2015 (9) TMI 739 - AT - Income Tax

Addition invoking section 69B - unaccounted investment - CIT(A) deleted the addition - Held that - Assessing Officer did not have any clinching evidence to suggest that the assessee has paid any consideration for purchase of property over and above the stated consideration. The reference made by the Assessing Officer to the value determined by the stamp valuation authority for the purposes of payment of stamp duty cannot be taken as an evidence to demonstrate that assessee has actually paid any consideration over and above the stated consideration. The reference by the Assessing Officer to valuation contemplated by the lender i. E. HDFC Ltd. is also of no consequence vis- -vis the controversy before us, in as much as the valuation by HDFC Ltd. is for its own purpose of examining the feasibility of lending money to the assessee for acquisition of the said property. Furthermore, a valuation report, by its very nature, is only an estimation of value, and, at best can be a source for further enquiries but the valuation report by itself cannot be construed as an evidence which establishes understatement of purchase consideration. DVO s estimation of fair market value cannot be accepted as a conclusive evidence for establishing that any additional consideration over and above the stated consideration has passed between a buyer and seller. See Commissioner of Income-tax Versus Dinesh Jain HUF 2012 (10) TMI 158 - DELHI HIGH COURT and CIT vs. Berry Plastics P. Ltd. 2013 (8) TMI 9 - GUJARAT HIGH COURT . In so far as limb of the Assessing Officer s stand relating to the 55 Nos. car parking slots is concerned, we find that the assessee had clarified before the Assessing Officer also that parking slots were purchased as additional amenity in terms of the purchase deed itself and no separate consideration has been paid for the same. The aforesaid plea of the assessee is found to be in tune with the contents of the purchase agreement dated 24/3/2009, copy of which has also been placed before us in the Paper Book. Therefore, we find no error on the part of CIT(A) in negating the aforesaid stand of the Assessing Officer. Amar Kumari Surana (1996 (5) TMI 36 - RAJASTHAN High Court) does not apply to the facts of the present case. - Decided against revenue.

Summary

Issues:
- Whether the CIT(A) erred in deleting the addition made by the Assessing Officer under section 69B of the Income Tax Act?

Analysis:

Issue 1: Addition under section 69B of the Act
- The Revenue appealed against the CIT(A)'s order deleting the addition of Rs. 9,39,61,200 made under section 69B of the Act.
- The Assessing Officer invoked section 69B due to an alleged undervaluation of property purchased by the assessee.
- The Revenue contended that the purchase consideration was understated, leading to the addition.
- The assessee argued that there was no undervaluation and no evidence of additional consideration paid beyond the stated amount.
- The Assessing Officer based the addition on factors like stamp valuation, loan valuation, and parking slots not included in the purchase agreement.
- The Revenue relied on circumstantial evidence and a judgment to support the addition under section 69B.
- The crux of the issue was whether the Assessing Officer had sufficient evidence to prove understatement of consideration.
- The burden of proof lies on the Revenue to establish understatement or concealment under section 69B.
- The Assessing Officer lacked conclusive evidence to show additional consideration paid by the assessee.
- Valuation reports and stamp valuation authority's figures were not sufficient to prove undervaluation.
- The CIT(A) rightly negated the Assessing Officer's stand on the undervaluation of the property.
- The Revenue's reliance on a judgment was misplaced as it did not align with the facts of the present case.
- The decision affirmed the CIT(A)'s conclusion, dismissing the Revenue's appeal against the addition under section 69B.

This detailed analysis provides a comprehensive overview of the legal judgment, highlighting the key arguments, evidence, and conclusions related to the addition under section 69B of the Income Tax Act.