TMI Blog2018 (5) TMI 1837X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by assessee in his books of accounts, rather it was not discovered by the assessing officer. In our view the addition was made by assessing officer merely on assumption and presumption basis and without any evidence. - Decided in favour of assessee - ITA No.2656/Mum/2016 - - - Dated:- 25-5-2018 - SH. B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Appellant : Dr. K. Sivaram Sr. Advocate with Sh. Sashank Dandu Advocate For The Respondent : Sh. Suman Kumar (Sr. DR) ORDER PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee under section 253 of Income tax Act is directed against the order of Commissioner (Appeals)-3, Thane, dated 14th January 2016 for assessment year 2012-13. 2. Brief facts of the case are that assessee is a partnership firm, engaged in the business of builder and developer. The assessee filed its return of income for relevant assessment year on 22nd of September 2012 declaring total income of ₹ 61,10,630/-. The assessment was completed on 20th February 2015 under section 143(3). The assessing officer while passing assessment order besides the other additions made addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 4.25 Crore. The assessing officer issued notice under section 133(6) to the buyer of building No.3 i.e. M/s Classi-Mech Equipments Pvt Ltd. In response to the notice of assessing officer, the buyer filed its reply dated 14th January 2015. The buyer of building No.3, in his reply confirmed the sale price. The buyer/ M/s Classi-Mech Equipments Pvt Ltd also filed the copy of the sale agreement dated 17.06.2011. The buyer also confirmed about the exclusive access to the open area adjoining to their property which is about 12,000/- Sq feet, (recreational area) which was handed over to them by the assessee. The said area is exclusively used by them. The market value of building No.3 is ₹ 1,38,14,500/- and building No. is ₹ 1,35,55,000/-, however, the sale value of building No. 3 is ₹ 4,25,00.000/- and building No. 10 is ₹ 1,60,00,000/-. Both the buildings were sold at more than the value of Stamp valuation Authority. No notice was issued by the assessing officer to the buyer of property / building No.10. The addition was made by assessing officer solely on the basis of surmises and conjectures which is bad in law. The ld. Commissioner (Appeals) confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 8456.44 sq.ft. was sold on 17.06.2011 @ ₹ 5025 per sq. ft. for total consideration of ₹ 4.25 Crore to M/s Classi- Mech Equipments Pvt Ltd., however, building no.10 consisting area of 8211.20 sq. ft. was sold on 24.10.2011 @ ₹ 1948/- per sq. ft. for a total consideration of ₹ 1.60 Crore to M/s Viren Industries. The Assessing Officer vide order-sheet dated 08.09.2014 asked the assessee to explain the inconsistency in selling price and to produce the copy of the sale agreement. The assessee furnished its reply dated 06.10.2014. In the reply the assessee contended that sale of building to M/s Classi-Mech Equipments Pvt Ltd. vide agreement to sale dated 17.06.2011, the buyer was occupying the same Gala/Building on leave and licence basis approximately from last 18 months and that plant and machinery were already fastened to earth. Besides that assessee also handed over possession of approximately 12,000 sq. ft. of adjoining plot which exclusively used by the said buyer, therefore, taking the advantage of situation, the said building was sold to buyer at a lump-sum price of ₹ 4.25 Crore. Thus, there is reason for difference in sale price with building No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 2,52,65,247/- holding that the assessee has obtained on money to that extent. The ld. Commissioner (Appeals) has not given any other finding except confirming the order of Assessing Officer. 6. We have noted that the Assessing Officer issued notice under section 133(6) only to the buyer of building no.3, who has paid higher price per square feet. No notice under section 133(6) was issued to buyer of building no.10 or any other buyer, those purchased at lower rates. We have noted that the assessee has sold the Gala/Building No.3 10 at higher rate than the stamp value rate. There is no allegation of Assessing Officer that transfer of Gala No.10 has been understated by the assessee. The Assessing Officer on his suspicious about the on money made the addition on the basis of variation of rates between two buyers. The onus was upon the Assessing Officer to prove that the assessee received on money on sale of Gala No.3. The assessee throughout the proceeding contended that the higher rate was negotiated with the purchaser of Gala No.3 because of location and the additional benefit of adjoining open space of 12,000 sq. ft. The Assessing Officer made the addition of differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer has been understated by the assessee or, in other words, the consideration actually received by the assessee is more than is declared or disclosed by him and the burden of proving such an understatement or concealment is on the Revenue. Sub-s. (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him, and there is no concealment or suppression of the consideration. Similar view was taken in CIT Vs Shivakami Co. (P.) Ltd . [1986] 159 ITR 71/25 Taxman 80K (SC) and in CIT v. Godavari Corporation Ltd. [1993] 200 ITR 567/68 Taxman 344 by holding that the burden is on the Revenue to prove under-statement of the consideration. Further, the Hon'ble Kerala High Court in CIT v. M.J. Cherian [1979] 117 ITR 371 has held that the ITO cannot fix higher sales price without any evidence. The mere presumption that the excess price could have been charged has been held to be not a ground for coming to the conclusion that the assessee did charge a higher price. In view of the above factual and legal discussion the assessing officer was not justified in making the addition without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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