TMI Blog2003 (8) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... icer who valued the property at Rs. 22,97,200. The AO treated the difference of Rs. 8,97,200 as investment from undisclosed sources and made the addition under s. 69 of the IT Act. 2.2. The assessee carried the matter to the CIT(A) and submitted that the amount of consideration related to the property purchased for Rs. 14 lacs was evidenced by the registered sale deed and the provisions of s. 69 had been wrongly applied because there was absolutely no provision in the IT Act for making any addition to the assessee's income simply because the fair market value of the property was more than the consideration mentioned in the deed. It was pointed out that s. 52 of the IT Act had since been deleted, but even when s. 52 was in operation, the Supreme Court had made it clear in the case of K.P. Verghese vs. ITO Anr. (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 (SC) that s. 52 could not be invoked simply because the fair market value of the property happened to be more than as mentioned in the deed and after applying s. 52, the Department was required to prove that the actual consideration was more than that mentioned in the deed. It was further stated that there was no material or evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation about the nature and source of the investment or the explanation offered by him was not satisfactory. According to him, in the present case, the AO had presumed an investment merely because the valuation officer gave a different figure for the actual consideration paid by the assessee on the purchase of the property and there was no provision under the law to justify such an action. He further stated that s. 69 of the Act is a deeming provision and for considering a deemed income, the investment which has to be the basis for this purpose cannot also be deemed to have been made, and it must be actual. According to him since the decision of the AO was just conjectural, the same could not be upheld. He, therefore, deleted the addition of Rs. 8,97,200. 2.4. Before us, the learned Departmental Representative strongly supported the order of the AO and vehemently argued that the AO was justified in referring the case to the Valuation Officer to estimate the correct price of the property purchased by the assessee and since the value determined by the DVO was higher than that disclosed by the assessee, therefore, the AO was justified in making the addition. The reliance was pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land at Rs. 6,78,685. He, therefore, prayed that the order of the CIT(A) should not be disturbed on this issue. He also placed reliance on the following case laws: (1) Dr. Arjun D. Bharad vs. ITO (2003) 78 TTJ (Nag) 832 : (2002) 83 ITD 774 (Nag) (2) M. Selvaraj vs. ITO (2002) 258 ITR 82 (Chennai)(AT) The learned counsel for the assessee has also placed his reliance on the case laws referred to by the learned CIT(A) during the first appellate proceedings. 2.6. We have heard both the parties at length and carefully gone through the material available on the record. In the instant case, it is not in dispute that the property in question purchased by the assessee was a built house and not constructed by the assessee. It is also true that the property was constructed by the seller in a period related to the asst. yr. 1990-91 and the value of the said property was accepted by the Department at Rs. 9,90,323. Admittedly, the assessee purchased the property on 15th May, 1993, and the AO had not brought out any material on record to substantiate that any modification or addition had been made by the seller in the said property during the period ranging from 1990-91 to 15th M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property, who determined the same at Rs. 11,71,000. The AO considered the difference of Rs. 2,21,000 as income of the assessee from undisclosed sources and made the addition under s. 69 of the IT Act. 3.2 The learned CIT(A) deleted the addition by observing that no receipt can be taxed merely because the DVO held the view that the consideration received while selling the property would have been more than that shown in the registration deed. According to him, only the real income which has been received or accrued or arisen or was deemed to be received or accrued or arisen could only be taxed. Accordingly, the addition of Rs. 2,21,000 was deleted. 3.3. Before us, the learned Departmental Representative supported the order of the AO. 3.4. In his rival submissions, the learned counsel for the assessee submitted that the amount of Rs. 9,50,000 actually received by the assessee was duly evidenced by registered sale deed and since there was a sale of the property and not the investment in the property, the provisions of s. 69 of the Act were not applicable. Therefore, the AO was not justified in making the addition under s. 69 of the IT Act. It was further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) rightly deleted the same. 4. The last issue relates to the deletion of addition of Rs. 11,000 on account of low household withdrawals. 4.1. The AO during the assessment proceedings noticed that the assessee had shown total withdrawals of Rs. 85,000 for household expenses while in the preceding year, the withdrawal shown was at Rs. 87,000. According to him, there was no change in the constitution of the family of the assessee and if approved cost inflation index over the earlier years had to be applied than the assessee ought to have shown the withdrawal at Rs. 96,193 - (Rs. 87,000 x 244/223) as against Rs. 85,000. He, therefore, estimated the household expenses at Rs. 96,000 and made the addition of Rs. 11,000. 4.2. The learned CIT(A) deleted the addition by stating that the withdrawals shown were quite adequate and there was absolutely no material to come to the conclusion that there was more expenditure incurred by the assessee than the amount disclosed. Accordingly, the addition of Rs. 11,000 was also deleted. 4.3. We have heard both the parties on this issue. In the instant case, it appears that the AO made the addition merely on the basis of surmis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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