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TMI Blog2015 (4) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... n detected or brought on record by the Revenue. 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 under section 69B of the Act are not warranted. - Decided in favour of assessee. Estimation of Annual Letting Value (ALV) of the vacant flats at Central Garden Complex - Held that:- ALV be computed as per the municipal rateable value as deemed income from house property. See case of Shri Anil Kashiprasad Murarka vs. ACIT [2014 (12) TMI 1304 - ITAT MUMBAI] - ITA Nos.2707, 2708 & 2709/M/2013 - - - Dated:- 17-4-2015 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by : Shri Vijay Mehta, A.R. Revenue by : Ms. S. Padmaja, D.R. O R D E R Per Sanjay Garg, Judicial Member: The above titled three appeals relevant to assessment years 2006-07, 2007-08 2009-10 have been preferred by the assessee against the three different orders of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as the CIT(A)] all dated 16.01.2013. Since the facts and the issue involved therein are identical in nature, hence the same are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore made the addition of the said amount into the income of the assessee under section 69B of the Act. Aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A). 4. The Ld. CIT(A) also did not agree with the contentions/explanations given by the assessee in relation to the figures mentioned in Part B of the impounded documents. He therefore upheld the additions made by the AO in this respect. Aggrieved by the order of the Ld. CIT(A), the assessee has come in appeal before us. 5. We have heard the rival contentions of the Ld. Representatives of both the parties and have also gone through the record. The Ld. A.R. of the assessee, before us, has submitted that except the seized document, the contents of which have been duly explained by the assessee, no other evidence of any kind was found or seized which would indicate that the assessee had incurred the cost of land in cash as alleged by the Revenue. He has further contended that the words mentioned in the document cash required did not mean that the cash had actually been expended. The allegations levelled by the Revenue regarding the payment of on money have not been corroborated with any rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The entire dispute revolves around the alleged cash payment amounting to ₹ 43 crores approx. and which has been added u/s. 69C of the Act. Sec. 69C of the Act reads as under: Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the AO, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. 23. A perusal of the aforementioned section shows that the requirement of the section is that an expenditure has been found to have been incurred by an assessee in any financial year. Consequently, the assessee fails to indicate satisfactorily the source of such expenditure or any part thereof. Then section 69C is attracted in such circumstances. The emphasis is on the fact that an assessee has incurred any expenditure . This itself show that the assessee must have been found to have incurred any expenditure to invoke the provisions of Sec. 69C of the Act. Even if for the sake of arguments, the retraction of Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of land at different villages brought on record to show that an amount other than the payment of consideration has exchanged hands. No confession from the sellers have been brought on record. The entire additions have been made merely on the strength of loose papers found during the course of the search not supported by any independent authority. Considering the entire addition, in the light of the provisions of Sec. 69C, as per A.O s own interpretation, investments in purchase of land have been fully financed by some other persons, therefore, the addition in the hands of the assessee cannot be justified as the assessee has not incurred any expenditure. There may be one more possibility that the persons who were doing land purchase might have inflated the sale price in these loose sheets just to extract monies from their higher authorities in the guise of On-Money to be paid to the vendors. May be because of his possibility no documents were found to show that the money actually changed hands. 25. A perusal of the balance sheet of the assessee show that the authorized, issued and subscribed paid up capital is at Rs. One lakh and the assessee had not done any business duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sellers had been examined to substantiate the claim of the Revenue that the extra cash had actually changed hands. The Tribunal, after considering the evidences in relation to the additions in the light of provisions of section 69C of the Act, has held that no additions were warranted under section 69C of the Act in the hands of the assessee. We find that in the case of the assessee, the additions have been made by the lower authorities under section 69B of the Act which provides that where the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article and the AO finds that the amount expended on making of such investments or in acquiring such bullion jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income and the assessee offers no explanation about such excess amount or the explanation offered by the assessee is not satisfactory, the excess amount may be deemed to be the income of the assessee for that relevant year. So, the first requirement for the invocation of provisions of section 69B of the Act is that the amount must be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al: Ground No. 1: On the facts and circumstances of the case and in law, the Hon'ble CIT (A) erred in confirming the addition made by the AO of ₹ 12,87,350/- on account of alleged undisclosed investments in Jovan land u/s. 69B of the Income Tax Act, 1961. The appellant prays that the said addition is unjustified requires to be deleted. Ground No. 2: On the facts and circumstances of the case and in law, the Hon'ble CIT (A) erred in not admitting the additional ground raised by the appellant. Ground No. 3: On the facts and circumstances of the case and in law, the Hon'ble CIT (A) erred in rejecting the appellant's plea that the ALV of the vacant flats at Central Garden complex should be taken at Rs. Nil. The appellant prays that the ALV of the said property may be taken at Rs.Nil. Ground No. 4: Without prejudice to Ground no. 3, on the facts and circumstances of the case and in law, the Hon'ble CIT (A) erred in confirming the action of the AO in assessing the ALV of vacant residential flats at Central Garden Complex building at ₹ 1,54,83,852/- and in assessing income at ₹ 1,08,38,696/- under the head 'I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided on 17.12.2014. We have gone through the said decision. The relevant finding of the Tribunal has been given in para 5 of the said order, which for the sake of convenience is reproduced as under: We have considered rival contentions and found that the issue is covered by the decision of the Hon'ble Bombay High Court in the case of Smt. Smitaben N. Ambani Vs. CWT, reported in (2010) 323 ITR 104 (Born), wherein it was held that the basis on which a self-occupied property is valued under rule 1BB of the Wealth-tax Rules and municipal ratable value is arrived at under the municipal law is the same i.e. a reasonable amount of rent that can be expected by the owner from a hypothetical tenant . That while arriving at such reasonable amount of rent that can be expected by the owner from a hypothetical tenant, the amount of statutory deduction, if any, permissible under the local municipal law must be added to the ratable value. Thus, the Hon'ble High Court held that while applying the provisions of rule 1BB for valuing the self-occupied property, municipal rateable value with addition of statutory deductions, if any, may be adopted instead of standard rent, for arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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