9911796707
TMI Blog2012 (7) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... square yard as purchase cost of land by the assessee - appeal of the Assessee is partly allowed. - ITA No.1406/Hyd/2010 - - - Dated:- 10-2-2012 - Chandra Poojari, Asha Vijayaraghavan, JJ. For Appellant: Shri A V Raghuram For Respondent: Shri D D Goyal ORDER Per: Asha Vijayaraghavan: This appeal preferred by the assessee is directed against the order passed by the CIT(A)-VII, Hyderabad dated 10.9.2010 and pertains to the assessment year 2007-08. 2. In this appeal by the Assessee the first ground regarding the validity of the Assessment made u/s 153C has not been pressed. Hence the first ground is dismissed as not pressed. 3. The next issue on appeal is against the CIT(A) confirming the addition of Rs. 130,62,000/- as unexplained investment u/s 69B 4. Brief facts of the case are that the Assessee company had purchased two pieces of land measuring Ac.3.00 guntas and Ac. 3.37 guntas at Gandiguda Village, Shamshabad Mandal, Ranga Reddy Dist. From Sri.Y.Parthasarathy and Smt. Varalaxmi respectively. It was explained that Sri Y.Parthasarathy was paid Rs 20,00,000/- for Ac. 3 guntas and Smt. Varalaxmi was paid Rs 22,50,000 to Ac. 3.37 guntas. It is also submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reddy District has also been found. This sale deed has striking similarities with the sale deeds discussed earlier but shows that land admeasuring Ac. 6.22 guntas is purchased for a total sale consideration of Rs 1,63,75,000/. It is in respect of land at the same village, in the same survey numbers and has been represented by the same general manager P. Rajesh Kumar Jain. The only difference is the sale deed has been made on 30.6.2006 and the purchase has been made @ Rs 25,00,000 per Acre. 7. The company M/s Bhagyanagar Metals Ltd is having its office at the same place i.e. 2nd Floor, Surya Towers, S.P. Road, Secunderabad and belongs to the same group of companies. In the circumstances stated above it was seen that the sale deeds entered by the company @ Rs 5,71,000 per Acre appears to be prima facie grossly under valued and the explanation of the assessee was called in this regard. It was explained by the assessee that land admeasuring Ac. 3.00 guntas is on the rear side and land admeasuring Ac. 3.37 guntas is far away from the National Highway 7. It was also stated that lands bought by the company were on a rough terrain with uneven path. Further it was explained that to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration for the two land. The AO worked out the sale consideration as Rs 75,00,000 and Rs 98,12,500 for the two lands purchased by the company as against the amount of Rs 20,00,000 and Rs 22,50,000 recorded in books of accounts. The total amount of excess investment of Rs 1,30,62,000 was brought to tax as per the provisions of section 69B of the Act as unexplained investment. 11. On appeal before the CIT(A), the Assessee contended that the Assessing Officer has wrongly relied upon the purchase cost of the land by M/s Bhagyanagar metals Ltd who have bought the land of Ac. 6.22 guntas @ Rs 25,00,000 per acre. It is also contended that M/s Bhagyanagar Metals ltd had bought the land on 30.6.2006 whereas the assessee company had bought two pieces of land which are explained in the preceding Paras on 19.6.2006 which is a few days before m/s Bhagyanagar Metals Ltd had bought. Since it was a boom period, the price of the land was escalated on day to day basis. Therefore the land purchased by M/s Bhagyanagar Metals Ltd from Sri Madhu Venkateshwar was costlier. Hence the same price cannot be equated with the land prices paid by the assessee firm. Further it is argued that the AO had no evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time gap between the purchase of land by the appellant company and M.s Bhagyanagar metals Ltd is not a big time gap since the sale deeds got signed by the appellant company on 19.6.2006 whereas M/s Bhagyanagar Metals Ltd on 30.6.2006 which has been occurred even before the appellant company s signature on sale deed could dry up. Therefore taking the facts and circumstances of the case, the AO is justified to compute the purchase consideration of the property of Ac. 3.00 guntas at Rs. 75,00,000 and the purchase consideration of Ac. 3.37 guntas at Rs. 98,12,500 against the admitted cost. Accordingly, Rs 1,30,62,000 added by the AO towards unexplained investment u/s 69B of the IT Act is confirmed. Therefore, all three grounds of appeals are dismissed. 14. Aggrieved the Assessee is on appeal before us. 15. We heard both the parties and perused the materials available on record. We have also gone through the records submitted by the learned counsel for the assessee. The learned counsel for the assessee Shri A.V. Raghuram produced copies of the documents through which the land purchased has been plotted and sold to various persons. Index to the said documents filed, itself lists ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the said index and the documents produced by AR, plots were sold by various parties in the above cases admeasuring 240 square yards each, at the rate of Rs.150 per square yard. That being so, assessee could not have purchased the land in question at a rate less than Rs.150 per square yard, and therefore, the purchase price disclosed by the assessee of Rs.44,50,000 for the total extent of 6 acres and 37 guntas, as it is, cannot be accepted, as it works out to less than the price at which plots of 240 square yards each have been sold by various parties in above documents. Considering totality of facts and circumstances of the case, therefore, we are of the opinion that the sale price of the plots of Rs.150 per square yard would clearly indicate the price at which the property could have been purchased, as it is natural that no businessman would sell at a price lesser than the purchase price thereby incurring a loss. Hence, we direct the Assessing Officer to adopt the rate of Rs.150 per square yard as purchase cost of land by the assessee and arrive at the cost price at which the assessee bought which worked out at Rs.7.26 lakhs per acre and totally around Rs.50.28 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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