AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 1162
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....r ["AY"] 2013-14, the assessee has filed this appeal on following ground: "That the Ld. CIT(A) erred in sustaining addition of Rs. 18,82,500/- on account of alleged unexplained investment in purchase of agriculture land u/s 69C." 2. The sole grievance of assessee is such that the Ld. AO has made an addition of Rs. 18,82,500/- u/s 69C on account of alleged unexplained investment in purchase of agricultural land without any authority of law. 3. On perusal of assessment-order, it is observed that the Ld. AO has made addition by observing as under: "5. Unexplained expenditure u/s 69C 5.1 It is seen from the Profit and Loss account of the assessee that the assessee has shown Purchase of Property (Agricultural Lan....
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.... - Held yes" 5.3 Hence the undisclosed expenditure amounting to Rs. 18,82,500/- is treated as the deemed income of the assessee. The said amount is added to the total income of the assessee and is charged to tax u/s 69C of the Income Tax Act 1961." 4. During first-appeal, Ld. CIT(A) has dealt with this issue as under: "4.1 Ground of appeal No.1:- Vide this ground of appeal the appellant has challenged the addition of Rs.18,82,500/- u/s 143(3) by invoking the provision of section 69C of the IT Act. The appellant has argued that action of the Assessing Officer by treating of Rs.18,80,500/- as unexplained investment on account of purchase of agricultural land is arbitrary and wrong in the eyes of law. 4.2....
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....income. The stamp valuation of the property reflected in the registered deed is most valid document. Hence, I am inclined to concur with the findings of the Assessing Officer in his assessment order. In view of the above I hereby confirm the addition of Rs.18,82,500/- made u/s 69C of the IT act. Therefore, this ground of appeal is dismissed." 5. During hearing before us, Ld. AR representing the assessee assailed the orders of lower authorities. Ld. AR submitted that the assessee purchased the impugned property for Rs. 49,89,500/-, whose value assessed by Stamps Authority was Rs. 68,70,000/- and the Ld. AO has made addition of Rs. 18,82,500/-, which is basically the difference of "actual purchase price" and the "value adopted by the stamp....
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....a clear pointer to indicate that the valuation of stamps authority does not represent a fair value: "11. Thus, there may be various factors, which are required to be considered for determining the market value of the land. The market value of the land depends upon the location of the land; area of the land; whether the land is in a developed area or not; whether the acquisition is of a small plot of land or a big chunk of land and number of other advantageous and disadvantageous factors are required to be considered. Therefore, there cannot be the same market value for the different lands while determining the compensation for the lands acquired under the Land Acquisition Act. Therefore, the rates mentioned in the Ready Reckoner, w....
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....made by stamps authority". We observe that except this, there is no evidence or basis available to the lower authorities for making this addition. On a careful reading of section 69C, we observe that the said section empowers the assessing authority to make addition where unexplained expenditure is found but then the unexplained expenditure has to be real and not notional. Had there been any evidence in the possession of revenue authorities which could establish that the assessee has actually expended a sum of Rs. 68,70,000/- on purchase of the property, the authorities would have been within power to treat the difference as income of assessee but this is not so in present case. The authorities do not have any evidence whatsoever by which i....