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TMI Blog2021 (10) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... chase deed as undisclosed investment. For making an addition the requirement is that the assessee should have incurred expenditure, offers no explanation about the source of such expenditure and the explanation offered by him is not satisfactory in the opinion of the Assessing Officer. Section 69C can be invoked only when there is evidence of unexplained expenditure. AO has made the addition on account of undisclosed receipts. The appellant's real estate project is still in progress and no land had been sold for the period under consideration and clearly this is not a case of undisclosed receipts. For the assessment year under consideration there was no statute in the Income Tax Act for taxing the purchase consideration paid by assessee if it is less than the guideline value. As held that additions made on account of alleged undisclosed investment for purchase of land on account of the purchase consideration paid being less than the guideline value cannot be sustained. - Decided in favour of assessee. - IT(SS)A No.148/Ind/2017 (Assessment Year 2012-13) - - - Dated:- 23-8-2021 - HON BLE RAJPAL YADAV, VICE PRESIDENT AND HON BLE MANISH BORAD, ACCOUNTANT MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased land at various places in Indore at higher prices but in the registered deed actual amount paid by them is not disclosed. Accordingly, addition of ₹ 5,93,51,700/- was made and income assessed at ₹ 5,93,47,271/-. 3. Aggrieved assessee preferred an appeal before the Ld. CIT(A) and succeeded, as Ld. CIT(A) deleted the addition on observing that additions were made merely on the basis of statement of the sellers which were neither provided to the assessee nor opportunity of cross examination was given and further Ld. Assessing Officer has not brought any evidence on record to show that appellant had paid any amount over and above the amount mentioned in the sale deed. 4. Aggrieved revenue is in appeal before this Tribunal. Ld. DR vehemently argued referring to the detailed finding of the Ld. Assessing Officer including various documents referred in the assessment order itself. 5. Per contra Ld. Counsel for the assessee heavily relied on the finding of Ld. CIT(A) and the decisions referred therein and again asserted that no on money was paid by the assessee. 6. We have heard rival contentions and perused the records placed before us. The revenue is aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer are not pertaining to the appellant and cannot be the basis for making the addition without any other corroborative evidence on record. 3.4 The Assessing Officer has relied upon the statement of Shri Sanjay Sharma which has been made part of the assessment order at para 9.7. Shri Sanjay Sharma had stated in the statement recorded vi] s 131 on 21/09/2012 that he along with his family members had sold land to Shri Mukesh Jhaveri. The registry of land was done at ₹ 1,11,00,000/ - whereas the actual sale consideration was ₹ 4,75,00,000/ -. The appellant has now placed on record statement of Shri Sanjay Sharma duly notarized stating that he had given the statement to the Income Tax Department under threat and coercion and no on money has been received by him. Here the pertinent point also is that the appellant did not have any transaction with Shri Sanjay Sharma and the Assessing Officer did not verify whether such persons declared the aforesaid higher price paid for the purchase of property by Shri Mukesh Jhaveri than shown in the sale deed in their individual Income Tax returns. 3.4.1 The Assessing Officer has also relied on the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted out the following points regarding the statement of Shri Rajesh Sule which has been made part of the assessment order:- (i) The statement has been recorded on oath but the name of the income Tax official administering the oath is not stated. (ii) The statement is not signed by any Income Tax official. (iii) There is no date mentioned on the statement. (iv) Shri Rajesh Sule has admitted to receipt of cash which has been deposited by him in Punjab National Bank in the account in joint name with his brother Shri Subhash Sule. However, there is nothing on record to show that Department has taken any action to tax the said amount. 3.5 The decision of Hon'ble Supreme Court in the case of CIT vs. P.V. assessee vide a registered sale deed purchased certain land, for a sum of ₹ 4.10 lakhs. Subsequent to the purchase of land, certain notes on 100 ::' ~ sheets allegedly written by him were found and seized by the revenue durin a search operation. When confronted, the assessee contended that he could not remember as to why the notings had been made. But the vendor, in his statements, admitted that he had in fact received a total consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) --- In this case it was held that once there is a violation of the principles of natural justice inasmuch as seized material is not provided to an assessee nor is cross-examination of the person on whose statement the Assessing Officer relies upon, granted, then, such deficiencies would amount to a denial of opportunity and, consequently, would be fatal to the proceedings. 3.6 The Assessing Officer has relied upon the statements of the sellers of properties but has not verified whether such persons have declared the aforesaid higher price than shown in the sale deed in their individual Income Tax returns. The decision of Hon'ble Kerala High Court in P.M. Aboobacker (2014) 363 ITR 447 is relevant where in it was held as under:- The Assessing Officer, for the assessment year 2006-07, include ₹ 54,20,000 as undisclosed investment of the assessee, the owner of a shopping complex. This was based on information obtained during search and seizure operations at the residence of N. N. Had given a statement under section 132(4) of the Income - tax Act, 1961, stating that he sold the property for ₹ 78,20,000 to the assessee. In an affidavit, he indicated that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was a case in which the Revenue had to prove the existence of the fact that undervaluation was made by the assessee and that the assessee had paid more amounts for purchase of property amounting to ₹ 54,20,000. When that fact was proved, the burden shifted to the assessee to prove otherwise. He had an opportunity to cross- examine the witness and there was nothing on record to indicate that the witness had spoken false story. Therefore, even in the absence of any other material produced by the Revenue , the uncontroverted evidence of N was in favor of coming to a finding that the assessee had not declared the actual investment made for acquiring the building. 3.6.1 The Hon'ble Gujarat High Court in case of ACIT vs. Govind Bhai N Patel (2013) 33taxmann.com 237, has held that without any corroborative evidence no addition can be made as under:- From the above, it could be seen that primarily the Assessing Officer had made additions on two basis - firstly, that some of the lands in the village were sold at a higher price, and that in the present case, sellers had given statements to the Assessing Officer of having received higher sale consideration. Both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the statements of the sellers of the land which have neither been provided to the appellant nor opportunity of cross examining the sellers giving to the appellant. The Assessing Officer has not brought any evidence on record to show that the appellant had paid any amount over and above the amount mentioned in the sales deed. 4. The Assessing Officer during the assessment proceeding had given a show cause notice dated 31/07/2014 in which it was proposed to add the difference between the guideline value and the purchase price mentioned in the purchase deed as undisclosed investment xx] s 69C (Para 9.2 of the assessment order). For making an addition ix] s 69C the requirement is that the assessee should have incurred expenditure, offers no explanation about the source of such expenditure and the explanation offered by him is not satisfactory in the opinion of the Assessing Officer. Section 69C can be invoked only when there is evidence of unexplained expenditure. 4.1 In the final discussion the Assessing Officer has made the addition on account of undisclosed receipts. The appellant's real estate project is still in progress and no land had been sold for the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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