ACIT, New Delhi V. Sh. Abhishek Taneja, New Delhi

ITA 1512/DEL/2012

• Counselvise Citation: 151220114 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU JAUHRI
• Keywords: Unexplained investment; Cost of acquisition
• Section: 153A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G: NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I. C. SUDHIR, JUDICIAL MEMBER ITA NO. 1512/DEL/2012 ASSESSMENT YEAR: 2006-07 ACIT VS ABHISHEK TANEJA CENTRAL CIRCLE-18, ROOM NO. 327 7, SOUTH PATEL NAGAR 3 RD FLOOR, ARA CENTRE, E-2, N EW DELHI. JHANDEWALAN EXTN. NEW DELHI. (PAN AEVPT5444C) (APPELLANT) (RESP ONDENT) APPELLANT BY : SHRI RENU JAUH RI, CIT DR RESPONDENT BY : SHRI SALIL AGARW AL, ADVOCATE & SHRI ABH ISHEK GUPTA, CA ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPEL LATE ORDER WHEREBY THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 46,25,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE I.T. ACT 1961. AT THE OUTSET OF HEARING THE LD. AR POINTED OUT THAT ISSUE RAISED IN THIS RE GARD IS FULLY COVERED BY THE HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE FOLL OWING CASES :- CIT VS. DINESH JAIN HUF AND OTHERS 3 52 ITR 629 (DEL) CIT VS. DISCOVERY ESTATES PVT. LTD. 3 56 ITR 159 (DELHI) ITA NO. 1512/DEL/2012 2 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANC ED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND THE DEC ISIONS CITED. THE RELEVANT FACTS ARE THAT A SEARCH U/S 132 OF THE ACT WAS COND UCTED ON 5.1.2009 IN THE CASES OF M/S. TANEJA PURI , GROUP OF CASES WHICH AL SO COVERS THE CASE OF THE ASSESSEE. DURING THE YEAR THE ASSESSEE HAD FILED IT S RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,86,670/-. IN RESPON SE TO THE NOTICE U/S 153A ANOTHER RETURN DECLARING SAME INCOME WAS FILED. THE AO HOWEVER MADE ADDITION OF RS. 46,25,000/- AS UNEXPLAINED INVESTME NT U/S 69 OF THE ACT IN THE PURCHASE OF PROPERTY WHICH IS 1/4 TH PORTION OF THE GOVERNMENT BUILT UP SHOP AT 23-21 E, EAST PATEL NAGAR, NEW DELHI. THE AO NOTED THAT AS PER THE SALE DEED DATED 24.11.2005 THE PROPERTY IN QUESTION WAS PURCHASED FOR RS.3,75,000/-AND AFTER TAKING INTO ACCOUNT THE REGI STRATION EXPENSES OF RS. 35,000/- AND RENOVATION EXPENSES AT RS. 38,036/-, T HE ASSESSEE HAD SHOWN THE VALUE OF THIS PROPERTY AS ON 31.3.2006 AT RS. 4 ,48,036/-. IT WAS NOTED THAT DURING THE NEXT FINANCIAL YEAR RENTAL INCOME RECEIVED FROM TWO TENANTS WAS FOR RS. 4,04,712/-. CONSIDERING THESE FACTS THA T THE COST OF ACQUISITION OF THE SAID PROPERTY WAS LOWER THAN THE RENT RECEI VED FROM THIS PROPERTY EVEN IN THE FIRST YEAR, THE AO RECORDED REASONS THA T HAVING REGARD TO THE PROVISIONS OF SCHEDULE III OF THE WEALTH TAX ACT , 1957 THE REASONABLE VALUE OF THE PROPERTY IN QUESTION BY MOST CONSERVATIVE ES TIMATE IS DETERMINED AT RS. 50 LACS. HE HELD FURTHER THAT SINCE THE ASSESSE E HAS DECLARED THE CONSIDERATION OF PURCHASE OF THE PROPERTY AT RS. 3, 75,000/-, THEREFORE AN ITA NO. 1512/DEL/2012 3 ADDITION TO THE INCOME FOR THE AMOUNT IN DIFFERENT AT RS. 46,25,000/- WAS MADE UNDER THE PROVISIONS OF SECTION 69 OF THE ACT. THE LD. CIT(A) HAS HOWEVER DELETED THE ADDITION AFTER PASSING A DETAIL ED ORDER AND TAKING SUPPORT FROM THE RATIO LAID DOWN IN SEVERAL DECISIO NS CITED BEFORE HIM. 3. IN SUPPORT OF THE GROUND THE LD. DR HAS BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. AR ON THE OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT THE ISSUE RAISED IS FULLY COVERED BY THE CITED DECISIONS OF THE HONBLE JURISDICTIONAL D ELHI HIGH COURT. 4. HAVING GONE THROUGH THE ABOVE CITED DECISI ONS OF THE HONBLE JURISDICTIONAL DELHI HIGH COURT, WE FIND THAT UNDER ALMOST SIMILAR FACTS THE HONBLE HIGH COURT HAS BEEN PLEASED TO DECIDE THE I SSUE IN FAVOUR OF THE ASSESSEE. IN THE CASE OF CIT VS. DINESH JAIN ((HUF) (SUPRA) THE ASSESSEE, BESIDES CHALLENGING THE ADOPTION OF THE VALUE OF T HE PROPERTIES CALCULATED ON THE BASIS OF RULE 3 OF SCHEDULE III OF WEALTH TA X ACT 1957 FOR THE PURPOSE OF COMPARISON AND FOR ASCERTAINING THE ALLE GED UNEXPLAINED PORTION OF THE PURCHASE CONSIDERATION HAD ADDUCED EVIDENCE IN THE FORM OF COMPARABLE PROPERTIES IN THE SAME BUILDING AND SEVE RAL OTHER INSTANCES TO DEMONSTRATE THAT THE PRICE SHOWN TO HAVE BEEN PAID BY THE ASSESSEE, AS PER THE SALE DOCUMENT , REPRESENTED THE REAL AND AC TUAL CONSIDERATION FOR THE PROPERTIES AND NOTHING WAS PAID AS ON MONEY O VER AND ABOVE THE STATED CONSIDERATION. THE COMMISSIONER (APPEALS) DI D NOT AGREE WITH THE ASSESSEE AND UPHELD THE VIEW TAKEN BY THE AO IN PRI NCIPLE BUT REDUCED THE ITA NO. 1512/DEL/2012 4 ADDITION. THE TRIBUNAL FOLLOWING ITS EARLIER ORDER IN THE ASSEESSES CASE FOR EARLIER YEARS, DELETED THE ENTIRE ADDITION MADE U/S 69B. THE HONBLE HIGH COURT DISMISSING THE APPEAL HELD THAT THERE WAS NO INCRIMINATING MATERIAL SEIZED DURING THE SEARCH WHICH REVEALED ANY UNDERST ATEMENT OF THE PURCHASE PRICE. SINCE THE ENTIRE CASE HAS PROCEEDED ON THE ESTIMATION THAT THERE WAS UNDERSTATEMENT OF THE INVESTMENT, WITHOUT FINDING THAT THE ASSESSEE INVESTED MORE THAN WHAT WAS RECORDED IN T HE BOOKS OF ACCOUNTS PROVISIONS UNDER SECTION 69B COULD NOT BE INVOKED B Y THE AUTHORITIES. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. DISCOVERY ESTATES PVT. LTD. (SUPRA). ALMO ST SIMILAR ARE THE FACTS OF THE PRESENT CASE HE DISCUSSED ABOVE IN PARA NO.3.IN THE PRESENT CASE, THERE WAS NO EVIDENCE REVEALING ANY UNDERSTATEMENT OF THE PURCHASE PRICE AND THE AO HAD PROCEEDED ENTIRELY ON THE ESTIMATE THAT THERE WAS UNDERSTATEMENT OF THE INVESTMENT, WITHOUT A FINDING BASED ON THE EVIDENCE THAT THE ASSESSEE HAD INVESTED MORE THAN WHAT WAS S HOWN IN THE ASSESSEE. WE ARE THUS OF THE VIEW THAT THE LD. CIT(A) HAS RIG HTLY COME TO THE CONCLUSION THAT PROVISIONS LAID DOWN U/S 69B COULD NOT BE INVOKED BY THE AO IN THE PRESENT CASE. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE VIEW TAKE N BY THE LD. CIT(A) IS WELL SUPPORTED BY THE RATIO LAID DOWN BY THE JURISDICTIO NAL HIGH COURT IN THE ABOVE CITED CASES. THE FINDING OF THE LD. CIT(A) ON THE ISSUE IS THUS UPHELD. GROUND IS ACCORDINGLY REJECTED. ITA NO. 1512/DEL/2012 5 5. CONSEQUENTLY APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN CO URT ON 10 TH FEBRUARY, 2014. SD/- SD/- (G.D. AGRAWAL) ( I.C. SUDHIR ) VICE PRESIDENT JUDICIAL MEMBER DATED 10 TH FEBRUARY, 2014 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT