stamp valuation authority at ₹ 19,21,21,200/- as actual market value of the investment and accordingly, the undervalued component of ₹ 9,39,61,200/- ( i. E. ₹ 19,21,21,200 m .....

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id by the assessee. Our attention was also drawn to the contents of the purchase deed dated 24/03/2009, a copy of which is placed at pages 1 to 66 of the Paper Book to point out that the same included acquisition of 55 Nos. of car parking slots at the stilt level and, therefore, the Assessing Officer was factually wrong in stating that the purchase deed did not include the acquisition of parking slots. The Ld. Representative for the assessee also clarified that the assessee has not paid any addi .....

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as much as the valuation report prepared by HDFC Ltd., showed that the value of the property was much higher than the stated consideration. Ld. DR has relied upon the judgment of Hon ble Rajasthan High Court in the case of Smt. Amar Kumari Surana vs. CIT, 226 ITR 344(Raj) to contend that circumstantial evidence can be the basis to infer undervaluation of the property. 8.1 The crux of the controversy in the present case revolves around invoking of section 69B of the Act by the Assessing Officer. .....

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ct get triggered, it is required to be established that an assessee has made investments in acquisition of a property over and above the amounts stated in the books of account. The phraseology of section 69B of the Act supports the premise that the onus to show that the assessee has invested any amount in excess of amount recorded in the books of account is on the Assessing Officer. The Hon ble Delhi High Court in the case of CIT vs. Punit Subharwal, 338 ITR 485(Del) has laid down that the prima .....

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tion for purchase of property over and above the stated consideration. The reference made by the Assessing Officer to the value determined by the stamp valuation authority for the purposes of payment of stamp duty cannot be taken as an evidence to demonstrate that assessee has actually paid any consideration over and above the stated consideration. The reference by the Assessing Officer to valuation contemplated by the lender i. E. HDFC Ltd. is also of no consequence vis-à-vis the controv .....

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of the Act in the case of CIT vs. Dinesh Jain HUF,352 ITR 629(Del) as well as Hon ble Gujarat High Court in the case of CIT vs. Berry Plastics P. Ltd., 217 Taxman 39(Mg.)(Guj) have held that the DVO s estimation of fair market value cannot be accepted as a conclusive evidence for establishing that any additional consideration over and above the stated consideration has passed between a buyer and seller. Therefore, in our view the aforesaid stand of the Assessing Officer has rightly been negated .....

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