TaxTMI 
TaxTMI 
2015 (11) TMI 1721
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....s that the action of the AO in initiating the proceedings u/s 153A suffers from legal infirmity and therefore the said proceedings require to be quashed. 2. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in rejecting the appellant's plea that the ALV of the vacant flats at Greenfields Complex building should be taken at Rs. Nil. The appellant prays that the ALV of the said property may be taken at Rs. Nil. 3. Without prejudice to Ground no. 2 on the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the action of the AO in assessing the ALV of vacant Flat No. B-4/64 to 67 at Greenfields Complex building at Rs. 5,06,400/- and in assessing income at Rs. 3,34,480/- under the head 'Income from House Property'. The appellant prays that the said addition is unjustified and requires to be upheld. 4. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the addition made by the AO of Rs. 64,60,000/- on account of alleged undisclosed investments in Alibaug land u/s 69B of the Income Tax Act, 1961. The appellant prays that the said addition is unjustified and requires to be dele....
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....ported in [2014] 368 ITR 330. 6. On the other hand, Ld. DR on both the issues i.e. legal as well as on merits, strongly relied upon the order of the CIT(A). 7. We have carefully considered the rival submissions and also perused the relevant finding in the order and also the various Tribunal orders as referred and relied upon by the Ld. Counsel. The assessee had shown Flat Nos. B-4/64, D-4/65, D-4/66 & B- 4/67 at Green Field Complex, Heaven View, 4th Floor, Jogeshwari Vikroli Link Road, Andheri (East), Mumbai -400 093 as 'vacant' and has offered the annual rental value of the flats as per the Municipal ratable value. The AO rejected the assessee's contention without assigning any reason and sought for information from the society of Green Field Complex. In response, the society in its reply, furnished a copy of leave and license agreement of a flat in the same complex showing a monthly rent of Rs. 17,000/- for the financial year 2010-11. The AO after reducing/indexing the average annual rent fees of 10% and applying the same for AY 2006-07, he worked out monthly rent of Rs. 10,550/- for each flat and determined the deemed ALV at Rs. 5,06,400/- in terms of section 23(1)(a). This ac....
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....case that assessee has rented out the property and the rent received or receivable is less but the flat has been lying vacant, thus, it cannot be held that municipal ratable value cannot be the basis for determination of deemed ALV. Accordingly, respectfully following the decisions of the Tribunal and also the principle laid down by the Hon'ble jurisdictional High Court, we decide this issue in favour of the assessee and accordingly, ground no. 2 & 3 are treated as allowed. 9. In view of our finding on merits, the legal issue raised on this addition that it is beyond the scope of section 153A is not adjudicated as same has become purely academic. 10. So far as issue raised with regard to addition of Rs. 64,60,000/- on account of alleged undisclosed income in the light of section 69B, Ld. Counsel, Shri Vijay Mehta submitted that this issue is squarely covered in favour of the assessee by the various decisions of Tribunal in the group concerns of the assessee. He submitted that the addition is based on seized documents found from the office of Jai Corp Group containing various details of land purchase in Alibaugh by the assessee. The said document, as per the AO revealed that total....
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....the rival contentions of the Ld. Representatives of both the parties and have also gone through the record. The Ld. A.R. of the assessee, before us, has submitted that except the seized document, the contents of which have been duly explained by the assessee, no other evidence of any kind was found or seized which would indicate that the assessee had incurred the cost of land in cash as alleged by the Revenue. He has further contended that the words mentioned in the document 'cash required' did not mean that the cash had actually been expended. The allegations leveled by the Revenue regarding the payment of on money have not been corroborated with any reliable or convincing evidence. Even in the statements recorded of Shri Virendra Jain vice chairman of Jai Corporations on 11.05.2009 under section 131 and further affidavit dated 22.12.10 of Shri Atual Pawar, an employee of Jai Corporations, it has been duly explained that the 'Part A' was the amount paid in advance and 'Part B' was the balance towards budgeted cost of development for converting the land from agriculture to non agriculture. He has further submitted that none of the sellers have been examined in the matter to ascerta....
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....ssessee for such financial year." 23. A perusal of the aforementioned section shows that the requirement of the section is that expenditure has been found to have been incurred by an assessee in any financial year. Consequently, the assessee fails to indicate satisfactorily the source of such expenditure or any part thereof. Then section 69C is attracted in such circumstances. The emphasis is on the fact that "an assessee has incurred any expenditure". This itself show that the assessee must have been found to have incurred any expenditure to invoke the provisions of Sec. 69C of the Act. Even if for the sake of arguments, the retraction of Shri Dilip Dherai is ignored, in his reply to question No. 24 on the date of search, Shri Dilip Dherai has categorically mentioned that cash payment from Makers is at Rs. 28.01 crores and cash payment from Jai Towers is at Rs. 10.43 crores, total of these amounts works out at Rs. 38.45 crores which was provided to Shri Dilip Dherai by one Shri Sanjay Punkhia CEO of SEZ Project. Shri Dilip Dherai is not even remotely related to the assessee company .It is also not the case of the Revenue that Dilip Dherai was acting as agent of the assessee comp....
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....n the hands of the assessee cannot be justified as the assessee has not incurred any expenditure. There may be one more possibility that the persons who were doing land purchase might have inflated the sale price in these loose sheets just to extract monies from their higher authorities in the guise of On-Money to be paid to the vendors. May be because of his possibility no documents were found to show that the money actually changed hands. 25. A perusal of the balance sheet of the assessee show that the authorized, issued and subscribed paid up capital is at Rs. One lakh and the assessee had not done any business during the year under consideration. With such a small corpus and no business activity, nor any has been brought on record by the Revenue, it is not acceptable that the company may have incurred such huge expenditure outside its books of account. Further in his entire assessment order, the AO himself has pointed out time and again different persons, who are alleged, to have made cash payments. Even on that count, the additions cannot be sustained in the hands of the assessee. In our considerate view, there being no evidence to support the Revenue's case that a huge figu....
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...., jewellery or other valuable article and the AO finds that the amount expended on making of such investments or in acquiring such bullion jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income and the assessee offers no explanation about such excess amount or the explanation offered by the assessee is not satisfactory, the excess amount may be deemed to be the income of the assessee for that relevant year. So, the first requirement for the invocation of provisions of section 69B of the Act is that the amount must be expended by the assessee and which is found in excess than that is recorded in the books of the account and the assessee does not give any explanation about such excess amount. In the case in hand, except the loose papers as discussed above, no evidence was found that the assessee had incurred expenditure on the purchase of land more than that was recorded in the books of account. The Ld. A.R. of the assessee has vehemently contended that the consideration recorded in the sale agreements was much more than the value adopted by the Stamp Duty Authorities. There was no evi....