TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 677
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....3. Briefly, the facts of the case are that the assessee challenged the order of the Assessing Officer in making the addition of Rs. 23,62,500 before the learned Commissioner of Income-tax (Appeals) being unexplained investment under section 69B of the Act. The Assessing Officer in this regard has observed that as per documents at pages 34-35 of annexure A-1 seized from the office premises of M/s. Narain and Co. were confronted to the assessee vide show cause dated February 20, 2013, proposing to adopt the purchase of land at the rate of Rs. 6,50,000 per bigha. The assessee submitted, before the Assessing Officer the following arguments vide his letter dated February 28, 2013 : "This is with reference to your letter dated February 20, 2013, regarding to adopt the rate of land at Rs. 6,50,000 per bigha for the land purchased by the company in the year under assessment. In this regard we submit as under : As regard the justification of pages 34 and 35 of annexure A-9 with regard to the purchase of land by M/s. R. P. Export and Import Pvt. Ltd. his regard it is being submitted that the applicant-company namely M/s. R.....
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....ector or group member on the pages 34 and 35." 4. The Assessing Officer after considering submissions of the appellant observed that as per the seized document referred to above, the agreement was for purchase of land by Sh. Bhola Nath from Sh. Pawan Kumar, Sh.Rajinder Puri and Sh. Ram Murti and the land was ultimately transferred to Sh. Sumit Gupta S/o Sh. Bhola Nath at the rate of Rs. 1,25,000 per bigha whereas the rate of land as per agreement referred to was Rs. 6,50,000 per bigha. The Assessing Officer, therefore proceeded to conclude that the assessee had paid an amount of Rs. 23,62,500 for the purchase of said land leading to an addition thereof under section 69B of the Income-tax Act, 1961. 5. The assessee challenged the addition before the learned Commissioner of Income-tax (Appeals) and the submissions of the assessee are reproduced in the appellate order, which reads as under : "This is an appeal filed by the assessee challenging the addition of Rs. 23,62,500 under section 69B of the Income-tax Act, 1961. The brief facts of the case are that there was search an....
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....arty to the seized/cancelled agreement had not stated anything about any link or connection with the assessee-company or its direc tors nor he had stated having received any payment over and above the consideration ; vii. The assessee had no link or connection or any relation with Sh.Bhola Nath and with Sh. Sumit Gupta, from whom the assessee had purchased the land in question. viii. The Assessing Officer had made the basis of application of rate of purchase of land from Sh. Sumit Gupta in respect of 4 bigha and 10 biswa of land only. The Assessing Officer has accepted the sale consideration as mentioned in the registration deed in respect of land purchased in the same area from Sh. Munish Kumar, Sh. Ram Murti, Sh. Dilbag Rai and Sh. Rajinder Puri and, the area is adjoining the same area and, therefore, the Reliance by the Assessing Officer on the seized/cancelled agreement not relating to the assessee concerned and from whom even no land was purchased and had made the addi tion without any reason or substance. The Assessing Officer has accepted the consideration in respect of the purchases of land from other persons in the same area. ix. The hon'ble Supreme Court in the cas....
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.... of registered sale document, but has not accepted the sale consideration. Thus, the Assessing Officer, disregarded the valid documentary evidence and had undertaken the exercise of rewriting of the sale deed and substituting the sale consideration which he cannot do. h. Similarly, the reliance is being placed on the judgment of the Punjab and Haryana High Court in the case of CIT v. Chandni Buchar [2010] 323 ITR 510 (P&H), in which, it has been held as under : 'Capital gains-Computation-Actual sale consideration vis-a-vis value taken by stamp duty authorities-There is categorical finding recorded by the Commissioner of Income-tax (Appeals) that value adopted or assessed by any authority of the State Government for the purpose of payment of stamp duty in respect of land or building cannot be taken as sale consideration received for the purpose of section 48-Tribunal rightly held that valuation done by any State agency for the purpose of stamp duty would not ipso facto substitute the actual sale consideration as being passed on to the seller by the purchaser in the absence of any admissible evidence-Assessing Officer is obliged to bring on record positive evidence supporting t....
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....n into consideration, while delivering the above judgment, the hon'ble Bench has relied upon the above judgments as well and as such, the very basis and making the addition is faulty.' 4. Reliance is also being placed in the following judgments : (a) ITO v. New P. Grand Resorts I. T. A. No. 526/Chd/2009, Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh. (b) ACIT v. Rupen Kaushal in I. T. A. No. 866/Chd/2009, Income- tax Appellate Tribunal, Bench, Chandigarh Bench, Chandigarh. In view of the above said facts and circumstances, the addition as made by the Assessing Officer deserves to be deleted and oblige." 6. The learned Commissioner of Income-tax (Appeals) considering the submissions of the assessee and material on record deleted the addition. The findings of the learned Commissioner of Income-tax (Appeals) in paragraph 4 of the appellate order are reproduced as under : "4. I have considered the basis of addition made by the Assessing Officer and the arguments of the authorised representative on the issue. The Assessing Officer has relied upon a copy of agreeme....
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....d and the sale consideration in respect of rest of the purchases made in the same area has been accepted as per the registered deed. The reli ance placed by the Assessing Officer on the agreement to sell which is cancelled as on the date of seizure and does not record the property to be purchased or sold, is misplaced and not warranted. The sale consideration as recorded in the registered deed can be substituted by another higher figure only when there is specific evidence direct or circumstantial to contradict the same. The hon'ble apex court in the case of K. P. Varghese [1981] 131 ITR 597 (SC) is directly on the issue. The hon'ble jurisdictional High Court in the case of CIT v. Satinder Kumar [2001] 250 ITR 484 (P&H) has also clearly held that the Assessing Officer was not competent to make addition in absence of credible evidence, in respect of investment made over and above consideration recorded, in the sale deed. The evidence relied upon by the Assessing Officer in the form of agreement to sell, because of various short comings highlighted above, cannot be said to be credible so as to be taken as the basis of substituting the sale consideration as recorded in the reg....