2015 (7) TMI 1253 - AT - Income Tax

Estimation of Annual Letting Value (ALV) of the vacant flats at Central Garden Complex - Held that - As decided in case of father of the assessee Sh. Anand jain 2015 (4) TMI 1218 - ITAT MUMBAI as directed that the ALV be computed as per the municipal rateable value as deemed income from house property. Addition u/s 69B - addition on the basis of loose paper found in search - expenditure on the purchase of land more than that was recorded in the books of account - Held that - As held by the Tribunal in the case of Anand Jain (supra) and as also in the cases of another group companies (supra), that the said loose paper 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 justifiable ground for making the additions, especially in the absence of any corroborative evidence. Except the loose papers in question no evidence, what to say of any direct or corroborative evidence, even no circumstantial evidence has been detected or brought on record by the Revenue. More over the explanation given by the assessee has been straightaway rejected by the AO. Hence, the additions solely on the basis of suspicion, how strong it may be, in our view, are not sustainable in the eyes of law. Additions in this case also under section 69B of the Act are not warranted

Summary

Issues Involved:

1. Admission of additional ground by the CIT(A).
2. Estimation of Annual Letting Value (ALV) of vacant flats.
3. Assessment of income under "Income from House Property".
4. Addition of investment in Pawna land under section 69B of the Income Tax Act, 1961.

Detailed Analysis:

Ground No. 1: Admission of Additional Ground by CIT(A)

The assessee did not press ground No. 1 of the appeal, and thus, it was dismissed.

Ground Nos. 2 & 3: Estimation of Annual Letting Value (ALV) of Vacant Flats

The assessee argued that the ALV of the vacant flats in the Central Garden Complex should be taken as Rs. Nil. The CIT(A) confirmed the AO's estimation of the ALV at Rs. 1,71,94,824/- and assessed income under "Income from House Property" at Rs. 1,20,36,377/-. The assessee compared the case to that of his father, where the Tribunal had directed the ALV to be computed as per the municipal rateable value. The Tribunal found the facts of the present case identical to the earlier decision and directed that the ALV be computed as per the municipal rateable value.

Ground No. 4: Addition of Investment in Pawna Land Under Section 69B

The AO added Rs. 2,46,69,000/- to the income of the assessee under section 69B, citing unaccounted cash payments for land purchases. The CIT(A) upheld this addition. The assessee contended that the Part B payments were for obtaining necessary approvals and not for land purchase. The Tribunal noted that no evidence other than the seized documents indicated unaccounted payments. The Tribunal referenced prior decisions involving related parties and similar circumstances, where additions were deleted due to lack of corroborative evidence. The Tribunal found that the addition was based on suspicion and not supported by substantial evidence. Consequently, the Tribunal ordered the deletion of the addition under section 69B.

Conclusion:

The appeal was partly allowed. The Tribunal directed the ALV to be computed as per the municipal rateable value and deleted the addition under section 69B due to lack of corroborative evidence.