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2016 (2) TMI 81 - ITAT AHMEDABAD

2016 (2) TMI 81 - ITAT AHMEDABAD - TMI - Unexplained investment in purchase of flat - Valuation of the residential flat - adoption of value as per jantri rate by CIT(A) - Held that:- The assessee who is not having any business income and is only earning income from salary and interest is not required to maintain any books of account. However, assessee has submitted details of cash book ledger, balance sheet and purchase bills and submitted that all the investments made in residential flat are ha .....

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tion 50C of the Act refers to the value adopted or assessed by any authority of State Government for the purpose of payment of Stamp duty and ld. CIT(A) has rightly taken the value as per jantri rate at ₹ 4,79,400/-.

The assessee’s submissions that the income surrendered at ₹ 2 lacs during the statement given u/s 132(4) of the Act should not be given any cognizance as the same has been given on oath and has not been retracted in a reasonable time. Also the fact remains tha .....

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7; 4,00,000/- as received by assessee as housing loan because some element of savings of previous years cannot be eliminated and in the interest of natural justice, we think that assessee certainly should have possessed its own fund and also in view of the surrender made by the assessee we sustain the addition to ₹ 2,00,000/- and thus assessee will get relief of ₹ 1,49,970/-. - Decided partly in favour of assessee - IT(SS)A No.107/Ahd/2012 - Dated:- 5-1-2016 - Shri Rajpal Yadav, JM, .....

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are that a search action was carried out at the residential premises of the assessee in connection with Rivaa Group on 20/01/2009. Thereafter the case was centralized vide order u/s 127(2) of the Act and notice u/s 153A of the Act was issued on 27.07.2009 in response to which assessee filed the return of income on 29.9.2009 showing income of ₹ 1,20,136/- from salary and other sources. The case was selected for scrutiny assessment u/s 143(2) of the Act and income was assessed at ₹ 7,2 .....

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surrender made was deemed to be retracted. 3. The reason for addition of ₹ 6,06,000/- u/s 69B for unexplained investment in the residential flat has arisen during the course of search at the residence of the assessee where valuation report dated 5.1.2005 issued by Govt. approved Valuer was found pertaining to flat No.402 Vaishnavi Apartments, City Light Area, Surat, showing value of the flat at ₹ 9,67,000. Also during search, Registered Sale Deed of this flat was found showing purcha .....

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ential flat. 4. Aggrieved, assessee went in appeal before ld. CIT(A) who partly allowed the appeal by restricting the addition to ₹ 3,49,970/- and observed as under :- 5. I have considered the submissions and the arguments of the learned counsel for the appellant and also carefully gone through, the order. The Assessing Officer has made the addition on the basis of difference of valuation of flat No.402, Vaishnavi Apprts., City Light Area, Surat done by Shrt Mahendra P. Goyal, Chartered En .....

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on of the flat was got done by the appellant himself before the purchase of the flat. It is noticed that the sale deed was found to be registered by way of paying additional stamp duty of ₹ 40,270/-on the value of flat as per jantri rate adopted by sub registrar at ₹ 4,70,400/-. On perusal of the statement of the appellant recorded u/s. 132(4) of the Act, it is noticed that the appellant himself has made disclosure of ₹ 2,00,000/- on account of investment in 'flat and its r .....

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ixture to the seller of the flat in cash. Other than the cash payment of ₹ 2,00,000/-, no payment in. cash was made to the seller. In reply to G.Nos.20 & 21, he submitted that the payments were made from his savings and from his wife's savings and also from loan taken from the relatives and friends. He promised to submit the details later on because the details were not readily available. The appellant was also shown page No.7 to 26 which is sale deed of the flat wherein the sub re .....

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counted payment of ₹ 2,00,000/- either before the ADIT, Assessing Officer or any of the higher authorities. Although the appellant submitted during the course of statement recorded u/s.132(4) that the valuation of flat was got done for obtaining loan from bank but on perusal of the amount of loan granted, it is found that the loan of ₹ 4,00,000/- was obtained from the bank as against valuation of ₹ 9,67,000/- which come to 40% of the value of the flat. Normally, the bank grants .....

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00/- Rs.19,304/- Rs.91,096/- Rs.60,000/- 2002-03 Rs.1,10,400/- Rs.28,834/- Rs.81,566/- Rs.60,000/- 2003-04 Rs.1,10,400/-; Rs.24.373/- Rs.85,527/- Rs.60,000/- 2004-05 Rs.1 ,36,0007- Rs.46,509/- Rs.89,491/- Rs,60,000/- 2005-06 Rs.1, 59,0007- Rs.65,963/- Rs.93,037/- Rs.60,000/- It is clear from the copy of the bank account and capital account that the appellant had no cash withdrawal for payment of cash of ₹ 2,00,000/- to explain the source of investment in furniture and fixture which was dis .....

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et dtd. 21.09.2011) that the disclosure statement of ₹ 2,00,000/- was never retracted in writing before the ADIT, Assessing Officer OF any higher authorities and the source of investment in furniture and fixture of ₹ 2,00,000/- was not explained before the Assessing Officer. Even the appellant has not shown the (purchase value of fiat at jantri rate of ₹ 4,79,400/-. Considering the jantri rate of flat, Investment in furniture and fixture and stamp duty, the minimum investment w .....

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urniture and fixture and the renovation etc. so, even if it is accepted that the higher valuation of flat .was got done for obtaining bank loan and jantri rate is accepted as correct investment along with undisclosed payment of ₹ 2,00,000/- admitted by the appellant, the unaccounted investment comes to ₹ 3,49,970/- for which the appellant could not explain the source and in .fact, considering the gross income declared, withdrawal for household expenses and investment and tax payment, .....

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eal is partly allowed. 5. Aggrieved, the assessee is now in appeal before the Tribunal. 6. The ld. AR submitted that valuation report by the Registered Valuer as discussed above is not relevant because it was got prepared for getting housing loan and on the basis of this report he was able to get a loan of ₹ 4 lacs only and if the value of flat had been ₹ 9,67,000/- then the bank would have given him higher amount of loan, which was not the case and assessee received ₹ 4,00,000 .....

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or the renovation of the flat and due to this reason ₹ 2,00,000/- was not shown in the return of income in pursuance to notice u/s 153A of the Act. Further ld. AR submitted that the addition made by the Assessing Officer was not made on the basis of any material unearthed during the search proceedings and no corroborative evidence on record was found by the Assessing Officer to prove that assessee has paid any sum over and above than that specified in the agreement to the vendor. Ld. AR al .....

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on oath u/s 132(4) of the Act during search proceedings and he has not retracted the statement and further sufficient evidences were unearthed by the search team by way of seizure of documents relating to valuation of the flat as well as sale-deed of the flat and there was clearly variation in between the valuation as per the valuer s report and amount paid as purchase consideration by the assessee and further valuation taken by Sub-registrar was a different figure. Ld. DR further submitted that .....

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ments depicted different value of the residential flat were found and statement on oath u/s 132(4) of the Act was made by the assessee for surrender of ₹ 2 lacs as undisclosed investment in the flat. As per the documents found during search operation the valuation of flat as per Registered Valuer report was shown at ₹ 9,67,000/-, and purchase consideration including Stamp duty as per registered sale deed paid by the assessee for purchase of flat was ₹ 4,01,270/-, whereas valuat .....

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Bank and finally assessee received ₹ 4 lacs housing loan on this property. During assessment proceedings assessee has also submitted that there has been investment in the furniture, fixtures and other household goods in the flat and the investment in the furniture, fixtures and household goods has been made at ₹ 1,76,128/-. 9. Ld. CIT(A) in order to accept the contentions of the assessee that investment in furniture, fixtures etc. at ₹ 2 lacs has been sourced from the previous .....

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tain any books of account. However, assessee has submitted details of cash book ledger, balance sheet and purchase bills and submitted that all the investments made in residential flat are having proper source in the form of accumulated capital balance of the assessee for past few years as well as housing loan from Canara Bank. We are further of the view that valuation report cannot be taken as an evidence for arriving at valuation of the residential flat as it was dated before the date of purch .....

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