TaxTMI 
TaxTMI 
2015 (7) TMI 732
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....urvey no. 731 Makarba. It emerges out from the record that Smt. Shantaben V. Swadia and Shri Rajesh V. Swadia (hereinafter referred to as Swadia) had purchased a piece of land comprising in survey no. 731 Makarba measuring 5160 meter. This land was purchased by Swadia on 30th December, 1997 for a sale consideration of Rs. 3,50,000/-. Swadias entered into an agreement with the assessee for sale of this land on 21st January, 2003 for a consideration of Rs. 7,15,000/-. The sale deed was ultimately executed and assessee became owner and in possession of this land by virtue of the sale deed executed on 21st January, 2013. The ld. Assessing Officer found that Ahmedabad Mercantile Co-operative Bank (AMCO) had sanctioned a loan of Rs. 205 lacs to M/s. Akar Organizer and M/s. Ranjit Ele. Pvt. Ltd. This property was mortgaged with the bank. Before sale of this property, a sum of Rs. 65 lacs was deposited by the vendors in order to get the property released from the bank. It also emerges out that the vendors have earlier tried to sell this property but the bank had obtained an injunction order from the Gujarat State Co-operative Tribunal because a dispute for recovery of outstanding loan amou....
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....bsp; amco-738-2010-11 &n....
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.... As per this account there is a maximum debit balance of Rs. 37,27,725/- as on 27/3/2001. As on 1/2/2003 the loan has been repaid by this party by making the credit entry, of Rs. 1,53,469/-. As on 1/2/2003, the closing balance is shown at Rs. nil. The bank has also given the bank statement of the account number 066016332000153 for the period 1/1/2001 to 22/1/2003 in the case of Ranjit Electric Private Limited. As per this account the maximum balance of Rs. 10,37,060/- has been paid by the party on 22/1/2003 when the closing balance as per the account is shown at nil. 3.4 From the above mentioned facts it is clear that the loan sanctioned to Akar Organisers and Ranjit Electric Private Limited by the Ahmedabad Mercantile Co-Operative Bank Ltd was Rs. 205 Lacs. As per the bank statement of Akar Organisers the loan of Rs. 66 Lacs approximately was outstanding in the month of September 2002. As on 22/1/2003 the debit balance in the account is Rs. 55 Lacs. The debit balance in the account of Ranjit Electric Private Limited as on 31/1/2003 is approximately Rs. 1.50 Lacs' and the debit balance as on 30/1/2003 is Rs. 11.43 lakhs approximately. It can be seen from these two bank state....
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.... transactions on the presumption that cash is also paid over and above the cheque amount. For making any addition, the AO has to establish that there has been some evidence in his possession which indicates that the assessee has made payments over and above what has been shown in his books of accounts. In my view, in the absence of such evidence, no addition under section 69B of the Income Tax Act can be made even in that case, if Swadias had mortgaged the land with the bank for rupees 65 Lacs. 3.6 Further, as stated by the AR, the said plot of land was purchased by Swadias in December 1997 for Rs. 3,50,000/- which was sold by them to the appellant in January 2003 for Rs. 7,15,000/- . In the absence of any evidence contrary to this fact, there cannot be more than 100 percent return in five years particularly when the land prices in Ahmedabad went down substantially as a result of earthquake in 2000-2001. 7. In view of the above mentioned discussion, I have no hesitation in deleting the addition of Rs. 57,85,000/- made by the AO as unaccounted investment under section 69B of the Income Tax Act." 5. At this stage, we deem it appropriate to make reference of section 69B of th....
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....sed on the basis of loan liability discharged by the vendor. This type of evidence possessed by the Assessing Officer is of not such a nature, which empowers him to invoke section 69B of the Act. 7. The ld. Assessing Officer has assumed that assessee has made unexplained investment in purchasing the property. However, he failed to make reference of any evidence which demonstrate that assessee has made unexplained investment. The assumption of the Assessing Officer is based on the fact that vendors have discharged their loan liability meaning thereby they would have not sold the property below the liability they have discharged. To our mind, this is a far fetched inference. The Ld. First Appellate Authority has analyzed the bank statement and inferred that loan taken by the vendors was of Rs. 205 lacs, they have mortgaged other properties also. They have paid other amounts also. The position of the loan in their loan account has been discussed in para 3.3 of the ld. Commissioner of Income Tax (Appeals)'s order extracted (supra). According to the Commissioner of Income Tax (Appeals), there are many debit entries and also credit entries in this account. The maximum debit balance of....