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TMI Blog2023 (12) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... rroborative materials to suggest that there was payment or receipt of money over and above the sale deed. Assessees have registered properties with the registration authorities as applicable valuations for the purpose of registration. In order to make addition as undisclosed income in these cases, the burden is on the revenue to prove that the Assessees herein have invested in any property or sold the property over and above what is in the sale deeds. There is nothing on record to show that the Assessees herein had made any investment or recieved consideration in addition to what has been disclosed in the sale deeds. In our opinion, no addition could be made in the hands of present Assessees on the basis of presumption when the valuation mentioned in the sale deed has been accepted by the registration authorities. No allegation by the ld. AO that there is any stamp duty valuation higher than the value mentioned in the sale deed. Details of buyers or sellers of these immovable properties, as the case may be, were already on record before the ld. AO and the ld. AO had all the powers to make enquiry under the Act from such sellers and buyers, the AO for the reasons best known to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice or any other notice with respect to any adverse interference drawn by the Assessing Officer for making any addition of any nature whatsoever for the year under consideration was ever served upon the assessee and, therefore, the consequential assessment order is illegal and void. 3. That the charging of interest u/s 234A and 234B is illegal, unjustified and ought to be deleted. 3. Since, the Department has filed above captioned appeals against the Orders of the CIT(A) for Assessment Years 2011-12, 2005-06, 2006-07, 2010- 11 on the similar grounds and the additions are emerging out of the very same search and seizure operation carried out u/s 132 of the Income Tax Act, 1961 ( the Act for short) on M/s Satya Prakash Brothers group of cases on 28/10/2010, the above captioned appeals along with the respective 2 Cross Objections have been heard together and decided in a common order. 4. Facts of the issue are that Income Tax Department carried out search and seizure proceedings u/s 132 of the Act, on M/S Satya Prakash Brothers group of cases on 28.10.2010. Thereafter, AO issued notice u/s 153C of the Act to Satya Realtors Pvt. Ltd. for AY 2005-06 to 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 Sale 76,54,339 1,12,54,339 1,12,54,339 Ms. Anju Gupta 2010-11 Purchase 11,49,14,970 66,00,000 45,50,500 11,49,14,970 Ms. Anju Gupta 2010-11 Sale 60,00,000 58,88,624 Ms. Anju Gupta 2011-12 Sale 4,61,67,000 75,00,000 48,50,500 4,61,67,000 Smt. Usha Gupta 2006-07 Purchase 14,09,72,818 1,83,50,000 1,83,50,000 14,09,72,818 M/s. Satya Realtors Pvt. Ltd. 2011-12 Purchase 7,87,79,900 75,00,000 75,00,000 7,87,79,900 6. Aggrieved by the assessment orders, the assessee filed appeal before ld. CIT(A) challenging the additions which have been deleted by CIT(A). As against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has listed out the assumptions made by the AO at Para No. 5.2.1 of his order, as under: a). Every member of the Satya Prakash Brother's Group must have indulged in on-money transactions in respect of every property purchased or sold by them during the relevant period. b) The market values of the properties in Delhi were much higher than the value determined as per prescribed circle rates. c) There is a guaranteed return of 15% in investments in properties. d) The average rate of inflation in India was 8% during the relevant period. e) The market value of the property can be arrived at by taking the value as per circle rate as on 01.01.2012 as base and reducing 15% from the same every year. 8.2 Regarding validity of the assumptions, the ld. A.R. submitted that the ld. CIT(A) held in para No.4.3.1 to 4.3.11 at page No.43-53 and para No.5.2.2 5.2.8 at page Nos.66 70 of his order that: a) AO has not considered that the properties purchased or sold by one member of the M/s. Satya Prakash Brother's Group could be completely different in its location, size, shape, quality of title, nature of ownership (lease hold or freehold), neighborhood, proximi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty under reference that the assessee expended or received any excess amount over and above what is stated in the conveyance deed. j) Relying upon the order of Hon'ble High Court of Delhi in the case of CIT vs. Dinesh Jain HUF (2013) 352 ITR 629, CIT(A) held that the AO cannot take judicial notice of certain information available in the property websites or in the so called reports without there being any specific and positive evidence of cash transaction in the property under reference. Thus, various assumptions made by the AO do not find support of the law. 8.3. With regard to Calculation of FMV without Rejection of books of accounts, the ld. A.R. submitted that the ld. CIT(A) has held that :- a) The A.O. has not rejected the books of account before resorting to estimate the fair market value. b) AO cannot resort to the valuation of fair market value of an immovable property unless he rejects the books of accounts. The CIT (A) has placed reliance upon various judgments i.e., Asst. CIT vs. Dhariya Construction co. (2010) 236 CTR (SC) 226, ITO vs. Arasen Subiah (2009) 20 DTR (Mad) 113, CIT vs. Partap Singh Amro Rajinder Singh (1993) 200 ITR 788 (Raj.), CIT vs. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd do not relate to the year under consideration in which the impugned Assessees bought or sold the properties and that no nexus between that person and the assessee has been established beyond doubt. In such circumstances, the seized material cannot be used against the assessee. d) CIT(A) has referred to the decision of Hon'ble Delhi High Court in the case of CIT v. Lachman Das Bhatia (ITA No. 1731, 1733, 1734/2010), wherein the Hon'ble jurisdictional High Court of Delhi laid down that the search on the assessee did not yield any incriminating material on the basis of which it can be said that the assessee was indulging in under-invoicing or suppression of sales. The documents on which the Assessing Officer has placed reliance, were seized from a different person and not from the assessee and that no nexus between that person and the assessee has been established beyond doubt. Further, the documents upon which the Assessing Officer placed reliance relate to a subsequent period and not to the year under consideration. In such circumstances, it has been held that the seized material cannot be used against the assessee. 8.6. The ld. A.R. submitted that no power bestowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooking bogus expenditure and illegal payments in CWG (common wealth games project). e) The wordings of Section 69 are such that they, in fact, do not permit any assumption of understatement of amount; rather it requires AO to exactly point out the precise amount paid or received. AO is not only required to prove understatement of purchase price, but also to show precise extent of the understatement. There is no authority given by the section to adopt some reasonable yardstick to measure the extent of understatement. f) In the absence of any direct evidence to the effect that the price settled between the parties is anything other than the agreed consideration as appearing on the sale documents or any other instrument, full value of consideration or cost of investment cannot be substituted by the fair market value, except in the case falling within the purview of Sec. 50C and Sec. 56(l)(vi)/(vii), which lays down the statutory fiction that the circle rate of property shall be substituted for the recorded transaction if the former is found to be more than the latter; however, in this case, the consideration as per registered conveyance deeds is invariably higher than valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has no authority or power under the Act to substitute fair market value to the value declared by the assessee in duly registered conveyance deed which in itself is higher than the circle rate notified by the Government. 8.8. The ld. A.R. submitted that complete assessment cannot be disturbed without any nexus with seized material: a) The CIT(A) relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (2015] 61 Taxmann 412 (Delhi) dated 28.08.2015, in which Hon'ble Court held that completed assessment can be interfered with by the Assessing officer while making the assessment under section 153A only on the basis of incriminating material pertaining to the person searched upon unearthed during the course of search or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. b) CIT(A) held that there is no incriminating documents relating to the impugned Assessees which has been unearthed by the department during the search and seizure action. c) Pertinently, the above order in the case of Kabul Chawla (supra) has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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