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2016 (1) TMI 240 - ITAT HYDERABAD

2016 (1) TMI 240 - ITAT HYDERABAD - TMI - Unexplained investment- Held that:- is evident from the material on record that the sale consideration was at ₹ 11,40,000 which was received by the vendor. In my view mere payment of extra stamp duty to fulfil the Government norms, may not come in the line of any unexplained investment by the assessee and his brothers in purchase of property in question, unless any evidence is available with the department that the assessee and his brothers has pai .....

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ssment proceedings, the registration could not take place due to mortgage of plots with the HUDA and on release of the mortgaged plots by HUDA on 31.01.2007 vide Lr.No.7676/MP2/PLG/HUDA, the registration took place on 09.03.2007. The A.O. could not produce any documentary evidence that the assessee and his brothers made unexplained investment in purchase of property. Even if at all any unexplained investment has been made by the assessee and his brothers in purchase of property, the said sum cou .....

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6-10-2015 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Revenue by: Mr. M. Sitaram For The Assessee by: Mr. S. Rama Rao ORDER PER B. RAMAKOTAIAH, AM: This appeal by Revenue is directed against the order of the CIT(A)-III, Hyderabad dated 17.04.2015 for A.Y. 2007-2008. The Revenue has raised the following grounds : 1. The Ld. CIT(A) erred both in law and on facts. 2. The Ld. CIT(A) ought to have appreciated the fact that the transfer as per Section 53A of Transfer of Property Act would occur o .....

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other than the amount claimed to have been paid, in the light of the fact that the property was valued at ₹ 66,50,000 by the SRO. 4. Any other ground(s) that may be urged at the time of hearing. Ground Nos. 1 and 4 are general in nature and therefore, it need not be adjudicated. 2. Brief facts of the case are that assessee an individual is the proprietor of M/s. Nav Durga Dal Industries which is engaged in manufacturing and trading of pulses. For the impugned assessment year, the assessee .....

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, Sector-III, Block-B, Rajendranagar Mandal, R.R. District vide registered sale deed dated 09.03.2007 was identified jointly with his brothers viz., Mr. Rajender Kumar Agarwal, Mr. Ashok Kumar Agarwal for an amount of ₹ 66,50,000 whereas the registered sale deed shows the value at only ₹ 11,40,000. Admittedly, the land in question was allotted to assessee and the other co-owners vide allotment letter dated 30.07.2005 issued by Vindhya Developers and Builders P. Ltd., (VDB) and the sa .....

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₹ 11,40,000) made by the assessee to the land owner Mr. Sudha Kiran (vendor). The A.O. observed that as per the statement filed by the vendor Mr. Sudha Kiran before the SRO, Rajendra Nagar, the total market value of the above mentioned property as on the date of registration was at ₹ 66,50,000 and it is evident from the registered sale deed that the stamp duty of ₹ 5,89,470 and registration fee of ₹ 33,950 were paid by the assessee and his brothers on 09.03.2007 on the c .....

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n of the development work and registration could not take place as the said property along with few other plots were mortgaged to HUDA as per their norms and the registration would be taken place only upon release of mortgage plots by HUDA. Accordingly, after release of the mortgaged plots by HUDA, the plots in question allotted to the assessee and his brothers was registered on 09.03.2007 and the assessee and his brothers have not paid any over and above sum. The additional stamp duty paid was .....

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t order, assessee preferred an appeal before the Ld. CIT(A) contending inter alia that the A.O. has made the addition only on presumption and surmises and there is no documentary evidence before him that any extra consideration was paid by assessee and his brothers. Therefore, the A.O. is not justified in treating the stamp duty value of ₹ 66,50,000 as the consideration and that the A.O. had erroneously applied section 50C while invoking section 69B which had no basis. The Ld. CIT(A) after .....

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ions of the Ld. CIT(A) are as under : 5.1. I have considered the facts on record and the submissions of the AR. The sale consideration recorded in the sale deed dated 09.03.2007 is admittedly ₹ 11,40,000, of which the appellant's share was ₹ 3,80,000. This sum of ₹ 3,80,000 is also the amount recorded in the statement of affairs of the appellant as on 31.03.2006 as the amount paid for the land. There is no direct evidence of actual payment of any sum over and above the sum .....

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by adopting the market value as per the SRO as the sale consideration, the Assessing Officer has invoked the ratio of sec.50C which is not permitted. Sec.69B would require the Assessing Officer to establish that an investment had been actually made by the appellant for which the sources had not been explained. In the appellant s claim, there is no evidence of such an investment in the first place. 5.4. The reasoning adopted by the Assessing Officer in concluding that there was an investment ove .....

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ether it was a part payment or a full payment. The reference to the sum of ₹ 3,80,000 as an 'advance' cannot, therefore, lead to any inference adverse to the appellant. 5.5. The Assessing Officer has also referred to the fact that the land in question was part of the land mortgaged to HUDA and therefore, could not have been transferred to the appellant. Indeed, it is admitted by the appellant that the land had not been transferred in 2005 itself due to this specific restriction pla .....

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en cast on her to establish facts and circumstances from which a reasonable inference can be drawn that the appellant had not correctly disclosed the consideration paid by him. 5.7. The addition of ₹ 18,36,667 to the total income under section 69B is therefore, directed to be deleted and the appeal is allowed. 4. Aggrieved by the Order of the Ld. CIT(A), the Revenue is in appeal before us. The learned D.R. has strongly relied on the order of the Assessing Officer. The Ld. Counsel while rei .....

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actual consideration was more than what was disclosed by the assessee. It is evident from the material on record that the sale consideration was at ₹ 11,40,000 which was received by the vendor. In my view mere payment of extra stamp duty to fulfil the Government norms, may not come in the line of any unexplained investment by the assessee and his brothers in purchase of property in question, unless any evidence is available with the department that the assessee and his brothers has paid an .....

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