TaxTMI 
TaxTMI 
2009 (9) TMI 676
X X X X Extracts X X X X
X X X X Extracts X X X X
....ha group of cases. On the basis of documents found during the course of search and the statement recorded, various additions were made by the Assessing Officer which mainly relate to gifts received by the assessee during the years under consideration, investment on account of purchase of various properties and the cash found during the course of search etc. While framing assessment under section 153A, the Assessing Officer observed that as per the documents found, the assessee and his minor children were in receipt of gifts from various friends viz., Shri Naresh Jain and Shri Anil Jain. These persons appeared before the Assessing Officer and their statements were recorded under section 131. The addition was also made on account of alleged unexplained investment in purchase of various properties like property No. 49, Rama Road, New Delhi which was purchased for Rs. 24,45,000 wherein assessee was in receipt of income of Rs. 3 lakhs per annum. The Assessing Officer observed that assessee has made heavy investment in income yielding assets and that rental income generated by those assets was disproportionately high when compared with the investment shown to have been made in them. As p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onus lies on the department to prove that some consideration over and above the consideration stated in the sale deed have been invested and that no addition can be made on presumption and suspicions. 4. By the impugned order, the CIT(A) observed that the Assessing Officer has proceeded on the plea that annual rent yield on this property was very high as compared to the normal return of investment, accordingly applying the rent capitalization method, the Assessing Officer has arrived at the fair market value. As per CIT(A), such valuation depends upon various factors that are ruling in the market at the time of giving rent or purchasing property. He further observed that it is not possible to adduce evidence in respect of exchange of money and merely on the basis of stamp duty valuation authority, one cannot conclude that the rates adopted by them are reflecting the true value in the open market. Without referring to the specific reason or justification, the CIT(A) held that in his opinion the valuation of the property can reasonably be taken at a rate which was higher than the value disclosed by the assessee. Accordingly, part relief was given by the CIT(A). Both the assessee a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....] 200 ITR 567. The Division Bench of Hon'ble Delhi High Court in CIT v. Ashok Khetrapal [2007] 294 ITR 143 observed that by referring to the report of valuation officer in the absence of any incriminating documents found in the course of a search no addition could be made by treating investment as undisclosed on the basis of any DVO's report. The decision in CIT v. Manoj Jain [2006] 287 ITR 285 (Delhi) is also to the same effect. In CIT v. Shivakami Co. (P.) Ltd. [1986] 159 ITR 71 (SC), their Lordships have once again retreated that onus whether the assessee had received more consideration than what was stated in the documents of transfer, rested on the revenue and in the absence of that burden having been being discharged, it would be legally impermissible to make any inferences against the assessee. 6. In view of the above discussion, we do not find any merit in the addition made by the Assessing Officer under the head 'Unexplained investment' on account of various properties purchased by the assessee during the block period on the basis of fair market value as estimated by the Assessing Officer. All these additions are directed to be deleted. 7. The ground taken by the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lood relations and childhood friends. That too only on an important occasions. Mostly these gifts are prevalent among relations and they are reciprocal in nature. Most of these gifts are in kind and cash gifts do exists but they are in small denomination. Seldom we see huge sums of lakh of rupees as gifts especially to minors. In this case the appellant has clarified that he has not given gifts to any of these persons earlier or in subsequent period. Hence the concept of reciprocation is totally lacking in the instant case. It is argued that out of indebtedness to Sh. Dinesh Jain's father the gifts were given. But no further details were produced how these two donors were indebted to family of the appellant. Further the financial capacity to give lakh of rupees also lacking in this case. Mere fact that the amounts were routed through bank account does not ipso facto proves the credibility of the donors beyond doubt. To give lakh of rupees as gifts to neighbours the person should have been worth crores of rupees having income of substantial nature. No such confirmations are forthcoming to establish the financial soundness of these two donors. Another fact to be seen here is neither ....