2022 (11) TMI 589 - AT - Income Tax

Unexplained investment in property u/s 69 r.w.s 115 BBE - difference in sale consideration mentioned in the MOU and sale consideration mentioned in the sale deed - HELD THAT - As it is not the case where during the course of search the assessee has been found to have made any investment but it is a case that as a result of documents found and impounded at the time of survey on M/s Boss Gears Ltd. the impugned addition has been made. Also an undeniable fact that the seller has admitted to have received Rs.9.47 crores as against Rs.18.22crores alleged by the AO. Therefore, the burden is squarely upon the revenue to prove that the actual transaction was of Rs.18.22 crores, which it has grossly failed to establish, and most importantly, assessment order of the seller M/s Boss Gears Ltd., mentioned elsewhere clearly demonstrates that the sale consideration in the case of the seller has been accepted and by any stretch of imagination it cannot be accepted that the Assessing Officer of M/s Boss Gears Ltd. was unaware of the fact that survey operation was conducted at its premises during the financial year relevant to the Assessment Year considered by him while framing the said assessment order. We, therefore direct the Assessing Officer to delete the impugned addition - The grounds argued before us are allowed.

Summary

Issues:
Addition of unexplained investment in property under section 69 r.w.s 115 BBE of the Income-tax Act, 1961 for A.Y. 2016-17.

Detailed Analysis:

1. The appeal was against the order of the ld. CIT(A) regarding the addition of Rs. 8,75,31,250/- as unexplained investment in property under section 69 r.w.s 115 BBE of the Income-tax Act, 1961 for A.Y. 2016-17.

2. The impugned addition was based on the difference between the purchase consideration mentioned in the MOU and the sale consideration mentioned in the sale deed for a land transaction.

3. During a survey operation, documents were impounded that revealed discrepancies in the purchase consideration declared by the assessee for the land transaction.

4. The Assessing Officer was not convinced with the explanations provided by the assessee regarding the difference in purchase consideration and made the addition based on the MOU and sale deed values.

5. The assessee contended that the higher purchase price in the MOU was due to assurances from the seller regarding the land's status, which were not fulfilled, and the actual purchase price was lower.

6. The Tribunal noted that the revenue failed to establish that the assessee made an investment of the higher amount alleged and that the seller's assessment order accepted the sale consideration at the lower amount.

7. Referring to similar case laws, the Tribunal emphasized the need for corroborative evidence to support additions based on discrepancies in transaction values.

8. Considering the facts and the seller's admission of receiving the lower sale consideration, the Tribunal directed the Assessing Officer to delete the impugned addition.

9. The Tribunal allowed the appeal of the assessee, emphasizing the revenue's failure to prove the higher transaction value and the acceptance of the lower sale consideration in the seller's assessment order.

This detailed analysis provides a comprehensive overview of the judgment, addressing the issues involved and the Tribunal's reasoning in reaching its decision.