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TMI Blog2015 (7) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the basis of loan liability discharged by the vendor. This type of evidence possessed by the Assessing Officer is of not such a nature, which empowers him to invoke section 69B of the Act. Assessee failed to make reference of any evidence which demonstrate that assessee has made unexplained investment. The assumption of the Assessing Officer is based on the fact that vendors have discharged their loan liability meaning thereby they would have not sold the property below the liability they have discharged. To our mind, this is a far fetched inference. The Ld. First Appellate Authority has analyzed the bank statement and inferred that loan taken by the vendors was of ₹ 205 lacs, they have mortgaged other properties also. They have paid other amounts also. there is no direct co-relation between the discharge of loan liability vis-à-vis sale of this plot. The only connection between the bank and this property was that it was under mortgage. Vendors have got it released from the bank and it is sold to the assessee. No addition against higher capital gain has been made in the hands of the vendors. It is for the vendors to explain the source of what amount which they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s out that the vendors have earlier tried to sell this property but the bank had obtained an injunction order from the Gujarat State Co-operative Tribunal because a dispute for recovery of outstanding loan amount was pending before the Board of Nominee bearing arbitration case no. 1317/2000. The vendors have paid ₹ 65 lacs to the bank and get released the property. The Assessing Officer harboured a belief that assessee must have paid unaccounted money to the vendors which was ultimately deposited in bank and got released the land. He further formed an opinion that bank sanctioned loan against the mortgage of the immovable property up to 80% of its value. Therefore, he construed that assessee must have paid a sum of ₹ 57,85,000/- over and above the consideration stated in the sale deed. He made an addition of this amount in the income of the assessee. 4. On appeal, ld. Commissioner of Income Tax (Appeals) has deleted the addition. The ld. first appellate authority has analyzed a letter written by Assistant General Manager of the AMCO and also the bank statement. It is worth to make reference of the finding recorded by ld. first appellate authority. 3.2 From the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been repaid by the party Akar Organisers on 31/3/2005 when the credit balance in this account for the first time is appearing at ₹ 80,701.96. Similarly the copy of the bank statement of Ranjit Electric Private Limited was furnished by Ahmedabad Mercantile Co- Operative Bank Ltd in respect of the account number 066016331000153 for the period 1/1/2001 to 29/3//2005. As per this account there is a maximum debit balance of ₹ 37,27,725/- as on 27/3/2001. As on 1/2/2003 the loan has been repaid by this party by making the credit entry, of ₹ 1,53,469/-. As on 1/2/2003, the closing balance is shown at Rs. nil. The bank has also given the bank statement of the account number 066016332000153 for the period 1/1/2001 to 22/1/2003 in the case of Ranjit Electric Private Limited. As per this account the maximum balance of ₹ 10,37,060/- has been paid by the party on 22/1/2003 when the closing balance as per the account is shown at nil. 3.4 From the above mentioned facts it is clear that the loan sanctioned to Akar Organisers and Ranjit Electric Private Limited by the Ahmedabad Mercantile Co-Operative Bank Ltd was ₹ 205 Lacs. As per the bank statement of Akar Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted investments is not explained by the assessee, then only, the addition under section 69B can be made. In the present case, there is no evidence whatsoever which even remotely says that the appellant has made investment over and above the amount of ₹ 7,15,000/-. It is possible that in the land transactions, there is some element of on money over and above the cheque amount. But the AO cannot make addition of on money in all the cases of land transactions on the presumption that cash is also paid over and above the cheque amount. For making any addition, the AO has to establish that there has been some evidence in his possession which indicates that the assessee has made payments over and above what has been shown in his books of accounts. In my view, in the absence of such evidence, no addition under section 69B of the Income Tax Act can be made even in that case, if Swadias had mortgaged the land with the bank for rupees 65 Lacs. 3.6 Further, as stated by the AR, the said plot of land was purchased by Swadias in December 1997 for ₹ 3,50,000/- which was sold by them to the appellant in January 2003 for ₹ 7,15,000/- . In the absence of any evidence co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment exceeding the amount recorded in the books. This is a crucial question, which demonstrates factual position. It is to be proved with the help of evidence available on record. According to the assesee, he was made investment in purchase of plot equivalent to the one disclosed in the sale deed. It is the Assessing Officer who is disputing and harbouring a belief that the assessee has made investments, over and above, the amount so disclosed in the sale deed. His belief is based on the basis of loan liability discharged by the vendor. This type of evidence possessed by the Assessing Officer is of not such a nature, which empowers him to invoke section 69B of the Act. 7. The ld. Assessing Officer has assumed that assessee has made unexplained investment in purchasing the property. However, he failed to make reference of any evidence which demonstrate that assessee has made unexplained investment. The assumption of the Assessing Officer is based on the fact that vendors have discharged their loan liability meaning thereby they would have not sold the property below the liability they have discharged. To our mind, this is a far fetched inference. The Ld. First Appellate Author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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