Shri.S.V.Rajendra Prasad, Bangalore V. Asst. Commissioner of Income Tax, Bangalore

ITA 1697/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7730 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJASEKHAR BENGALURU
• Assessee Lawyers: K SESHADRI
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI A.K. GARODIA , ACCOUNTANT MEMBER I TA NO. 1697/BANG/2016 ASSESSMENT YEAR : 2012 - 13 SHRI S.V. RAJENDRA PRASAD, NO.46, SHIVA PLAZA, AVENUE ROAD, BENGALURU 560 002. PAN: ACMPR 4617A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(2)(1), BANGALORE. APPELLANT RESPONDENT ITA NO.1793/BANG/2016 ASSESSMENT YEAR : 2012 - 13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(2)(1), BANGALORE. VS. SHRI S.V. RAJENDRA PRASAD, NO.46, SHIVA PLAZA, AVENUE ROAD, BENGALURU 560 002. PAN: ACMPR 4617A APPELLANT RESPONDENT ASSESSEE BY : SHRI K. SESHADRI, CA RE SPONDENT BY : SHRI M. RAJASEKHAR, ADDL .CIT(DR)(ITAT), BENGAL URU. DATE OF HEARING : 05 .06 .201 8 DATE OF PRONOUNCEMENT : 06.07.2018 ITA NOS. 1697 & 1793/BANG/2016 PAGE 2 OF 13 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.1793/B/16 IS AN APPEAL BY THE REVENUE, WH ILE ITA NO.1697/B/16 IS AN APPEAL BY THE ASSESSEE. BOTH TH ESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 21.06.2016 OF THE CIT(APPEALS)-5, BENGALURU RELATING TO ASSESSMENT YEAR 2012-13. 2. THE FACTS AND CIRCUMSTANCES GIVING RAISE TO THES E APPEALS ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. HE PURCHASED PROPER TY BEING A NON- RESIDENTIAL PROPERTY BEARING MUNICIPAL NO.41, PID N O.63-40-41 SITUATE AT LASKER, HOSUR ROAD, ADUGODI, LAKKASANDRA, WARD NO.6 3, BANGALORE, COMPRISING OF LAND OF AN EXTENT OF 5400 SQ.FT. TOGE THER WITH BUILDING THEREON MEASURING ABOUT 16000 SQ.FT. (HEREINAFTER REFERRED TO AS THE PROPERTY) UNDER A REGISTERED SALE DEED DATED 27.2.2012 FROM O NE SMT. P. VENKATALAKSHMI (HEREINAFTER REFERRED TO AS THE VEN DOR 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 P AYMENT 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 S ALE DEED AND FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION, THE AO WANT ED 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 T HE INCOME TAX ACT, 1961 (ACT). IN HER STATEMENT RECORDED U/S.131 OF T HE 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.4,84,00,00 0/- AS GIVEN BY THE VENDOR WAS AS FOLLOWS:- ITA NOS. 1697 & 1793/BANG/2016 PAGE 3 OF 13 3. THE AO ISSUED SUMMONS U/S.131 OF THE ACT FOR EXA MINATION OF THE ASSESSEE AND EXAMINED HIM AND IN THE COURSE OF SUCH EXAMINATION CONFRONTED THE STATEMENT OF THE VENDOR TO THE ASSES SEE. THE ASSESSEE DENIED HAVING PAID ANY CONSIDERATION OVER AND ABOVE THE SUM OF ITA NOS. 1697 & 1793/BANG/2016 PAGE 4 OF 13 RS.3,80,00,000/- WHICH IS THE CONSIDERATION FOR TRA NSFER AS RECITED IN THE REGISTERED SALE DEED. 4. THE AO, HOWEVER, REFUSED TO BELIEVE THE STATEMEN T OF THE ASSESSEE AND PREFERRED TO ACCEPT THE STATEMENT OF THE VENDOR BECAUSE THE VALUE OF THE PROPERTY FOR THE PURPOSE OF STAMP DUTY AND REGI STRATION WAS RS.4,48,00,000 AND THEREFORE IT WAS HIGHLY PROBABLE THAT THE CLAIM OF THE VENDOR THAT SHE RECEIVED A SUM OF RS.5,13,52,800 WA S HIGHLY PROBABLE AND THEREFORE THE DIFFERENCE BETWEEN THE VALUE AS SHOWN IN THE REGISTERED DOCUMENT AND THE VALUE ADOPTED BY THE REGISTRAR OF ASSURANCES FOR THE PURPOSE OF REGISTRATION AND STAMP DUTY VIZ., A SUM OF RS.68,00,000 (RS.4,48,00,000 3,80,00,000) SHOULD BE ADDED AS U NEXPLAINED INVESTMENT IN PURCHASE OF THE PROPERTY U/S.69 OF TH E ACT. THE AO ACCORDINGLY ADDED A SUM OF RS.68,00,000/- TO THE TO TAL INCOME OF THE ASSESSEE. 5. APART FROM THE ABOVE, THE AO ALSO NOTICED THAT T HE VENDOR HAS CLAIMED THAT A SUM OF RS.65,52,800/- HAD BEEN PAID BY THE ASSESSEE TO THE VENDOR. THOUGH THE ASSESSEE DENIED HAVING PAID ANY SUCH SUM OR THE EXISTENCE OF ANY EVIDENCE IN THE FORM OF FURNITURE AND FIXTURE IN THE PROPERTY, THE AO BASED ON THE STATEMENT OF THE VEND OR ADDED A SUM OF RS.65,52,800 TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN FURNITURE AND FIXTURES U/S.69 OF THE ACT. 6. AGGRIEVED BY THE AFORESAID ADDITIONS MADE BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE ASSESSEE POINTE D OUT THAT THE ADDITION OF RS.68,00,000/- MADE BY THE AO COMPRISES OF THREE COMPONENTS VIZ., (I) A SUM OF RS.25,00,000/- WHICH WAS ADVANCE OR SECURITY DEPOSIT RECEIVED BY THE VENDOR FROM ONE OF THE TENANTS IN T HE PROPERTY VIZ., M/S. STONE ARTS; ITA NOS. 1697 & 1793/BANG/2016 PAGE 5 OF 13 (II) ANOTHER SUM OF RS.28,00,000/- WHICH WAS ALSO ADVANCE OR SECURITY DEPOSIT RECEIVED FROM ANOTHER TENANT M/S.I QPC INDIA PVT.LTD.; AND (III) SUM OF RS.15,00,000/- BEING CASH CONSIDERAT ION RECEIVED BY THE VENDOR FROM THE ASSESSEE. AS FAR AS THE FIRST TWO ITEMS OF SECURITY DEPOSIT A RE CONCERNED, IT IS NOT IN DISPUTE THAT THE PROPERTY AT THE TIME OF SALE WAS I N POSSESSION OF THE AFORESAID TWO TENANTS AND ON SALE IN FAVOUR OF THE ASSESSEE THEY ATTORNED TENANCY BETWEEN THEM AND THE ASSESSEE AND IT WAS TH E AGREEMENT BETWEEN THE ASSESSEE, VENDOR AND THE TENANTS OF THE PROPERTY THAT THE ASSESSEE WILL REFUND OR SHALL BE RESPONSIBLE FOR RE TURN OF SECURITY DEPOSIT AT THE TIME OF TERMINATION OF THE TENANCY. 7. THE ASSESSEE POINTED OUT BEFORE CIT(APPEALS) THA T AS FAR AS THE SUM OF RS.25,00,000/- BEING SECURITY DEPOSIT IN RES PECT 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 ENTER ED 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. S TONE ARTS TO THE VENDOR BY TWO CHEQUES FOR RS.5 LACS EACH DATED 15.7.2009 A ND 15.11.2009 RESPECTIVELY. THE ASSESSEE AS LESSOR AGREED AND AC KNOWLEDGED 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 DATE D 1.10.2014 WAS ENTERED INTO BETWEEN THEM AND THE ASSESSEE AFTER TH E PURCHASE OF THE PROPERTY BY THE ASSESSEE AND A SUM OF RS.20 LACS WA S ACKNOWLEDGED AS SECURITY DEPOSIT PAID TO THE VENDOR WHICH THE ASSES SEE WAS TO ACKNOWLEDGE AS SECURITY DEPOSIT FOR THE LEASE. THE ASSESSEE THUS SUBMITTED THAT ONLY A SUM OF RS.30 LACS WAS SECURIT Y DEPOSIT PAYABLE TO THE TENANTS AND NOT RS.53,00.000/- (RS.25 LACS + RS.28 LACS) AS CLAIMED BY THE ITA NOS. 1697 & 1793/BANG/2016 PAGE 6 OF 13 VENDOR. THE ASSESSEE SUBMITTED THAT SINCE NO ACTUA L INVESTMENT WAS MADE BY THE ASSESSEE BUT MERELY ACKNOWLEDGED LIABIL ITY TO RETURN SECURITY DEPOSIT TO THE TENANTS, NO ADDITION U/S.69 OF THE A CT CAN BE MADE AS THE CONDITION PRECEDENT FOR INVOKING THOSE PROVISIONS A RE THAT THE ASSESSEE SHOULD HAVE MADE AN INVESTMENT IN THE SENSE THERE O UGHT TO HAVE BEEN AN OUTFLOW OF FUNDS FROM THE ASSESSEE, WHICH CONDITION IS NOT FULFILLED IN THE PRESENT CASE. 8. AS FAR AS THE SUM OF RS.15 LACS CLAIMED TO HAVE BEEN PAID IN CASH IS CONCERNED, THE ASSESSEE POINTED OUT THAT EXCEPT THE STATEMENT OF THE VENDOR THERE IS NO OTHER BASIS ON WHICH THE AO CAN CONCLUDE THAT THE ASSESSEE PAID RS.15 LACS OVER AND ABOVE THE SALE CO NSIDERATION OF RS.3,80,00,000/- WHICH IS THE CONSIDERATION PAID FO R ACQUIRING THE PROPERTY AS PER THE REGISTERED SALE DEED. THE ASSESSEE DENI ED HAVING PAID ANY SUM OVER AND ABOVE WHAT IS STATED IN THE REGISTERED DOCUMENT. THE ASSESSEE CONTENDED THAT THE FACT THAT THE VALUE OF THE PROPERTY AS PER THE VALUATION OF REGISTRAR OF ASSURANCE FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION WAS MUCH MORE THAN THE ACTUAL SALE CON SIDERATION THAT CANNOT BE THE SOLE BASIS TO CONCLUDE THAT THE ASSESSEE HAD IN FACT PAID A SUM OF RS.15 LACS IN CASH OVER AND ABOVE THE ACTUAL SALE C ONSIDERATION RECORDED IN THE REGISTERED DOCUMENT. 9. ON THE ADDITION OF RS.53 LACS TOWARDS UNEXPLAINE D INVESTMENT IN THE FORM OF SECURITY DEPOSIT FROM TENANTS, THE CIT(A) A CCEPTED THE CONTENTION OF THE ASSESSEE THAT ONLY A SUM OF RS.30 LACS WAS SECU RITY DEPOSIT PAYABLE TO THE TWO TENANTS AT RS.10 LACS TO STONE ARTS AND RS. 20 LACS TO IQPC INDIA PVT. LTD. AND NOT RS.53,00.000/- (RS.25 LACS + RS.2 8 LACS) AS CLAIMED BY THE VENDOR. THE CIT(A) ALSO ACCEPTED THE CONTENTIO N THAT SINCE NO ACTUAL INVESTMENT WAS MADE BY THE ASSESSEE BUT MERELY ACKN OWLEDGED LIABILITY TO RETURN SECURITY DEPOSIT TO THE TENANTS, NO ADDITION U/S.69 OF THE ACT CAN BE ITA NOS. 1697 & 1793/BANG/2016 PAGE 7 OF 13 MADE AS THE CONDITION PRECEDENT FOR INVOKING THOSE PROVISIONS ARE THAT THE ASSESSEE SHOULD HAVE MADE AN INVESTMENT IN THE SENS E THERE OUGHT TO HAVE BEEN AN OUTFLOW OF FUNDS FROM THE ASSESSEE, WH ICH CONDITION IS NOT FULFILLED IN THE PRESENT CASE. THE ADDITION OF RS. 53 LACS WAS ACCORDINGLY DELETED BY THE CIT(A). AGGRIEVED BY THE ACTION OF THE CIT(A), THE REVENUE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL, WHICH R EADS THUS:- 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION M ADE 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 DECL ARED THIS AMOUNT AS SALE CONSIDERATION RECEIVED IN HER RETURN OF INCOME. FURTHER, THE CIT(A) OUGHT TO HAVE TAKEN NOT E OF THE FACT THAT DEPOSIT AMOUNTS ARE ONLY RS.40 LAKHS AND AS SUCH RS.13 LAKHS IS NOT EXPLAINED AND SHOULD HAVE B EEN 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 ACCE PT 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 A MOUNT OF RS.15 LAKHS CASH STATED TO BE RECEIVED BY THE SELLE R 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 EXA MINED. DURING THE APPELLATE PROCEEDINGS THE APPELLANT COUL D PROVE THAT THE STATEMENT GIVEN BY THE SELLER IS TOTALLY NOT RE LIABLE IN THE ABSENCE OF THE ANY COGENT EVIDENCES TO SUBSTANTIATE . NOW I GO BY THE FACT THAT THE CAUSE OF ACTION HAS BEEN ORIGINAT ED FROM THE APPELLANT BY PAYING STAMP DUTY AT 1% AND PROCEED IN EXAMINING THE OTHER ASPECTS. DURING THE APPELLATE PROCEEDINGS THOUGH THE APPELLANT THROUGH HIS AR HAS DENIED OF HAVING PAID CASH OF RS.15 ITA NOS. 1697 & 1793/BANG/2016 PAGE 8 OF 13 LAKHS, AND ALSO PAID TOWARDS FURNITURE AND FIXTURES OF RS.65,52,800/-, IN VIEW OF THE FACT THAT THE GUIDAN CE VALUE OF THE PROPERTY WORKED OUT BASED ON THE 1% STAMP DUTY PAID FOR REGISTRATION, THE TOTAL UNEXPLAINED INVESTMENT OF T HE APPELLANT IN THE SAID PROPERTY COULD BE TREATED TO THE EXTENT OF THE DIFFERENCE OF THE AMOUNT STATED TO BE PAID AND THE GUIDANCE VA LUE WHICH WORKS OUT TO BE RS.68,00,000/- OVER AND ABOVE THE A MOUNT PAID TOWARDS FURNITURE AND FIXTURES OF RS.52,30,946/-. O UT OF RS.68 LAKHS DIFFERENCE, THE AMOUNT OF RS.40 LAKHS DEPOSIT S RECEIVED FROM THE TWO TENANTS WERE TREATED AS EXPLAINED, SIN CE THEY WERE THE RENTAL DEPOSITS OF THE TENANTS, AS ADJUSTED AGA INST THE SALE CONSIDERATION. HOWEVER THE ADVANCES RECEIVED FROM T ENANTS OF RS. 20 LAKHS EACH ARE FOUND TO BE BY APPELLANT AFTE R HE BECAME THE OWNER WHEREAS THE ADVANCES RECEIVED FROM THE TE NANTS BY THE SELLER AS ADMITTED IN HER STATEMENT WHICH WERE TREA TED BY HER IN THE SALE CONSIDERATION WAS RS. 28 LAKHS AND RS.25 L AKHS RESPECTIVELY HAVE TO BE TAKEN FOR CONSIDERATION OF THE SOURCES EXPLAINED. THE REMAINING DIFFERENCE AMOUNT OF THE RS.15,00,000/- THOUGH THERE CANNOT BE ANY EVIDENCE FOR HAVING PAID ANY CASH, THE DIFFERENCE AMOUNT OF RS.15,00,00 0/- ARE TREATED AS UNEXPLAINED THOUGH THE APPELLANT WAS VEHEMENTLY ARGUED AND DENIED FOR HAVING PAID OVER AND ABOVE THE SALE CONS IDERATION OF RS.3,84,00,000/- AND THEREFORE THE ASSESSING OFFIC ERS ACTION IS HEREBY UPHELD TO THE EXTENT OF RS 15,00,000/-. 11. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GR OUNDS OF APPEAL: 1. THE IMPUGNED ORDER OF THE CIT(A) INSOFAR AS AND TO THE EXTENT IT IS PREJUDICIAL TO THE INTEREST OF THE APP ELLANT, IS BAD AND UNSUSTAINABLE IN THE EYE OF LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - 5, BENGALURU ERRED CONFIRMING THE ADDITION OF RS. 15,0 0,000/- MADE BY THE ASSESSING OFFICER, THE SUM CONSTITUTING ALLEGED PAYMENT IN CASH BY THE APPELLANT AS PART CONSIDERAT ION TOWARDS PURCHASE OF AN IMMOVABLE PROPERTY. 3. THE APPELLANT PRAYS THAT ON THE FACTS AND CIRCUM STANCES OF THE CASE AS ALREADY EXPLAINED IN HIS APPEAL BEFORE THE ITA NOS. 1697 & 1793/BANG/2016 PAGE 9 OF 13 LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-5, BENGALURU, THE ADDITION OF RS. 15,00,000 MADE BY TH E 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 APPELLAN T MAY URGE AT THE HEARING, IT IS PRAYED THAT THE APPEAL BE ALL OWED. 12. AS FAR AS PAYMENT OF RS.65,52,800/- AS PAYMENT FOR FURNITURE AND FIXTURES IN THE PROPERTY WHICH IS OVER AND ABOVE TH E SALE CONSIDERATION OF RS.3,80,00,000/- STATED IN THE REGISTERED DOCUMENT, THE ASSESSEE SUBMITTED THAT THERE WAS NO SUCH FURNITURE OR FIXTU RES WORTH THE SUM STATED BY THE VENDOR IN THE PROPERTY. A CONFIRMATION TO T HE ABOVE EFFECT REGARDING NON-EXISTENCE OF FURNITURE AND FIXTURES IN THE PROP ERTY FROM THE TENANTS THAT THE FURNITURE AND FIXTURES EXISTING IN THE LEASE PR OPERTY BELONGS TO THEM AND NOT TO THE VENDOR WAS ALSO FILED. IT WAS ALSO POIN TED OUT THAT IN THE LEASE DEEDS ALSO THERE IS NO REFERENCE TO EXISTENCE OF AN Y FURNITURE OR FIXTURES. 13. THE CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE AN D DELETED THE ADDITION MADE BY THE AO FOR THE REASON THAT THE EXI STENCE OF FURNITURE AND FITTINGS HAS NOT BEEN PROVED. THE FOLLOWING WERE T HE RELEVANT OBSERVATIONS OF THE CIT(A) IN THIS REGARD. 6.4 AS REGARDS THE CONSIDERATION PAID TOWARDS FUR NITURE AND FIXTURES OF RS.65,52,800/- THE APPELLANT SUBMITTED THAT THE FIXTURES AND FITTINGS HAVE BEEN ADDED BY THE TENANTS THEMSEL VES AND HENCE DID NOT FORM PART OF THE VALUE OF THE PROPERTY PURC HASED. TO SUBSTANTIATE HIS CLAIM A COPY OF THE SALE DEED DATE D 27/02/2012 BY WHICH THE PROPERTY WAS PURCHASED BY THE APPELLAN T FROM THE SELLER HAS BEEN FURNISHED WHEREIN THE FURNITURE AND FITTINGS VALUED AT RS.65,52,800/- HAD NOT BEEN SHOWN AS PART OF THE PROPERTY SOLD. FURTHER, THE APPELLANT HAS FILED THE LEASE AGREEMEN TS THAT HAVE BEEN ENTERED BY THE APPELLANT WITH THE TENANTS WHER EIN THERE WAS NO MENTION OF ANY FITTINGS AND FIXTURES. KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE IT IS HEL D THAT THE ITA NOS. 1697 & 1793/BANG/2016 PAGE 10 OF 13 ASSESSING OFFICER WAS NOT CORRECT IN TREATING THE V ALUE OF FIXTURES AND FITTINGS SOLELY BASED ON THE STATEMENT GIVEN BY SMT. P.VENKATALAKSHMI AS UNEXPLAINED INVESTMENT WITHOUT HAVING ANY COGENT EVIDENCES SUCH AS VALUATION OF SUCH FITTINGS AND FIXTURES OR ANY MENTION EITHER IN THE SALE DEED DATED 27/02/ 2012 OR IN THE LEASE AGREEMENTS ENTERED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE OPINION THAT THE ADDITION M ADE SOLELY BASED ON THE STATEMENT GIVEN BY THE SELLER TOWARDS VALUE OF FITTINGS AND FIXTURES CANNOT BE SUSTAINED. THEREFOR E, THE GROUNDS OF APPEAL IS PARTLY ALLOWED. 14. AGGRIEVED BY THE AFORESAID DECISION OF THE CIT( A), THE REVENUE HAS RAISED GROUND NO. 3 BEFORE THE TRIBUNAL, WHICH REA DS AS FOLLOWS: 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE ON THE CONSIDERATION SAID TO HAVE BEEN RECEIVED BY THE SEL LER TOWARDS FIXTURES AND FURNITURE ON THE GROUND THAT THERE IS NO MENTION OF FURNITURE AND FIXTURES IN THE LEASE DEED ENTERED IN TO BY THE ASSESSEE IN ABSENCE OF ANY EVIDENCE THAT THERE ARE NO FURNITURE AND FIXTURES IN THE SAID PROPERTY. 15. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED CO UNSEL FOR THE ASSESSEE AND THE LEARNED DR ON THE ISSUES RAISED BY THE ASSESSEE AND THE REVENUE 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 O F THE PROPERTY ALONE WAS AVAILABLE AND THE CIT(A) OUGHT TO HAVE CONFIRME D 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 A S DEPOSIT BY THE VENDOR TO THE TENANTS OF THE PROPERTY, EXCEPT THE S TATEMENT OF THE VENDOR. THE STATEMENT OF THE VENDOR CANNOT BE BELIEVED IN V IEW OF THE DOCUMENTARY EVIDENCE IN THE FORM OF LEASE DEED BETW EEN THE ASSESSEE ITA NOS. 1697 & 1793/BANG/2016 PAGE 11 OF 13 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 S ECURITY DEPOSIT PAYABLE TO THE TENANTS AND NOT RS.53,00.000/- (RS.25 LACS + RS.28 LACS) AS CLAIMED BY THE VENDOR. SINCE NO ACTUAL INVESTMENT WAS MADE BY THE ASSESSEE BUT HE MERELY ACKNOWLEDGED LIABILITY TO RETURN SECURITY DEPOSIT TO THE TENANTS, NO ADDITION U/S.69 OF THE ACT CAN BE MADE AS THE CO NDITION PRECEDENT FOR INVOKING THOSE PROVISIONS ARE THAT THE ASSESSEE SHO ULD HAVE MADE AN INVESTMENT IN THE SENSE THERE OUGHT TO HAVE BEEN AN OUTFLOW OF FUNDS FROM THE ASSESSEE, WHICH CONDITION IS NOT FULFILLED IN T HE PRESENT CASE. THE CIT(A) WAS THEREFORE CORRECT IN DELETING THE ADDITI ON MADE BY THE AO. WE FIND NO GROUND TO INTERFERE WITH THE ORDER OF THE C IT(A) AND HENCE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 17. AS FAR AS GR.NO.3 RAISED BY THE REVENUE IS CONC ERNED, THE LEARNED DR SUBMITTED THAT THE STATEMENT OF THE VENDOR SHOUL D BE ACCEPTED AS CORRECT AND THE ADDITION MADE BY THE AO SHOULD BE S USTAINED. WE ARE OF THE VIEW THAT THE DOCUMENTARY EVIDENCE IN THE FORM OF CONFIRMATION BY M/S. STONE ART AND M/S. IQCP INDIA PVT. LTD., THE TENANT S OF THE PROPERTY THAT WHATEVER FURNITURE AND FIXTURES EXIST IN THE PROPER TY IT IS THEIR OWN AND NOT PROVIDED BY THE VENDOR, HAS TO BE BELIEVED. THE ST ATEMENT OF THE VENDOR HAS BEEN DENIED BY THE ASSESSEE IN HIS STATEMENT. IN SUCH CIRCUMSTANCES, THE CLAIM OF THE VENDOR, WHICH IS THE ONLY BASIS OF THE IMPUGNED ADDITION, CANNOT BE BELIEVED. THERE ARE NO OTHER CIRCUMSTANC ES, WHICH CAN COMPEL US TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY THE CIT(A). CONSEQUENTLY, GR.NO.3 RAISED BY THE REVENUE IS DISM ISSED. ITA NOS. 1697 & 1793/BANG/2016 PAGE 12 OF 13 18. AS FAR AS THE APPEAL OF THE ASSESSEE IS CONCERN ED, THE PAYMENT OF RS.15 LACS BY THE ASSESSEE IN CASH OVER AND ABOVE T HE SALE CONSIDERATION STATED IN THE REGISTERED DOCUMENT HAS BEEN DENIED B Y THE ASSESSEE. THE BASIS ON WHICH THE IMPUGNED ADDITION WAS MADE BY TH E AO AND SUSTAINED BY THE CIT(A) IS THE STATEMENT OF THE VENDOR AND TH E CIRCUMSTANCE THAT THE VALUE OF THE PROPERTY AS PER THE REGISTERING AUTHOR ITIES FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION WAS MUCH HIGHER THAN TH E VALUE STATED IN THE SALE DEED AND THEREFORE THERE WAS A PROBABILITY OF THE STATEMENT OF THE VENDOR BEING TRUE AND FURTHER CIRCUMSTANCE THAT THE VENDOR HAS OFFERED THE SUM IN QUESTION AS INCOME IN HER RETURN OF INCOME F ILED FOR THE RELEVANT ASSESSMENT YEAR. THE LEARNED COUNSEL FOR THE ASSESS EE HAS BROUGHT TO OUR NOTICE A DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PRL.CIT VS. VIVEK PRAHALADBHAI PATEL (2016) 66 TAXMANN.COM 41 (GUJARAT) WHEREIN THE HONBLE ALLAHABAD HIGH COURT ON IDENTICAL SET O F FACTS HELD THAT ADDITION CANNOT BE SUSTAINED. THE FOLLOWING WERE THE RELEVA NT OBSERVATIONS OF THE HONBLE ALLAHABAD HIGH COURT IN THIS REGARD:- 8. FOR THE REASONS STATED HEREINABOVE, THIS COUR T IS IN COMPLETE AGREEMENT WITH THE FINDINGS RECORDED BY THE TRIBUNA L UPON APPRECIATION OF THE EVIDENCE ON RECORD AND FINDS NO REASON TO TAKE A DIFFERENT VIEW. IN THE OPINION OF THIS COURT, HA VING REGARD TO THE EVIDENCE WHICH HAS COME ON RECORD, WHICH REVEALS TH AT THERE IS AN AGREEMENT TO SELL EXECUTED BETWEEN THE ASSESSEE AND SELLERS, WHICH SHOWS THE PRICE OF THE PLOTS OF LAND IN QUEST ION TO BE MUCH HIGHER FIGURE THAN THE DOCUMENTED PRICE AND THE FAC T THAT THE SELLERS HAVE STATED THAT THEY HAVE RECEIVED HIGHER AMOUNTS BY WAY OF ON-MONEY AND HAVE ALSO SHOWN RECEIPT OF SUCH AMO UNT IN THEIR INCOME-TAX RETURNS, THE CIRCUMSTANCES DO RAISE A SU SPICION. HOWEVER, AS HELD BY THE SUPREME COURT IN CIT VS. DA ULATRAM RAWATMULL (1964) 53 ITR 574, EVEN IF CIRCUMSTANCES RAISE A SUSPICION, SUSPICION CANNOT TAKE THE PLACE OF EVIDE NCE. 19. THE ABOVE DECISION OF THE HONBLE GUJARAT HIGH COURT APPLIES ON ALL FOURS TO THE FACTS OF THE PRESENT CASE. CONSEQUENT LY, THE ADDITION SUSTAINED ITA NOS. 1697 & 1793/BANG/2016 PAGE 13 OF 13 BY THE CIT(A) ALSO DESERVES TO BE DELETED. WE ACCO RDINGLY DIRECT THAT THE ADDITION OF RS.15 LACS SUSTAINED BY THE CIT(A) ALSO BE DELETED. THE GROUNDS OF APPEAL OF THE ASSESSEE IN THIS REGARD AR E ALLOWED. 20. IN THE RESULT, ITA NO.1793/BANG/2016 IS DISMISS ED WHILE ITA NO.1697/BANG/2016 IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 06 TH DAY OF JULY, 2018. SD/- SD/- ( A.K. GARODIA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 06 TH JULY, 2018. / D ESAI S MURTHY / COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITA T, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.