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2016 (6) TMI 126 - ITAT DELHI

2016 (6) TMI 126 - ITAT DELHI - TMI - Addition on unexplained investment u/s 69B - Held that:- Here is a case in which the assessee claimed to have purchased the property for a sum of ₹ 40,00,000/- and the Assessing Officer has made addition of ₹ 90,64,575/- on the basis of difference between the market price and apparent sale consideration. No attempt has been made for verifying the price from the seller of the property. In other words, there is no positive material evidencing the m .....

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artment against the order dated 26.04.2013 of CIT(A)-XXIII, New Delhi for A.Y. 2009-10 on the following grounds of appeal: 1. On the facts and circumstances of the case, the ld. CIT(A) has erred in accepting the additional evidence in violation of Rule 46A of the Income Tax Act. 2. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting the addition of ₹ 50,64,575/- on account of purchase of immovable property. 3. On the facts and circumstances of the case, the ld. .....

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iness income, income from house property and income from other sources. During scrutiny assessment proceedings, the Assessing Officer verified the details of purchase of immovable property for a consideration of ₹ 40,00,000/-. The Assessing Officer found that the sale deed had been registered for a value of ₹ 40,00,000/- whereas the value of the property as per the circle rates had been mentioned in the registered deed at ₹ 90,64,575/-, and the assessee had paid the stamp duty .....

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been revised by the government to ₹ 40000 per sq. mtr. The Assessing Officer held that the assessee did not file any evidence of booking of the commercial space or of payment of any booking amount in the year 2006. The Assessing Officer applied the provisions of section 50C and added the difference between the value as per the circle rates and the sale consideration as per the sale deed, which worked out to ₹ 50,64,575/-. Further the Assessing Officer found that the assessee had borr .....

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erving as under: 4. The above written submissions of the assessee have been carefully considered. I have also carefully perused the case laws relied upon, and gone through the assessment order and remand report. The first issue in appeal is of the addition of ₹ 50,64,575/- u/s 50C in respect of purchase of immovable property. The Assessing Officer has applied the provisions of section 50C to hold that the full value of the consideration paid for acquiring the property shall be deemed to be .....

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ble only for the computation of income from capital gains, and can only be invoked where the assessee has transferred a capital asset and disclosed sale consideration of less than the value adopted or assessed by the stamp valuation authority. It is vehemently argued that the provisions of sec. 50C cannot be applied to the buyer of the capital asset, or to the purchase consideration. The assessee has relied upon the judgment of the jurisdictional High Court in the case of CIT vs. Khoobsurat Reso .....

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ion 50C relates only to the seller of the property and not to the buyer of the property. Reliance has been placed on a number of case laws including that of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC), to argue that in the absence of any evidence brought on record to show that the assessee had invested more than the purchase consideration disclosed, addition made for unexplained investment could not be sustained. It is seen that the facts of the appellant s case are squarely covered by the jud .....

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on akin to section 50C would have been included in the statute book, to assess income on the basis of similar fiction in the case of the assessee who acquires such an asset. It is held accordingly that the provisions of section 50C cannot be applied to the case of the assessee, who is the buyer of the asset in question, and not the seller. 4.1 The counsel for the assessee has also pointed out that the provisions of section 56(2)(vii) could not have been applied in this case as the relevant provi .....

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ions of section 56(2)(vii)(b)(ii) have been withdrawn from the date of enactment itself. This contention is also found to be correct. Section 56(2)(vii)(b)(ii) was on the statute only between the Finance Act of 2009 and 2010 and has been removed from the Income Tax Act with retrospective effect from the date of its insertion. Hence the Assessing Officer s reliance on section 56(2)(vii) cannot be upheld. 4.2 Even on facts, it is found that the assessee booked the property bearing No. 3, GH5, Ahin .....

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urchase has been registered on 09.07.2008. The Assessing Officer has disbelieved the contention of the assessee that the property was booked in 2006, when the circle rates were only ₹ 14,000/- per sq. mtr., as against circle rates of ₹ 40,000/- per sq. mtr. in 2008, on the grounds that the assessee did not file evidence of booking or of payment in 2006. Considering the evidences filed by the assessee in the form of booking letter of M/s Nirala Developers P. Ltd., ledger account of th .....

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ng the addition of ₹ 10,00,000/- as unexplained cash credit u/s 68. The Assessing Officer has treated the unsecured loan taken from the father of the assessee as unexplained, as the assessee failed to file confirmation supported by the bank statement and return of income of the lender. The assessee has stated that inadequate time was allowed by the Assessing Officer to obtain the bank statement, however, the copy of bank statement, return of income, and PAN card of Shri Khurshid Alam have .....

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hurshid Alam has sold an immovable property during the financial year 2008-09 for ₹ 42,50,000/-. It is submitted that two cheques of ₹ 21,25,000/- each were deposited in his bank account, as noted by the Assessing Officer. The assessee was directed to file the copy of sale deed in question, which has been verified, and proves the receipt of ₹ 42,50,000/- by Shri Khurshid Alam on 28.05.2008. A confirmation has been filed by Shri Khurshid Alam affirming that he has given an inter .....

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rities and the case laws relied upon by the assessee. Here is a case in which the assessee claimed to have purchased the property for a sum of ₹ 40,00,000/- and the Assessing Officer has made addition of ₹ 90,64,575/- on the basis of difference between the market price and apparent sale consideration. No attempt has been made for verifying the price from the seller of the property. In other words, there is no positive material evidencing the making of actual investment by the assesse .....

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sum of ₹ 3.50 crore and the AO has made addition of ₹ 5,59,66,000/- lac simply on the basis of difference between the DVO s report and apparent sale consideration. No attempt has been made for verifying the price from the seller of the property. In other words, there is no positive material evidencing the making of actual investment by the assessee over and above ₹ 3.50 crore. Under such circumstances, there can be no point in making any addition towards unexplained investment .....

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