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TMI Blog2018 (7) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Art and M/s. IQCP India Pvt. Ltd., the tenants of the property that whatever furniture and fixtures exist in the property it is their own and not provided by the Vendor, has to be believed. The statement of the vendor has been denied by the Assessee in his statement. In such circumstances, the claim of the Vendor, which is the only basis of the impugned addition, cannot be believed. There are no other circumstances, which can compel us to take a view different from the view taken by the CIT(A). Consequently, Gr.No.3 raised by the Revenue is dismissed. Cash over and above the sale consideration stated in the registered document has been denied - Held that:- The basis on which the impugned addition was made by the AO and sustained by the CIT(A) is the statement of the Vendor and the circumstance that the value of the property as per the Registering Authorities for the purpose of stamp duty and registration was much higher than the value stated in the sale deed and therefore there was a probability of the statement of the Vendor being true and further circumstance that the Vendor has offered the sum in question as income in her return of income filed for the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him and in the course of such examination confronted the statement of the Vendor to the Assessee. The Assessee denied having paid any consideration over and above the sum of ₹ 3,80,00,000/- which is the consideration for transfer as recited in the registered sale deed. 4. The AO, however, refused to believe the statement of the Assessee and preferred to accept the statement of the Vendor because the value of the property for the purpose of stamp duty and registration was ₹ 4,48,00,000 and therefore it was highly probable that the claim of the Vendor that she received a sum of ₹ 5,13,52,800 was highly probable and therefore the difference between the value as shown in the registered document and the value adopted by the registrar of assurances for the purpose of registration and stamp duty viz., a sum of ₹ 68,00,000 (Rs.4,48,00,000 3,80,00,000) should be added as unexplained investment in purchase of the property u/s.69 of the Act. The AO accordingly added a sum of ₹ 68,00,000/- to the total income of the Assessee. 5. Apart from the above, the AO also noticed that the Vendor has claimed that a sum of ₹ 65,52,800/- had been paid by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurity deposit for the lease. The Assessee thus submitted that only a sum of ₹ 30 lacs was security deposit payable to the tenants and not ₹ 53,00.000/- (Rs.25 lacs + ₹ 28 lacs) as claimed by the Vendor. The Assessee submitted that since no actual investment was made by the Assessee but merely acknowledged liability to return security deposit to the tenants, no addition u/s.69 of the Act can be made as the condition precedent for invoking those provisions are that the Assessee should have made an investment in the sense there ought to have been an outflow of funds from the Assessee, which condition is not fulfilled in the present case. 8. As far as the sum of ₹ 15 lacs claimed to have been paid in cash is concerned, the Assessee pointed out that except the statement of the Vendor there is no other basis on which the AO can conclude that the Assessee paid ₹ 15 lacs over and above the sale consideration of ₹ 3,80,00,000/- which is the consideration paid for acquiring the property as per the registered sale deed. The Assessee denied having paid any sum over and above what is stated in the registered document. The Assessee contended that the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount received of ₹ 65,52,800/- towards furniture and fixtures which has been offered as short term capital gains by Smt. P. Venkatalakshmi solely based on her statement without affording any opportunity for cross examination has to be examined. During the appellate proceedings the appellant could prove that the statement given by the seller is totally not reliable in the absence of the any cogent evidences to substantiate. Now I go by the fact that the cause of action has been originated from the appellant by paying stamp duty at 1% and proceed in examining the other aspects. During the appellate proceedings though the appellant through his AR has denied of having paid cash of ₹ 15 lakhs, and also paid towards furniture and fixtures of ₹ 65,52,800/-, in view of the fact that the guidance value of the property worked out based on the 1% stamp duty paid for registration, the total unexplained investment of the appellant in the said property could be treated to the extent of the difference of the amount stated to be paid and the guidance value which works out to be ₹ 68,00,000/- over and above the amount paid towards furniture and fixtures of ₹ 52,30, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by the Vendor in the property. A confirmation to the above effect regarding non-existence of furniture and fixtures in the property from the tenants that the furniture and fixtures existing in the lease property belongs to them and not to the vendor was also filed. It was also pointed out that in the lease deeds also there is no reference to existence of any furniture or fixtures. 13. The CIT(A) accepted the plea of the Assessee and deleted the addition made by the AO for the reason that the existence of furniture and fittings has not been proved. The following were the relevant observations of the CIT(A) in this regard. 6.4 As regards the consideration paid towards furniture and fixtures of ₹ 65,52,800/- the appellant submitted that the fixtures and fittings have been added by the tenants themselves and hence did not form part of the value of the property purchased. To substantiate his claim a copy of the Sale Deed dated 27/02/2012 by which the property was purchased by the appellant from the seller has been furnished wherein the furniture and fittings valued at ₹ 65,52,800/- had not been shown as part of the property sold. Further, the appellant has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 10 lacs and ₹ 20 lacs has been acknowledged as security deposit for the lease by M/s. Stone Art and M/s. IQCP India Pvt. Ltd, the two tenants of the property, acknowledged as security deposit paid to the vendor which the Assessee was to acknowledge as security deposit for the lease. Thus only a sum of ₹ 30 lacs was security deposit payable to the tenants and not ₹ 53,00.000/- (Rs.25 lacs + ₹ 28 lacs) as claimed by the Vendor. Since no actual investment was made by the Assessee but he merely acknowledged liability to return security deposit to the tenants, no addition u/s.69 of the Act can be made as the condition precedent for invoking those provisions are that the Assessee should have made an investment in the sense there ought to have been an outflow of funds from the Assessee, which condition is not fulfilled in the present case. The CIT(A) was therefore correct in deleting the addition made by the AO. We find no ground to interfere with the order of the CIT(A) and hence ground No.2 raised by the Revenue is dismissed. 17. As far as Gr.No.3 raised by the revenue is concerned, the learned DR submitted that the statement of the Vendor should b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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