TMI Blog2015 (11) TMI 1721X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, thus, it cannot be held that municipal ratable value cannot be the basis for determination of deemed ALV. Accordingly, respectfully following the decisions of the Tribunal and also the principle laid down by the Hon’ble jurisdictional High Court, we decide this issue in favour of the assessee Undisclosed income in the light of section 69B - cash payment from unaccounted sources have been made - Held that:- Similar issue based on similar documents were there in the group concerns of the assessee wherein the Tribunal in all the decisions have decided this issue saying that there was no evidence that any extra cash other than the sale consideration as recorded in the deed had changed hands. No statement of the sellers of the land had been recorded. No other corroborative evidence has been produced on the file by the Revenue Authorities to substantiate their allegation. The addition in this case has been made on the basis of the entries in the loose paper found during the search action, which at the most can be considered to have raised a suspicion about the transfer of money other than the sale consideration, but the suspicion itself and solely cannot be held to be a justifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On the facts and circumstances of the case and in law, the Hon ble CIT(A) erred in confirming the addition made by the AO of ₹ 64,60,000/- on account of alleged undisclosed investments in Alibaug land u/s 69B of the Income Tax Act, 1961. The appellant prays that the said addition is unjustified and requires to be deleted . 3. Besides this, the assessee has raised following as an additional ground:- On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition made by Ld. AO u/s 23(1)(a) of the Act, inspite of the fact that no incriminating material was found during the course of search action undertaken u/s 132 of the Act. It is submitted that the assessment year under consideration is not abated and accordingly the action of the CIT(A) is contrary to the Bombay High Court decision in the case of Commissioner of Income Tax vs. All Cargo Global Logistics Ltd reported in 374 ITR 645 . 4. On the legal issue as raised vide ground no. 1 and additional ground, the Ld. Counsel for the assessee submitted that, here in this case the original return of income was filed on 31.7.2006, declaring income of ₹ 53,94,498/- and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a flat in the same complex showing a monthly rent of ₹ 17,000/- for the financial year 2010-11. The AO after reducing/indexing the average annual rent fees of 10% and applying the same for AY 2006-07, he worked out monthly rent of ₹ 10,550/- for each flat and determined the deemed ALV at ₹ 5,06,400/- in terms of section 23(1)(a). This action of the AO has been confirmed by the Ld. CIT(A). 8. From the perusal of the assessment order, we find that nowhere AO has referred to any material that annual rental value shown by the assessee is not correct. ALV as per Municipal ratable value is an accepted method of valuation at least in cases of vacant premises. As pointed out by ld. counsel Tribunal in series of decisions in Group cases the Tribunal on similar facts and for similar complex has held that, where the flat has been lying vacant then the ALV u/s 23(1)(a) can be valued at Municipal ratable value. The lists of such cases are as under:- Sr No. Name of Assessee Relation with Assessee AY ITA No ITAT Mumbai Date of Order Particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held that municipal ratable value cannot be the basis for determination of deemed ALV. Accordingly, respectfully following the decisions of the Tribunal and also the principle laid down by the Hon ble jurisdictional High Court, we decide this issue in favour of the assessee and accordingly, ground no. 2 3 are treated as allowed. 9. In view of our finding on merits, the legal issue raised on this addition that it is beyond the scope of section 153A is not adjudicated as same has become purely academic. 10. So far as issue raised with regard to addition of ₹ 64,60,000/- on account of alleged undisclosed income in the light of section 69B, Ld. Counsel, Shri Vijay Mehta submitted that this issue is squarely covered in favour of the assessee by the various decisions of Tribunal in the group concerns of the assessee. He submitted that the addition is based on seized documents found from the office of Jai Corp Group containing various details of land purchase in Alibaugh by the assessee. The said document, as per the AO revealed that total consideration was in excess of the agreement value hence, the AO has concluded that cash payment from unaccounted sources have been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Shri Anand Jain vs DCIT in ITA No. 2707, 2708 2709/Mum/2013, order dated 17.04.2015 is reproduced hereunder :- 5. We have heard the rival contentions of the Ld. Representatives of both the parties and have also gone through the record. The Ld. A.R. of the assessee, before us, has submitted that except the seized document, the contents of which have been duly explained by the assessee, no other evidence of any kind was found or seized which would indicate that the assessee had incurred the cost of land in cash as alleged by the Revenue. He has further contended that the words mentioned in the document cash required did not mean that the cash had actually been expended. The allegations leveled by the Revenue regarding the payment of on money have not been corroborated with any reliable or convincing evidence. Even in the statements recorded of Shri Virendra Jain vice chairman of Jai Corporations on 11.05.2009 under section 131 and further affidavit dated 22.12.10 of Shri Atual Pawar, an employee of Jai Corporations, it has been duly explained that the Part A was the amount paid in advance and Part B was the balance towards budgeted cost of development for converting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of the AO, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. 23. A perusal of the aforementioned section shows that the requirement of the section is that expenditure has been found to have been incurred by an assessee in any financial year. Consequently, the assessee fails to indicate satisfactorily the source of such expenditure or any part thereof. Then section 69C is attracted in such circumstances. The emphasis is on the fact that an assessee has incurred any expenditure . This itself show that the assessee must have been found to have incurred any expenditure to invoke the provisions of Sec. 69C of the Act. Even if for the sake of arguments, the retraction of Shri Dilip Dherai is ignored, in his reply to question No. 24 on the date of search, Shri Dilip Dherai has categorically mentioned that cash payment from Makers is at ₹ 28.01 crores and cash payment from Jai Towers is at ₹ 10.43 crores, total of these amounts works out at ₹ 38.45 crores which was provided to Shri Dilip Dherai by one Shri Sanjay Punkhia CEO of SEZ Project. Shri D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of the provisions of Sec. 69C, as per A.O s own interpretation, investments in purchase of land have been fully financed by some other persons, therefore, the addition in the hands of the assessee cannot be justified as the assessee has not incurred any expenditure. There may be one more possibility that the persons who were doing land purchase might have inflated the sale price in these loose sheets just to extract monies from their higher authorities in the guise of On-Money to be paid to the vendors. May be because of his possibility no documents were found to show that the money actually changed hands. 25. A perusal of the balance sheet of the assessee show that the authorized, issued and subscribed paid up capital is at Rs. One lakh and the assessee had not done any business during the year under consideration. With such a small corpus and no business activity, nor any has been brought on record by the Revenue, it is not acceptable that the company may have incurred such huge expenditure outside its books of account. Further in his entire assessment order, the AO himself has pointed out time and again different persons, who are alleged, to have made cash payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, the additions have been made by the lower authorities under section 69B of the Act which provides that where the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article and the AO finds that the amount expended on making of such investments or in acquiring such bullion jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income and the assessee offers no explanation about such excess amount or the explanation offered by the assessee is not satisfactory, the excess amount may be deemed to be the income of the assessee for that relevant year. So, the first requirement for the invocation of provisions of section 69B of the Act is that the amount must be expended by the assessee and which is found in excess than that is recorded in the books of the account and the assessee does not give any explanation about such excess amount. In the case in hand, except the loose papers as discussed above, no evidence was found that the assessee had incurred expenditure on the purchase of land more than that was recorded in the books of account. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case and in law, the Hon ble CIT(A) erred in rejecting the appellant s plea that the ALV of the vacant flats at Greenfields Complex should be taken at Rs. Nil. The appellant prays that the ALV of the said property may be taken at Rs. Nil. 3. Without prejudice to Ground no. 2 on the facts and circumstances of the case and in law, the Hon ble CIT(A) erred in confirming the action of the AO in assessing the ALV of vacant Flat No. B-4/64 to 67 at Greenfields Complex building at ₹ 5,57,136/- and in assessing income at ₹ 3,89,995/- under the head Income from House Property . The appellant prays that the said addition is unjustified and requires to be upheld. 4. On the facts and circumstances of the case and in law, the Hon ble CIT(A) erred in confirming the addition made by the AO of ₹ 84,00,000/- on account of alleged undisclosed investments in Alibaug land u/s 60B of the Income Tax Act, 1961. The appellant prays that the said addition is unjustified and requires to be deleted . 16. Before us, the Ld. Counsel submitted that, ground no. 1 is not pressed and accordingly, the same is dismissed as not pressed. 17. So far as issues raised vid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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