2014 (1) TMI 843

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....he assessee, an individual engaged in the occupation of goldsmith, in his return of income had declared a total income at Rs.79,890/-. The AO, in assessment framed u/s 143(3), found that during the year under consideration the assessee had purchased a property worth Rs.50,34,897/-. The AO treated this impugned investment as unexplained and thereby made an addition of Rs.50,34,897/- u/s 69 of the Act as the assessee had not furnished the source of the said investment. On appeal, the Ld.CIT(A) confirmed the action of the AO. Aggrieved by the impugned order, the assessee has raised this ground in the appeal before us. 2.2 Before us, the Ld. AR of the assessee has stated that the assessee has acquired tenancy right per Agreement dated 09.04.....

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....the promoter Ms. Ramgiri Developers and the assessee clearly indicates that the assessee has been in occupation of the premises admeasuring carpet area 49.23 sq mts. 530 sq.ft. On ground floor and the developer agreed to accommodate the assessee in the new building at floor no. 14 admeasuring 585 sq. ft. carpet area to be constructed upon the said property in consideration of the assessee agreeing to vacate the premises in his possession and surrendering the tenancy rights in respect of the tenanted premises held by him in favour of the developer. This indicates that the flat in Ramgiri Paradise has been acquired by the assessee in lieu of surrender of his tenancy right in the building Moghe Bhavan. The perusal of the agreement dated 09.04.....

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.....2005. 2.4 In view of the aforementioned discussions, we are of the view that the authorities below have done/confirmed the impugned addition without bringing any positive material to hold that the investment in the flat in Ramgiri Paradise is made by the assessee out of his unexplained income. Mere suspicion without evidence on record cannot be basis for making an addition to income u/s 69 of the Act. The addition is, therefore, entirely on a presumptive basis which is purely based on surmises. Thus, the impugned addiction made u/s 69 is deleted. Accordingly, Ground No. 1 is allowed. 3. Ground No.2 relates to the addition of Rs.5,64,500/- made by the AO and the same confirmed by the Ld.CIT(A) to the tune of Rs.5,17,500/- u/s 68 of th....