AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 824
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....reinafter referred to as "the property") under a registered sale deed dated 27.2.2012 from one Smt. P. Venkatalakshmi (hereinafter referred to as the 'Vendor' or 'Venkatalakshmi'). The sale consideration paid by the Assessee to the vendor as per the sale deed was Rs. 3,80,00,000/-. The Registrar of Assurances valued the property for the purpose of payment of stamp duty and registration at a sum of Rs. 4,48,00,000/-. In view of such huge variation in the value of the property as per the sale deed and for the purpose of stamp duty and registration, the AO wanted to verify as to what was the real consideration paid for transfer of the property. The AO therefore issued summons to the Vendor u/s.131 of the Income Tax Act, 1961 (Act). In her statement recorded u/s.131 of the Act, the Vendor submitted that she received a sum of Rs. 4,84,00,000 for transfer of the property. The break-up of the sum of Rs. 4,84,00,000/- as given by the Vendor was as follows:- 3. The AO issued summons u/s.131 of the Act for examination of the Assessee and examined him and in the course of such examination confronted the statement of the Vendor to the Assessee. The Assessee denied having paid any considerat....
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....ible for return of security deposit at the time of termination of the tenancy. 7. The Assessee pointed out before CIT(Appeals) that as far as the sum of Rs. 25,00,000/- being security deposit in respect of tenancy with M/s. Stone Arts is concerned, the Assessee and M/s. Stone Arts after purchase of the property by the Assessee have entered into lease deed dated 1.9.2012. In the said lease deed there is a reference to the security deposit of only Rs. 10 lacs which was paid by M/s. Stone Arts to the Vendor by two cheques for Rs. 5 lacs each dated 15.7.2009 and 15.11.2009 respectively. The Assessee as lessor agreed and acknowledged receipt of a sum of Rs. 10 lacs as security deposit and nothing more. So also in the case of M/s. IQPC India Pvt.Ltd., a lease deed dated 1.10.2014 was entered into between them and the Assessee after the purchase of the property by the Assessee and a sum of Rs. 20 lacs was acknowledged as security deposit paid to the vendor which the Assessee was to acknowledge as security deposit for the lease. The Assessee thus submitted that only a sum of Rs. 30 lacs was security deposit payable to the tenants and not Rs. 53,00.000/- (Rs.25 lacs + Rs. 28 lacs) as cla....
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....the facts and in the circumstances of the case, the CIT(A) was justified in deleting the addition made by the AO without appreciating that the fact that the addition of Rs. 53 Lakhs was amount received by way of adjustments and the seller of the property has declared this amount as sale consideration received in her return of income. Further, the CIT(A) ought to have taken note of the fact that deposit amounts are only Rs. 40 Lakhs and as such Rs. 13 Lakhs is not explained and should have been upheld." 10. As far as the addition of Rs. 15 lacs on account of cash payment over and above the actual sale consideration of Rs. 3.8 crores as recorded in the registered document, the CIT(A) did not accept the stand of the Assessee and confirmed the addition made by the AO for the following reason:- "6.3 However the question of taxing the remaining amount of Rs. 15 lakhs cash stated to be received by the seller and the amount received of Rs. 65,52,800/- towards furniture and fixtures which has been offered as short term capital gains by Smt. P. Venkatalakshmi solely based on her statement without affording any opportunity for cross examination has to be examined. During the appel....
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....tituting alleged payment in cash by the Appellant as part consideration towards purchase of an immovable property. 3. The Appellant prays that on the facts and circumstances of the case as already explained in his appeal before the learned Commissioner of Income-tax (Appeals)-5, Bengaluru, the addition of Rs. 15,00,000 made by the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals)-5, Bengaluru may kindly be to be deleted. 4. For these and such other grounds as the appellant may urge at the hearing, it is prayed that the appeal be allowed." 12. As far as payment of Rs. 65,52,800/- as payment for furniture and fixtures in the property which is over and above the sale consideration of Rs. 3,80,00,000/- stated in the registered document, the Assessee submitted that there was no such furniture or fixtures worth the sum stated by the Vendor in the property. A confirmation to the above effect regarding non-existence of furniture and fixtures in the property from the tenants that the furniture and fixtures existing in the lease property belongs to them and not to the vendor was also filed. It was also pointed out that in the lease deeds also there....
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....enue in their respective appeals. 16. As far as ground No.2 raised by the Revenue is concerned, the learned DR submitted that evidence for repayment of security deposit of Rs. 30 lacs (wrongly mentioned as Rs. 40 lacs in the order of CIT(A) and the grounds of appeal) by the Assessee to the tenants of the property alone was available and the CIT(A) ought to have confirmed the remaining sum of Rs. 23 lacs (Rs.53 lacs - Rs. 30 lacs). We are of the view that there is no evidence for a sum of Rs. 53 lacs having been paid as deposit by the Vendor to the tenants of the property, except the statement of the Vendor. The statement of the Vendor cannot be believed in view of the documentary evidence in the form of lease deed between the Assessee and the tenants after the transfer of the property in favour of the Assessee wherein only a sum of Rs. 10 lacs and Rs. 20 lacs has been acknowledged as security deposit for the lease by M/s. Stone Art and M/s. IQCP India Pvt. Ltd, the two tenants of the property, acknowledged as security deposit paid to the vendor which the Assessee was to acknowledge as security deposit for the lease. Thus only a sum of Rs. 30 lacs was security deposit payable to ....
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....urt in the case of Prl.CIT Vs. Vivek Prahaladbhai Patel (2016) 66 taxmann.com 41 (Gujarat) wherein the Hon'ble Allahabad High Court on identical set of facts held that addition cannot be sustained. The following were the relevant observations of the Hon'ble Allahabad High Court in this regard:- "8. For the reasons stated hereinabove, this court is in complete agreement with the findings recorded by the Tribunal upon appreciation of the evidence on record and finds no reason to take a different view. In the opinion of this court, having regard to the evidence which has come on record, which reveals that there is an agreement to sell executed between the Assessee and sellers, which shows the price of the plots of land in question to be much higher figure than the documented price and the fact that the sellers have stated that they have received higher amounts by way of on-money and have also shown receipt of such amount in their income-tax returns, the circumstances do raise a suspicion. However, as held by the Supreme Court in CIT Vs. Daulatram Rawatmull (1964) 53 ITR 574, even if circumstances raise a suspicion, suspicion cannot take the place of evidence." 19. The abov....