2015 (4) TMI 1218 - AT - Income Tax

Tribunal allows appeals for multiple years, emphasizes corroborative evidence, deletes additions under Sections 69B and 69C.

The Tribunal partly allowed the appeals for A.Y. 2006-07, 2007-08, and 2009-10, with deletions of significant additions under Section 69B and adjustments ... Invocation of provisions of section 69B - expenditure on the purchase of land more than that was recorded in the books of account - addition on entries in the loose paper found during the search action - Held that:- There was no evidence that any extra cash other than the sale consideration as recorded in the deed had changed hands. No statement of the sellers of the land had been recorded. No other corroborative evidence has been produced on the file by the Revenue Authorities to substantiate their allegation. The addition in this case has been made on the basis of the entries in the loose paper found during the search action, which at the most can be considered to have raised a suspicion about the transfer of money other than the sale consideration, but the suspicion itself and solely cannot be held to be a justifiable ground for making the additions, especially in the absence of any corroborative evidence. Except the loose papers in question no evidence, what to say of any direct or corroborative evidence, even no circumstantial evidence has been 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] Issues Involved:1. Legality of proceedings initiated under Section 153A of the Income Tax Act, 1961.2. Addition of Rs. 79,98,925/- on account of alleged undisclosed investments under Section 69B for A.Y. 2006-07.3. Addition of Rs. 12,87,350/- on account of alleged undisclosed investments under Section 69B for A.Y. 2009-10.4. Estimation of Annual Letting Value (ALV) of vacant flats at Central Garden Complex.Issue-wise Detailed Analysis:1. Legality of Proceedings under Section 153A:- The assessee initially contested the initiation of proceedings under Section 153A but later did not press this ground. Consequently, this ground was dismissed as not pressed.2. Addition of Rs. 79,98,925/- for A.Y. 2006-07:- Facts: A search and seizure action revealed documents indicating bifurcation of land purchase consideration into Part A (stamp duty value) and Part B (alleged unaccounted cash payments). The AO added Rs. 79,98,925/- as unaccounted payments under Section 69B.- Contentions: The assessee argued that Part B represented budgeted costs for land development, not unaccounted payments. No corroborative evidence of cash payments was found, and no sellers were examined to confirm cash transactions.- Tribunal's Findings: The Tribunal relied on precedents, particularly the case of 'M/s. Avkash Land Realty Pvt. Ltd. and others Vs. DCIT,' where similar additions were deleted due to lack of evidence beyond loose papers. The Tribunal concluded that suspicion alone, without corroborative evidence, is insufficient for additions under Section 69B. Thus, the addition of Rs. 79,98,925/- was deleted.3. Addition of Rs. 12,87,350/- for A.Y. 2009-10:- Facts: Similar to the 2006-07 assessment, the AO added Rs. 12,87,350/- for alleged undisclosed investments in land.- Tribunal's Findings: Following the same reasoning as in the 2006-07 assessment, the Tribunal deleted the addition, emphasizing the lack of corroborative evidence and reliance solely on loose papers.4. Estimation of Annual Letting Value (ALV) of Vacant Flats:- Facts: The AO assessed the ALV of 20 vacant flats at Rs. 1,54,83,852/- based on market value, while the assessee offered ALV as per the municipal rateable value at Rs. 8,473/-.- Contentions: The assessee argued that since the flats were vacant, the ALV should be based on municipal rateable value. The Tribunal was referred to the decision in 'Shri Anil Kashiprasad Murarka vs. ACIT,' which supported using municipal rateable value for vacant properties.- Tribunal's Findings: The Tribunal directed that the ALV be computed as per the municipal rateable value, as upheld in the cited case, thereby aligning with the assessee's contention.Additional Grounds for A.Y. 2009-10:- Ground No. 2: The CIT(A) did not admit an additional ground raised by the appellant.- Ground No. 3 & 4: Related to ALV of vacant flats, already addressed above.- Ground No. 5: Pertained to the computation of total income and losses under Section 14 and 74 of the Act, respectively. This ground was not pressed by the assessee and was dismissed accordingly.Conclusion:- The appeals for A.Y. 2006-07, 2007-08, and 2009-10 were partly allowed, with significant deletions of additions under Section 69B and adjustments in ALV computation based on municipal rateable value. The Tribunal emphasized the necessity of corroborative evidence for additions under Sections 69B and 69C, dismissing reliance solely on loose papers.Order Pronouncement:- The order was pronounced in the open court on 17.04.2015.