Shri Rajiv Chaurasia, New Delhi V. DCIT, New Delhi

CO 242/DEL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1436 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NANDITA KANCHAN
• Keywords: Unexplained investment; Search and seizure; Cost of acquisition; Fair market value; Valuation report
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM ITA NO.1729/DEL/2012 ASSESSMENT YEAR : 2006-07 DCIT, CENTRAL CIRCLE-08, NEW DELHI. VS. RAJIV CHAURASIA, 575, 1 ST FLOOR, DOUBLE STOREY FLAT, NEW RAJENDRA NAGAR, NEW DELHI 110 060. PAN: AFVPC0105J CO NO.242/DEL/2012 (ITA NO.1729/DEL/2012) ASSESSMENT YEAR : 2006-07 RAJIV CHAURASIA, 575, 1 ST FLOOR, DOUBLE STOREY FLAT, NEW RAJENDRA NAGAR, NEW DELHI 110 060. PAN: AFVPC0105J VS. DCIT, CENTRAL CIRCLE-08, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, CA DEPARTMENT BY : SMT. NANDITA KANCHAN, CIT, DR ITA NO.1729/DEL/2012 CO NO.242/DEL/2012 2 DATE OF HEARING : 06.10.2015 DATE OF PRONOUNCEMENT : 07.10.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE CIT(A ) ON 2.2.2012 IN RELATION TO THE ASSESSMENT YEAR 2006-07. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THIS AP PEAL IS AGAINST THE DELETION OF ADDITION OF RS.5,59,66,000/- MADE BY TH E AO U/S 69B OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) ON THE BASIS OF THE VALUATION REPORT OF THE DISTRICT VALUATION OFFI CER (DVO). 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE A SSESSEE BELONGS TO CHAURASIA GROUP. A SEARCH AND SEIZURE OPERATION U/ S 132 OF THE ACT WAS CONDUCTED AT THE BUSINESS/RESIDENTIAL PREMISES OF T HE ASSESSEE ON 29.4.2008. A NOTICE U/S 153C READ WITH SECTION 153 A WAS ISSUED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS CALLED UPON TO FURNISH DETAILS OF ALL IMMOVEABLE PROPERTIE S PURCHASED/SOLD DURING THE YEAR. VIDE LETTER DATED 22.11.2010, THE ASSESSEE SUBMITTED ITA NO.1729/DEL/2012 CO NO.242/DEL/2012 3 THAT HE ACQUIRED OWNERSHIP RIGHTS IN THE COMMERCIAL PROPERTY NO. 210, OKHLA, PHASE III, NEW DELHI FOR A SUM OF RS.3,50,00 ,000/- AND INCURRED EXPENSES ON STAMP DUTY AND OTHER EXPENSES, BRINGIN G THE TOTAL COST OF SUCH PROPERTY AT RS.3,76,75,000/-. THE AO MADE A R EFERENCE TO THE DEPARTMENTAL VALUATION OFFICER (DVO) FOR DETERMININ G THE FAIR MARKET VALUE OF THIS PROPERTY. THE DVO ASSESSED THE VALUE AT RS.8,99,66,000/- AS AGAINST THE DECLARED COST PRICE AT RS.3,50,00,00 0/-. ON BEING CALLED UPON TO EXPLAIN THE DIFFERENCE BETWEEN THE TWO, THE ASSESSEE SUBMITTED THAT THE ESTIMATE OF FAIR MARKET VALUE OF THE PROPE RTY BY THE DVO WAS NOT PROPER. UNCONVINCED WITH THE ASSESSEES SUBMISS IONS, THE AO MADE ADDITION OF RS.5,49,66,000/- (RS.8,99,66,000 MINUS RS.3,50,00,000/-). THE LD. CIT(A) DELETED THE ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FAC T THAT THE PROPERTY PURCHASED BY THE ASSESSEE FOR A SUM OF RS.3.50 CROR E ALONG WITH OTHER EXPENSES INCURRED WAS PROPERLY REFLECTED BY THE ASS ESSEE IN HIS BOOKS OF ACCOUNT. THE ONLY DISPUTE IS ON AN ADDITION OF RS. 5,49,66,000/-, BEING ITA NO.1729/DEL/2012 CO NO.242/DEL/2012 4 THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF THE PROPERTY AS DETERMINED BY THE DVO AND THE PURCHASE COST AS PER AGREEMENT TO SELL. IT IS IMPORTANT TO MENTION THAT APART FROM THE DEPA RTMENTAL VALUATION OFFICERS REPORT, THERE IS NO OTHER MATERIAL TO IND ICATE THAT THE ASSESSEE HAD, IN FACT, INVESTED MORE AMOUNT THAN THE DECLARE D CONSIDERATION DESPITE THERE BEING A SEARCH ACTION CARRIED OUT AGA INST THE ASSESSEE. HERE IS A CASE IN WHICH THE ASSESSEE CLAIMED TO HAVE PUR CHASED THE PROPERTY FOR A SUM OF RS.3.50 CRORE AND THE AO HAS MADE ADDI TION OF RS.5,59,66,000/- LAC SIMPLY ON THE BASIS OF DIFFERE NCE BETWEEN THE DVOS REPORT AND APPARENT SALE CONSIDERATION. NO A TTEMPT HAS BEEN MADE FOR VERIFYING THE PRICE FROM THE SELLER OF THE PROPERTY. IN OTHER WORDS, THERE IS NO POSITIVE MATERIAL EVIDENCING THE MAKING OF ACTUAL INVESTMENT BY THE ASSESSEE OVER AND ABOVE RS.3.50 C RORE. UNDER SUCH CIRCUMSTANCES, THERE CAN BE NO POINT IN MAKING ANY ADDITION TOWARDS UNEXPLAINED INVESTMENT U/S 69B OF THE ACT. IT IS RE LEVANT TO MENTION THAT THE LEGISLATURE HAS CARRIED OUT AMENDMENT BY THE FI NANCE ACT, 2013 W.E.F. 1.4.2014 BY SUBSTITUTING SECTION 56(2)(VII)( B) PROVIDING THAT WHERE ITA NO.1729/DEL/2012 CO NO.242/DEL/2012 5 AN INDIVIDUAL OR HUF RECEIVES ANY IMMOVABLE PROPERT Y, INTER ALIA, FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DUTY VAL UE OF THE PROPERTY BY AN AMOUNT EXCEEDING RS.50,000/-, THE STAMP DUTY VAL UE OF SUCH PROPERTY AS EXCEEDED SUCH CONSIDERATION SHALL BE TAXED AS I NCOME FROM OTHER SOURCES. THE LEGISLATURE HAS BROUGHT IN SECTION 5 6(2)(VII)(B) WITH THE SOLE INTENTION OF BRINGING UNDER-HAND PAYMENT OF SA LE CONSIDERATION OF IMMOVABLE PROPERTY TO TAX. THIS PROVISION HAS BEEN ENSHRINED W.E.F. THE A.Y. 2014-15 AND IS NOT APPLICABLE RETROSPECTIVELY TO THE A.Y. 2006-07 UNDER CONSIDERATION. SINCE THIS PROVISION IS PRO SPECTIVE AND THERE IS NO OTHER AUTHENTIC EVIDENCE OF THE ASSESSEE HAVING ACT UALLY MADE ANY INVESTMENT OVER AND ABOVE THE DECLARED SALE CONSIDE RATION, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS JUSTIFIE D IN DELETING THE ADDITION TO THE EXTENT OF RS.5,59,66,000/-. SIMILAR VIEW HAS BEEN TAKEN BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF GAGAN KHOSLA VIDE ITS ORDER DATED 31.7.2015 IN ITA NO.208/DEL/2012. WE, T HEREFORE, COUNTENANCE THE ACTION OF THE LD. CIT(A) IN DELETIN G THIS ADDITION. ITA NO.1729/DEL/2012 CO NO.242/DEL/2012 6 5. THE LD. AR DID NOT PRESS HIS CROSS OBJECTION. T HE SAME IS, THEREFORE, DISMISSED. 6. IN THE RESULT, BOTH THE APPEAL AND THE CO STAND DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.10.201 5. SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED,07 TH OCTOBER, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.