TaxTMI 
TaxTMI 
2016 (5) TMI 528
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....nt u/s 69 of the I.T. Act. 2. The appellant craves the right to add, alter or amend any ground of appeal." 2. Brief facts of the case are as under: The appellant filed return of income for the relevant A.Y. 2009-10, on 31.03.2010, declaring income of Rs. 6,36,980/-. The case was selected for scrutiny under CASS and notice u/s 143(2) was issued on 18.08.2010 which was duly served upon the appellant. As per the AIR information, the assessee had purchased a land for the value of Rs. 55,30,000/-, at Road No. 1A, Jaidev Park, Punjabi Bagh, Delhi, measuring 300 sq. yds. During the course of assessment, the assessee was asked to explain the aforesaid transaction. In reply, the assessee submitted before the Assessing Officer that the....
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....ransaction. Before the Ld.CIT(A), it was submitted that the stamp duty was paid by the assessee on the circle rates and the sale consideration was paid as per the agreement to sale & G.P.A. dated 23.10.2001. The assessee submitted that the agreement to sell dated 23. 10.2001 was registered on 27.10.2008. 2.3. Before the Ld.CIT(A), it was submitted that the contention of the Ld.AO, regarding the sale price of the property is totally based on the doubts and suspicion, without any corroborative evidence on record. 2.3 Before the Ld.CIT(A), the assessee submitted that the similar properties were registered by the sub-registrar for Rs. 3,15,000/- in the FY 2005- 06. 2.5 the Ld.CIT(A) observed as under: "I have carefully conside....
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....without conducting any enquiry with the parties to these transactions. These facts only manifests that the addition made by the A.O. u/s 69 of the Act, 1961 merely on the basis of suspicion and not on the basis of facts and evidence of the case. Admittedly, the assessee paid extra stamp duty as determined by the Registration Officials. But that alone is not conclusive or reasonable proof that there was any excess investment. Section 69 is the weapon in the armoury of the Assessing Officer to detect the tax evasion In respect of clandestine Investments made by the assessee & naturally which are not recorded in the books of accounts, if any, maintained by him. Section 69 also gives power to AO to treat the value of investments as the....
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....torily offered. In addition to the same, it may be noted that this is a deeming provision which means that even though the assessee has no real income it may be deemed to be his income. The provision which is deeming is always rebuttable. The use of the words 'if any' in the section indicates that it is not compulsory that the assessee must have maintained the books of accounts. He can prove the genuineness of the investments by some other evidence which proves investment out of disclosed source. The word 'explanation' indicates that the opportunity of being heard must be given to the assessee to prove the nature and source of investments. The use of word 'may' and absence of the word 'shall' in the section i....
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....hat the value determined for the purposes of stamp duty is the actual consideration passed between the parties to the sale. It is worthwhile to mention here that section 69 is a legal fiction whereby investment in an asset is treated as income if it is not disclosed in the regular books .of account. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of section 69. This fiction cannot be extended any further and, therefore, cannot be invoked by the Assessing Officer to tax the difference in the hands of the purchaser. The Hon'ble Andhra Pradesh High Court in the case of Addl. CIT v. P. Durgamma [1987] 166 ITR 776 held that it is not possible to extend the fiction beyond the field legitimat....
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....deration of the land in the instrument, i.e., the sale deed. Accordingly, I hold that the addition made by the Assessing Officer is purely on notional basis, not supported by either facts or a legal basis but only on presumption. In that view of the matter, the addition made under section 69 is directed to be deleted." 3. Aggrieved by the order of the Ld.CIT(A), the revenue is in appeal before us now. 3.1. The Ld.DR submitted that the property in question is located in a prime ADR of Delhi and by no thought of imagination the value of the property even in 2001 could have been Rs. 2,80,000/-. The Ld.DR submitted that the entire consideration has been paid in cash to avoid the transaction from being disclosed to any authority and to kee....