Tribunal confirms flat value, adds unexplained investment, grants partial relief to assessee.

The Tribunal upheld the CIT(A)'s decision, valuing the flat at Rs. 7,49,970 and sustaining an addition of Rs. 2,00,000 for unexplained investment. The appeal was partly allowed, granting the assessee relief of Rs. 1,49,970.

---

---

Issues Involved:
1. Legitimacy of the addition of Rs. 6,06,000/- under Section 69B of the Income Tax Act for unexplained investment in a residential flat.
2. Validity of the valuation report by the Registered Valuer.
3. Consideration of the assessee's statement under Section 132(4) of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Legitimacy of the Addition of Rs. 6,06,000/- under Section 69B:
The case originated from a search action at the assessee's residence, which revealed a valuation report showing the value of a flat at Rs. 9,67,000/-. The registered sale deed indicated a purchase consideration of Rs. 3,61,000/-, while the Sub-Registrar valued the flat at Rs. 4,79,400/-. The Assessing Officer (AO) concluded that the difference of Rs. 6,06,000/- was unexplained investment under Section 69B. The CIT(A) partially allowed the appeal, reducing the addition to Rs. 3,49,970/-, considering the jantri rate and the assessee's disclosure of Rs. 2,00,000/- for furniture and fixtures.

2. Validity of the Valuation Report by the Registered Valuer:
The assessee argued that the valuation report was irrelevant as it was prepared for obtaining a housing loan, which resulted in a loan of only Rs. 4,00,000/-. The Tribunal noted that the valuation report was dated before the sale deed and could not be taken as evidence for the flat's valuation. The CIT(A) correctly used the jantri rate of Rs. 4,79,400/- for valuation purposes, aligning with Section 50C of the Act.

3. Consideration of the Assessee's Statement under Section 132(4):
The assessee's statement under Section 132(4) included a voluntary surrender of Rs. 2,00,000/- for investment in the flat and renovation. The CIT(A) found that the assessee did not retract this statement and failed to provide evidence for the source of the Rs. 2,00,000/- investment. The Tribunal upheld the CIT(A)'s decision but provided partial relief by considering the assessee's possible savings, thus sustaining an addition of Rs. 2,00,000/- and granting relief of Rs. 1,49,970/-.

Conclusion:
The Tribunal agreed with the CIT(A) on the flat's valuation at Rs. 7,49,970/- but differed on the deduction, allowing for some personal savings. The final addition was sustained at Rs. 2,00,000/-, providing the assessee relief of Rs. 1,49,970/-. The appeal was partly allowed, and the order was pronounced on 5th January 2016.

---