PRIYA S. KOTHARI, MUMBAI V. ITO 6(3)(4), MUMBAI

ITA 3222/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75447 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Assessee Lawyers: S C TIWARI
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Fair market value; Assessment record
• Section: 69C; 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI . , !'# $ $ $ $ , %& '()* , %+ ,- % # BEFORE SHRI D.MANMOHAN, VP AND SHRI N.K. BILLAIY A, AM ./ I.T.A. NO.3222/MUM/2013 ( . . . . / ASSESSMENT YEAR : 2008-09 MRS. PRIYA S. KOTHARI, 6-B,BRIGHTON-2, RUNGTA LANE, OFF. NEPEAN SEA ROAD, MUMBAI-400 006 / VS. THE ITO-6(3)(4), AAYAKAR BHAVAN, MUMBAI-400 020 ./ I.T.A. NO.4508/MUM/2013 ( . . . . / ASSESSMENT YEAR : 2008-09 THE ITO-6(3)(4), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. MRS. PRIYA S. KOTHARI, 6-B,BRIGHTON-2, RUNGTA LANE, OFF. NEPEAN SEA ROAD, MUMBAI-400 006 -/ %+ ./ 0 ./ PAN/GIR NO. : AFKPK 1492H ( /1 / APPELLANT ) .. ( 23/1 / RESPONDENT ) /1 4 % / APPELLANT BY: SHRI S.C. TIWARI 23/1 5 4 % / RESPONDENT BY: SHRI R.K. SAHU 5 6+ / DATE OF HEARING : 20.01.2014 7. 5 6+ / DATE OF PRONOUNCEMENT: 29.01.2014 ,%8 / O R D E R PER N.K. BILLAIYA, AM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-12, M UMBAI DT.05.03.2013 ITA NOS. 4508 & 3222/M/13 2 PERTAINING TO A.Y. 2008-09. AS BOTH THESE APPEALS INVOLVED COMMON ISSUES, THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA 3222/MUM/2013 ASSESSEES APPEAL & ITA NO. 4508/MUM/2013 REVENUES APPEAL 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 56,46,500/- U/S. 69B OF THE I.T. ACT. 3. IT WOULD BE BETTER TO CONSIDER THE FIRST TWO GRO UNDS OF REVENUES APPEAL HERE ITSELF AS GRIEVANCE OF BOTH THE PARTIE S REVOLVE AROUND THE SAME FACTS. THE FIRST TWO GROUNDS OF REVENUES APP EAL IN ITA NO. 4508/M/2013 READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 50 ,00,000/- U/S. 69B OF THE I.T. ACT, 1961 ON THE BASIS OF A RE CEIPT DT. 1.3.2012 WITHOUT APPRECIATING THE FACT THAT THIS RE CEIPT DT. 1.3.2012 PERTAIN TO A.Y. 2012-13 AND THAT THERE IS NO EVIDENCE TO CO-RELATE THIS PAYMENT WITH THE PURCHAS E OF PROPERTY MADE BY THE ASSESSEE IN A.Y. 2008-09, MORE SO IN VIEW OF THE FACT THAT THE NAME OF THE ASSESSEE IS N OT REFLECTING AS A DEBTOR IN THE BALANCE SHEET AS ON 31.3.2011 OF M/S. SONAM EARTH MOVERS AND CONSTRUCTION PVT. LTD. (THE SELLER). 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LA W, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 50 ,00,000/- U/S. 69B OF THE I.T. ACT, 1961 WITHOUT APPRECIATING THE FACT THAT NO CONFIRMATION WAS RECEIVED FROM THE SELLER I .E. M/S. SONAM EARTH MOVERS AND CONSTRUCTION PVT. LTD. REGA RDING THE RECEIPT OF PAYMENT FROM THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE PERIOD PERTAINING TO A.Y. 2008-09. ITA NOS. 4508 & 3222/M/13 3 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHO WN INCOME FROM HOUSE PROPERTY WHICH WAS NOT THERE IN THE EARLIER ASSESSM ENT YEAR. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE EXPLAI NED THAT THE SAID RENTAL INCOME IS DERIVED FROM A PROPERTY PURCHASED DURING THE YEAR UNDER CONSIDERATION. THE AO OBSERVED THAT AS PER THE SAL E-PURCHASE AGREEMENT DT. 7.12.2007, THE ASSESSEE ENTERED INTO AN AGREEMENT FOR SALE FOR THE PURCHASE OF NINE UNITS ADMEASURING 14 83 SQ. FT. ON THE SECOND FLOOR OF THE BUILDING KNOWN AS STATION CENT RE SITUATED AT MALAD (W), ON THE S.V. ROAD, MUMBAI FROM M/S. SONAM EARTH MOVERS & CONSTRUCTION PVT. LTD FOR A CONSIDERATION OF RS. 60 ,00,000/-. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS ISSUED TWO C HEQUES FOR RS. 10,00,000/- AND RS. 50,00,000/- EACH. THE AO NOTIC ED THAT THE PARTIES HAVE PAID THE STAMP DUTY ON THE SAID AGREEMENT OF RS. 5,45,000/-. WHEN THE DOCUMENT WAS LODGED WITH THE COLLECTOR OF STAMPS HE DETERMINED THE MARKET VALUE OF THE PROPERTY AT RS. 1,16,46,500/-. THE ASSESSEE WAS REQUIRED TO PAY ADDITIONAL STAMP DUTY OF RS. 37,330/-. THE ASSESSEE WAS ALSO PENALIZED FOR UNDERVALUATION OF T HE LIABILITY OF PAYMENT OF PROPER STAMP DUTY. THE PENALTY SO LEVIED WAS AT RS. 5,973/-. 4.1. TAKING A LEAF OUT OF THESE FACTS, THE AO WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS PURCHASED THE SAID PROPERTY FOR RS . 1,16,46,500/- WHEREAS THE ASSESSEE HAS SHOWN THE VALUE AT RS. 60 ,00,000/-. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE DIFFERENCE SH OULD NOT BE TREATED AS UN-RECORDED EXPENDITURE U/S. 69B OF THE ACT. THE ASSESSEE FILED A DETAILED REPLY DT. 22.11.2010 AND EXPLAINED THAT TH E PURCHASE PRICE PAID FOR THE SAID PROPERTY AS PER THE AGREEMENT FOR SALE DT. 4.12.2007 IS RS. 60,00,000/-. THE VALUE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY CANNOT BE TAKEN AS SALE CONSIDERATION RECEIVED FOR THE PURPOSE OF ITA NOS. 4508 & 3222/M/13 4 SEC. 48. IT WAS STRONGLY CONTENDED THAT THE VALUAT ION DONE BY STAMP AGENCY FOR THE PURPOSE OF STAMP DUTY WOULD NOT SUBS TITUTE THE ACTUAL SALE CONSIDERATION. IT WAS FURTHER EXPLAINED THAT SEC. 50C IS APPLICABLE IN THE CASE OF A SELLER OF A PROPERTY AND NOT TO THE PURCH ASER. THE ASSESSEE RELIED UPON THE DECISION OF PUNJAB & HARYANA HIGH C OURT IN THE CASE OF CIT VS CHANDNI BHUCHAR 323 ITR 510 AND ALLAHABAD HI GH COURT IN THE CASE OF DINESH KUMAR MITTAL 193 ITR 771. THE AO C ONSIDERED THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE DEC ISIONS RELIED UPON AND, DISTINGUISHING THE FACTS OF THE CASE IN HAND RELIE D UPON BY THE ASSESSEE, ADDED THE DIFFERENCE OF RS. 56,46,500/- U/S. 69B OF THE ACT BEING AMOUNT OF INVESTMENTS NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNT. 4.2. THE AO FURTHER OBSERVED THAT OUT OF THE CONSID ERATION OF RS. 60,00,000/- AS CLAIMED BY THE ASSESSEE ONLY CHEQUE NO. 516573 FOR RS. 10,00,000/- WAS PRESENTED AND CLEARED ON 10.12.2007 AND CHEQUE NO. 516574 FOR RS. 50,00,000/- WAS NOT EVEN PRESENTED. THE AO FURTHER NOTED THAT THE ASSESSEE DID NOT HAVE THE AMOUNT OF RS. 50,00,000/- TO HER CREDIT ANY TIME DURING THE ENTIRE FINANCIAL YEAR LE AVE ALONE THE DATE AFTER THE ISSUE OF CHEQUE. WHEN THE ASSESSEE WAS CONFRON TED WITH THIS VIDE LETTER DT. 22.11.2010, THE ASSESSEE REPLIED THAT TH ERE WERE IRREGULARITIES IN THE BUILDING HENCE THE PAYMENT WAS WITHHELD. THIS SUBMISSION OF THE ASSESSEE WAS CONTRADICTORY TO THE FACT THAT WITHIN 6 DAYS FROM THE AGREEMENT OF PURCHASE, THE ASSESSEE HAD ENTERED INT O A LEAVE AND LICENCE AGREEMENT WITH AXIS BANK LTD. BY WHICH THE ASSESSEE RECEIVED A SECURITY DEPOSIT OF RS. 10,20,000/- AND RENT OF R S. 1,70,000/- PER MONTH. THE AO WAS OF THE FIRM BELIEF THAT THESE UN DISPUTED FACTS CLEARLY SHOW THAT NO PRUDENT BUILDER WOULD HAND OVER THE PO SSESSION OF THE PROPERTY BY TAKING A PAYMENT OF RS. 10,00,000/-. T HE AO WENT ON TO MAKE THE ADDITION OF RS. 50,00,000/- U/S. 69B OF TH E ACT. ITA NOS. 4508 & 3222/M/13 5 5. THE ASSESSEE CARRIED THESE ADDITIONS BEFORE THE LD. CIT(A) AND REITERATED HER CLAIM THAT STAMP DUTY VALUE CANNOT S UBSTITUTE THE ACTUAL CONSIDERATION AND THEREFORE THE DIFFERENCE CANNOT B E ADDED U/S. 69B OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE STRON GLY CONTENDED THAT THE AO HAS NOT CONFRONTED THE ASSESSEE WITH ANY COMPARA BLE CASES DURING THE COURSE OF THE ASSESSMENT. THE ASSESSEE ALSO FI LED AN ADDITIONAL EVIDENCE IN THE FORM OF A WRIT PETITION/PIL AGAINST THE SELLER AND ARGUED THAT THE SAID BUILDING WAS UNDER LITIGATION THEREFO RE ITS PRICE COULD NOT BE A REGULAR FAIR MARKET PRICE WHICH WAS ASCERTAINED B Y THE STAMP DUTY AUTHORITY. IT WAS FURTHER EXPLAINED THAT LITIGATED PROPERTY ALWAYS HAVE A LESSER VALUE AND THE OWNER LIKES TO SELL IT OFF IN THE BEST POSSIBLE RATE IT CAN GET. 5.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S, THE LD. CIT(A) OBSERVED THAT THERE IS A HUGE DIFFERENCE IN THE AMO UNT SHOWN TO HAVE EXPENDED BY THE ASSESSEE ON THE PURCHASE OF PROPERT Y AND THE AMOUNT VALUED BY THE STAMP DUTY AUTHORITY FOR THE SAME PRO PERTY. THE LD. CIT(A) OBSERVED THAT DURING THE APPELLATE PROCEEDIN GS, THE ASSESSEE HAS STRONGLY RELIED UPON THE PIL FILED AGAINST THE BUIL DER BY AN NGO. ACCORDING TO THE LD. CIT(A) BY SUBMITTING THE PIL A S EVIDENCE, THE ASSESSEE HAS AGREED TO THE FACT THAT THERE HAS BEEN UNDER VALUATION OF PROPERTY TRANSACTED WITH IN RESPECT OF THE SALE DEE D VIS--VIS THE MARKET RATE. THE LD. CIT(A) FURTHER OBSERVED THAT EVEN TH E PIL WAS NOT AGAINST THE PROPERTY BUT IT WAS AGAINST THE BUILDER THEREFO RE THE PIL COULD NOT HAVE AFFECTED THE MARKET VALUE OF THE PROPERTY. A FTER CONSIDERING ALL THESE FACTS, THE LD. CIT(A) FINALLY CONCLUDED THAT THERE IS NO INFIRMITY IN THE ORDER OF THE AO AND CONFIRMED THE ADDITIONS MAD E U/S. 69B OF THE ACT AT RS. 56,46,500/-. ITA NOS. 4508 & 3222/M/13 6 5.2. ON THE SECOND ADDITION OF RS. 50,00,000/-, THE REMAND REPORT WAS CALLED FROM THE AO. IT HAS BEEN STATED BY THE ADDL . COMMISSIONER OF INCOME TAX THAT A RECEIPT DT. 1.3.2012 CANNOT BE EV IDENCE FOR AN ASSESSMENT PROCEEDINGS THAT TOOK PLACE FOR A.Y. 200 8-09. THE AO WAS DIRECTED TO ASCERTAIN FROM THE ASSESSMENT RECORDS F ROM THE AO OF THE BUILDER. THE ENQUIRY REVEALED THAT THE BUILDER M/S . SONAM EARTHMOVERS & CONSTRUCTION PVT. LTD. HAS NOT FILED THE RETURNS FOR THE A.Y. 2004-05 TO 2011-12. THE RETURNS FOR A.Y. 2011-12 HAVE BEEN FI LED BUT THE NAME OF MS. PRIYA KOTHARI WAS NOT REFLECTED IN THE LIST OF SUNDRY DEBTORS OF M/S. SONAM EARTHMOVERS & CONSTRUCTION PVT. LTD. 5.3. AFTER CONSIDERING ALL THESE FACTS AND THE REMA ND REPORT, THE LD. CIT(A) OBSERVED THAT THE AO HAS NOT MADE FURTHER EN QUIRIES FROM THE AO OF THE BUILDER NOR ANY ENQUIRY WAS MADE FROM THE BANK CONCERNED. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE H AS NOW SUBMITTED THE CERTIFICATE OF THE CITY BANK WHICH CLEARLY SHOWS TH AT THE AMOUNT OF RS. 50,00,000/- WAS PAID TO M/S. SONAM EARTHMOVERS & CO NSTRUCTION PVT. LTD. ON 1.3.2012. THE LD. CIT(A) HAVING BEEN CONVI NCED DELETED THE ADDITION OF RS. 50,00,000/-. 6. THE ASSESSEE IS BEFORE US IN RESPECT OF THE FIRS T ADDITION OF RS. 56,46,500/- AND THE REVENUE IS BEFORE US AGAINST TH E DELETION OF ADDITION OF RS. 50,00,000/-. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AS THEY WERE PRESENTED BEFORE THE LOWER A UTHORITIES. IT IS THE SAY OF THE LD. COUNSEL THAT THE ENTIRE ADDITION HAS BEE N MADE SOLELY ON THE BASIS OF STAMP DUTY CHARGED BY THE COLLECTOR OF STA MPS ON THE AGREEMENT FOR SALE. OTHER THAN THIS NOTHING HAS BE EN BROUGHT ON RECORD WHICH COULD SUGGEST THAT THE ASSESSEE HAS PAID CONS IDERATION OVER AND ITA NOS. 4508 & 3222/M/13 7 ABOVE THE STATED CONSIDERATION. THE LD. COUNSEL ST RONGLY RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F K.P. VARGHESE VS ITO 131 ITR 597, ALLAHABAD HIGH COURT IN THE CASE O F CIT VS SMT. RAJ KUMARI VIMLA DEVI & ANR. 279 ITR 360, PUNJAB & HAR YANA HIGH COURT IN THE CASE OF CIT VS CHANDANI BHUCHAR 323 I TR 510, DELHI HIGH COURT IN THE CASE OF CIT VS KHOOBSURAT RESORTS 256 CTR 371 AND DELHI HIGH COURT IN THE CASE OF CIT VS DINESH JAIN HUF 352 ITR 629. 6.1. REGARDING THE SECOND ADDITION OF RS. 50,00,00 0/-, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE HAD PAID THE CONSIDERATION BY TWO CHEQUES OF RS. 10,00,000/- AND RS. 50,00,000/- EACH. IF THE CHEQUE OF RS. 50,00,000/- WAS NOT PRESENTED BY THE SELLER , THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THAT. THE LD. COUNSEL FURT HER ARGUED THAT ULTIMATELY ON 1.3.2012, A CONSIDERATION OF RS. 50,0 0,000/- WAS ACTUALLY PAID BY A DEMAND DRAFT THEREFORE THERE IS NO REASON FOR MAKING ADDITION U/S. 69B OF THE ACT. THE LD. COUNSEL FURTHER STATE D THAT SUSPICION OF THE REVENUE AUTHORITIES CANNOT BE SUBSTITUTED FOR THE E VIDENCES ON RECORD. THE LD. COUNSEL STATED THAT THOUGH THE AO HAS REFER RED TO COMPARABLE CASES BUT NO SUCH CASE WAS CONFRONTED TO THE ASSESS EE. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE AO. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE RELEVAN T MATERIAL EVIDENCES BROUGHT ON RECORD AND REFERRED TO IN THE LIGHT OF T HE INCOME TAX APPELLATE RULES 1963 RULE 18(6). IT IS AN UNDISPU TED FACT THAT ON AGREEMENT FOR SALE, THE ASSESSEE WAS REQUIRED TO PAY ADDITIONAL STAMP DUTY WHEN THE COLLECTOR OF STAMPS DETERMINED THE FA IR MARKET VALUE OF THE PROPERTY AT RS. 1,16,46,500/-. IT IS ALSO AN A DMITTED FACT THAT NOT ONLY ITA NOS. 4508 & 3222/M/13 8 THE ASSESSEE PAID THE ADDITIONAL STAMP DUTY BUT ALS O PAID THE PENALTY. THE ASSESSEE DID NOT APPEAL AGAINST THIS AND ACCEPT ED THE VALUE OF THE COLLECTOR OF STAMPS. HOWEVER, IT IS ALSO AN UNDISP UTED FACT THAT THOUGH THE AO AT PARA-4.2 OF HIS ASSESSMENT ORDER HAS REFE RRED TO VARIOUS COMPARABLE COMMERCIAL PROPERTIES BUT DID NOT CONFRO NT A SINGLE COMPARABLE CASE TO THE ASSESSEE NOR SUCH CASES HAVE BEEN BROUGHT ON RECORD. 8.1. LET US ALSO CONSIDER THE OTHER RELATED FACTS. THE ASSESSEE HAD PAID CONSIDERATION BY TWO CHEQUES OF RS. 10,00,000/- AND RS. 50,00,000/-. IT IS A FACT THAT ONLY CHEQUE OF RS. 10,00,000/- WAS P RESENTED AND CLEARED. THE OTHER CHEQUE OF RS. 50,00,000/- WAS NOT EVEN P RESENTED AND AS PER THE OBSERVATIONS OF THE AO AT PARA 4.10, THE ASSESS EE WAS NOT EVEN HAVING SUFFICIENT BALANCE BY WHICH THE CHEQUE OF RS . 50,00,000/- COULD HAVE BEEN CLEARED. THUS, IN FACT, THE ASSESSEE GOT THE POSSESSION OF A COMMERCIAL PROPERTY BY PAYING JUST RS. 10,00,000/-. THE PROPERTY IS SITUATED AT MALAD (W) ON S.V. ROAD, MUMBAI. BY ANY STRETCH OF IMAGINATION IN A PLACE LIKE MUMBAI, NO BUILDER WOUL D GIVE THE POSSESSION OF PROPERTY FOR A MEAGER AMOUNT OF RS. 1 0,00,000/- TO SOMEONE WHO IS NOT EVEN REMOTELY RELATED TO HIM , T HE PROPERTY OF WHICH THE FAIR MARKET VALUE WAS DETERMINED AT RS. 1.16 CR ORES. THE TEST OF HUMAN PROBABILITY AS LAID DOWN BY THE HONBLE SUPRE ME COURT IN THE CASE OF SUMATI DAYAL VS CIT 214 ITR 801 CLEARLY APP LIES ON THESE FACTS. ANOTHER FACT WHICH IS VERY ALARMING IS THAT THE AGR EEMENT FOR SALE WAS ENTERED ON 7 TH DECEMBER, 2007 AND WITHIN 6 DAYS I.E. ON 13.12.200 7, THE ASSESSEE LET OUT THE SAID PROPERTY TO AXIS BANK VID E LEAVE AND LICENSE AGREEMENT DT. 13.12.2007. THE ASSESSEE RECEIVED A S ECURITY DEPOSIT OF RS. 10,20,000/- ON 1.1.2008 AND RENT OF RS. 1,70,00 0/- PER MONTH FOR THE FIRST 3 YEARS AND RS. 1,95,000/- FOR THE NEXT 2 YEA RS. THESE UNDISPUTED ITA NOS. 4508 & 3222/M/13 9 FACTS SUGGEST THAT BY MERELY PAYING A SUM OF RS. 10 ,00,000/-, THE ASSESSEE WAS IN A POSITION TO GET A SECURITY DEPOS IT OF RS. 10,20,000/- AND RENT OF RS. 20,40,000 PER ANNUM. THESE FACTS A RE NOTHING SHORT OF RES IPSA LOQUITUR ,FACTS SPEAKING FOR THEMSELVES ,LOUD AND CLEAR, THAT THE ASSESSEE HAS UNDERSTATED THE TRANSACTION AND THE CO NSIDERATION HAVE BEEN PASSED OVER AND ABOVE WHAT HAS BEEN STATED. THE CO NTENTION OF THE ASSESSEE THAT THE PROPERTY WAS SUBJECT TO DISPUTE A S EVIDENCED BY WRIT PETITION/PIL DOES NOT SUPPORT THE CASE OF THE ASSES SEE INASMUCH AS THE SAID WP/PIL WAS AGAINST THE BUILDERS AND NOT AGAINS T THE PROPERTY. IF THE PROPERTY WAS UNDER DISPUTE, LEAVE ASIDE THE PURCHA SER , BY ANY STRETCH OF IMAGINATION A BANK OF THE STATURE OF AXIS BANK WOU LD NOT HAVE TAKEN THE PROPERTY ON RENT BY PAYING A DEPOSIT OF RS. 10,20, 000/- AND RENT OF RS. 1,70,000/- PER MONTH. THE AO WAS LEFT WITH NO OTHE R CHOICE BUT TO ACCEPT THE FAIR MARKET VALUE DETERMINED BY THE COLL ECTOR OF STAMPS AS THE PURCHASE CONSIDERATION. THEREFORE, CONSIDERING THE PECULIAR FACTS OF THE CASE, WE HAVE NO HESITATION IN CONFIRMING THE A DDITION OF RS. 56,46,500/- AS INVESTMENT NOT FULLY DISCLOSED IN TH E BOOKS OF ACCOUNT U/S. 69B OF THE ACT. APPEAL OF THE ASSESSEE IS ACC ORDINGLY DISMISSED. THE AR HAS RELIED UPON CERTAIN DECISIONS MENTIONED AT PARA 6 ABOVE. WE ARE NOT STATING THAT THE VALUE AS PER STAMP DUTY AU THORITY IS THE SALE CONSIDERATION BUT ON THE FACTS BEFORE US , CONSIDER ING THE SURROUNDING EVENTS , AND BY PREPONDERANCE OF PROBABILITIES , TH E AO WAS LEFT WITH NO CHOICE BUT TO ADOPT THE VALUE ADOPTED FOR STAMP DUT Y AS SALE CONSIDERATION . BECAUSE OF THE PECULIARITY OF THE F ACTS OF CASE, THE DECISIONS RELIED UPON BY THE AR ARE DISTINGUISHABLE . 9. LET US NOW CONSIDER THE GRIEVANCE OF THE REVENUE RAISED AS PER FIRST TWO GROUNDS AS PER PARA-3 ABOVE. BEFORE THE L D. CIT(A) THE ASSESSEE HAS FURNISHED CERTIFICATE FROM CITY BANK E VIDENCING THAT ITA NOS. 4508 & 3222/M/13 10 PAYMENT OF RS. 50,00,000/- WAS MADE ON 1.3.2012. W E FAIL TO UNDERSTAND HOW THIS COULD JUSTIFY THE PURCHASE OF P ROPERTY FOR RS. 10,00,000/- IN F.Y 2007-08. IT APPEARS THAT NOT ON LY THE LD. CIT(A) BUT ALSO THE AO HAS NOT APPRECIATED THE FACTS. THE ADD ITION HAS BEEN MADE BY THE AO U/S. 69B OF THE ACT. SECTION 69B READS A S UNDER: 69B. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE [ASSESSING] OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN AC QUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEED S THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAI NTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANA TION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFIC ER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.] 10. THE SINE-QUA- NON OF SECTION 69B IS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS AS MENTIONED IN THAT SECTIO N EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCO UNT MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAD CLAIMED TO HAVE PURCHAS ED THE PROPERTY FOR A CONSIDERATION OF RS. 60,00,000/-. TWO CHEQUES OF R S. 10,00,000/- AND RS. 50,00,000/- WERE TENDERED TO THE SELLER WHICH M EANS THAT THE ASSESSEE HAS ACCOUNTED THIS AMOUNT IN THE BOOKS OF ACCOUNT MAINTAINED, IF ANY. SINCE THE CONSIDERATION AS CLAIMED BY THE ASSESSEE IS FULLY RECORDED IN THE BOOKS , NOTWITHSTANDING THE FACT THAT CHEQUE OF RS. 50,00,000/- WAS NEVER PRESENTED THEREFORE NEVER CLEARED WOULD NOT IPSO FACTO ATTRACT THE PROVISIONS OF SEC. 69B OF THE ACT. IN OUR UNDERSTA NDING OF THE LAW, THE PROPER SECTION SHOULD HAVE BEEN SEC. 69C WHICH READ S AS UNDER: 69C. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURR ED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATIO N, IF ANY, OFFERED ITA NOS. 4508 & 3222/M/13 11 BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OF FICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THER EOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSES SEE FOR SUCH FINANCIAL YEAR :] 11. THE LD. CIT(A) HAS DELETED THE ADDITION ONLY BE CAUSE THE ASSESSEE COULD PRODUCE A CERTIFICATE FROM THE BANK THAT T HE AMOUNT OF RS. 50,00,000/- WAS ACTUALLY PAID ON 1.3.2012. THE LD. CIT(A) HAS GROSSLY ERRED IN ACCEPTING THIS CERTIFICATE FOR THE TRANSAC TION WHICH TOOK PLACE 4 YEARS AND 3 MONTHS AGO . THEREFORE, THE FINDINGS OF THE LD. CIT(A) ARE CLEARLY ERRONEOUS. IT WOULD BE BETTER TO CONSIDER OTHER RELATED AND VERY RELEVANT FACTS. WITHIN 6 DAYS OF THE PURCHASE OF P ROPERTY, THE ASSESSEE ENTERED INTO A LEAVE AND LICENSE AGREEMENT WITH AXI S BANK BY WHICH THE ASSESSEE GOT A DEPOSIT OF RS. 10,20,000/- AND RENT OF RS. 1,70,000/- PER MONTH FOR THE FIRST THREE YEARS AND RS. 1,95,00 0/- FOR THE NEXT TWO YEARS WHICH MEANS THAT IN F.Y. 2008-09 THE ASSESSEE GOT RENT FOR THREE MONTHS OF RS. 1,70,000/- PER MONTH TOTALING TO RS. 5,10,000/- , IN F.Y. 2009-10, THE ASSESSEE GOT ANNUAL RENT OF RS. 20,40, 000/-, IN F.Y 2010-11 ONCE AGAIN ANNUAL RENT OF RS. 20,40,000 AND IN F.Y 2011-12 ANNUAL RENT OF RS. 23,40,000/- AT THE RATE OF RS. 1,95,000/- PE R MONTH. THUS, THE TOTAL RENT RECEIVED BY THE ASSESSEE ON THE DATE OF MAKING THE PAYMENT TO THE BUILDER BY A DEMAND DRAFT WAS RS. 69,30,000/-. BY PREPONDERANCE OF PROBABILITIES , IT APPEARS THAT RS. 50,00,000/- PA ID IN 2012 MUST HAVE COME OUT OF THE RENT RECEIVED BY THE ASSESSEE TILL THAT DATE, WHICH MEANS THAT ON THE DATE OF PURCHASE EVEN THE AGREED CONSID ERATION WAS NOT FULLY PAID BY THE PURCHASER. THESE FACTS WHICH ARE SPEAK ING FOR THEMSELVES LOUD AND CLEAR SUGGEST THAT THE ASSESSEE HAD INCUR RED EXPENDITURE ON THE DATE OF PURCHASE AMOUNTING TO RS. 50,00,000/- WITHO UT HAVING PROPER BALANCE IN HER BANK ACCOUNT . BUT THEN , AS MENTION ED HEREINABOVE, THE ADDITION CANNOT BE MADE U/S. 69B OF THE ACT. WE, T HEREFORE RESTORE THIS ITA NOS. 4508 & 3222/M/13 12 ISSUE BACK TO THE FILES OF THE AO. THE AO IS DIREC TED TO DECIDE THIS PARTICULAR ISSUE AFRESH KEEPING IN MIND THE AFOREST ATED FACTS IN THE LIGHT OF THE PROVISIONS OF SEC. 69C OF THE ACT.THE AO IS ALS O DIRECTED TO VERIFY THE BANK ACCOUNT OF THE ASSESSEE FROM WHICH SHE TEN DERED THE CHEQUE OF RS.50 LACS AND WHETHER THE ASSESSEE WAS HAVING SUFF ICIENT BALANCE ON THAT DATE BY WHICH THE CHEQUE COULD HAVE BEEN HONORED BY THAT BANK .ALL THESE FACTS NEED VERIFICATION AT THE ASSESSMENT STA GE . FOR THIS PROPOSITION, WE DRAW SUPPORT FROM THE RATIO OF DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF KAPURCHAND SHRIMAL VS CIT 131 ITR 451, WHEREIN THE HONBLE SUPREME COURT HAS LAID DOWN TH E FOLLOWING RATIO: IT IS WELL KNOWN THAT AN APPELLATE AUTHORITY HAS T HE JURISDICTION AS WELL AS THE DUTY TO CORRECT ALL ERR ORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE, IF NECESSARY , APPROPRIATE DIRECTIONS TO THE AUTHORITY AGAINST WHOSE DECISION THE APPEAL IS PREFERRED TO DISPOSE OF THE WHOLE OR ANY PART OF TH E MATTER AFRESH, UNLESS FORBIDDEN FROM DOING SO BY STATUTE. 12. NEEDLESS TO MENTION THAT THE AO SHALL GIVE A RE ASONABLE AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. GROUND NO. 1 & 2 ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 13. NOW THEIR REMAINS ONLY ONE MORE GROUND IN REVEN UES APPEAL WHICH RELATES TO DELETION OF ADDITION OF RS. 11,20, 000/- MADE U/S. 68 OF THE ACT. 14. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PR OCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED LOAN FROM KR ISH SANJEEV KOTHARI. THE ASSESSEE WAS HIS NATURAL GUARDIAN . WHEN ASKED ABOUT THE SOURCE OF RS. 11,20,000/- IN THE HANDS OF HER SON, IT WAS EXP LAINED THAT THE SON HAS RECEIVED RS. 11,20,000/- FROM HIS FATHER SANJIV SHA SIKANT KOTHARI. THE ASSESSEE FILED THE DETAILS OF THE CHEQUES AND ALSO THE BANK STATEMENT ITA NOS. 4508 & 3222/M/13 13 ALONG WITH PAN CARD OF SHRI SANJIV SHASIKANT KOTHAR I. THE DETAILS OF THE BANK STATEMENTS ARE EXHIBITED AT PAGE-10 OF THE ASSESSMENT ORDER. A PERUSAL OF THE SAID BANK STATEMENT CLEARLY SHOWS TH AT SHRI SANJIV KOTHARI WAS VERY MUCH IN A POSITION TO GIVE 11 LAKHS TO HIS SON. THE LD. CIT(A) HAS VERY CORRECTLY APPRECIATED THESE FACTS AND DELE TED THE ADDITION OF RS. 11,20,000/-. 15. AFTER CONSIDERING THE FACTS ON RECORD, IN OUR H UMBLE OPINION, FINDINGS OF THE LD. CIT(A) ARE BASED ON FACTS AND T HEREFORE NO INTERFERENCE IS CALLED FOR. THIS GROUND OF THE REV ENUE IS ACCORDINGLY DISMISSED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED AND THE CROSS APPEAL FILED BY THE REVENUE IS ALLOWED IN PAR T FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2014 . ,%8 5 . + % 9 :, ; 29.01.2014 5 < SD/- SD/- (D. MANMOHAN ) (N.K. BILLAIYA) !'# /VICE PRESIDENT %+ ,- / ACCOUNTANT MEMBER MUMBAI; :, DATED 29.01.2014 . . ./ RJ , SR. PS ITA NOS. 4508 & 3222/M/13 14 ,%8 ,%8 ,%8 ,%8 5 55 5 26' 26' 26' 26' =%'.6 =%'.6 =%'.6 =%'.6 / COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. '?< 26 , , / DR, ITAT, MUMBAI 6. < @ / GUARD FILE. ,%8 ,%8 ,%8 ,%8 / BY ORDER, 3'6 26 //TRUE COPY// ! !! ! / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI