Suraj Devi, New Delhi V. Dy. CIT, New Delhi

ITA 3451/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8105 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-07-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 19-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KISHORE
• Assessee Lawyers: V K AGGARWAL
• Keywords: Cost of acquisition
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SHRI R.P.TOLANI,JM AND SHRI K.D. RANJAN, A M I.T.A. NO.3451/DEL OF 2008 ASSESSMENT YEAR: 2005-06 SMT. SURAJ DEVI. DCIT, CENTRAL CIRCLE 8, 47/1 EAST PATEL NAGAR. VS NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.K. AGGARWAL DEPARTMENT BY : S HRI B. KISHORE ORDER PER R.P. TOLANI: JM THIS IS ASSESSEES APPEAL. VARIOUS GROUNDS ARE RAI SED WHICH IN EFFECT RAISE ONLY ONE ISSUE SHOWN IN GROUND NO.1 AS UNDER: 1(A) THE LD. CIT(AS) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING ADDITION OF RS.31,42,500/- AS UNDISCLOSED INVESTMENT IN PURCHASE OF PROPERTIES I.E. SHOP NO.101 AND UPPER FLOORS OF SHOP NO.101, 103 AND HALF OF SHOP NO.99, BANGLA SAHIB ROAD, NEW DELHI IN AN ENTIRELY ARBITRARY MANNER. (B) THE LD. CIT(A) HAS ALSO ERRED IN LAW AS WELL AS ON FACTS IN IGNORING THE FACT THAT THE SALE CONSIDERATION HAS NOT BEEN DISPUTED BY THE INCOME-TAX DEPARTMENT IN THE HANDS OF THE SELLER. 2 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE SEARCH WAS CONDUCTED IN ASSESSEES CASE ON 10.11.2005 CONSEQUE NT TO THE NOTICE U/S 153A WERE ISSUED. IN RESPONSE THERETO, RETURN OF I NCOME WAS FILED ON 23.7.2007, WHICH WAS SIMILAR TO ORIGINAL RETURN. I N THE YEAR IN QUESTION, ASSESSEE WITH OTHER CO-OWNER SHRI BHAGIRATH AGARWAL PURCHASED SHOP NO.101 I.E. GROUND FLOOR, BANGAL SAHIB ROAD, NEW DE LHI AND A FLAT ON FIRST FLOOR OF THAT PROPERTY FROM ONE SHRI ASHOK DEISH ON 8.2.2005. THE ASSESSEE PAID CONSIDERATION OF RS.31,25,000/- BEING HER HALF SHARE BY A REGISTERED DEED. THE SHOP WAS IN POSSESSION OF TENANT INDIAN O VERSEAS BANK AT THE TIME OF PURCHASE, THEREFORE, SYMBOLIC POSSESSION WAS TAK EN. THE FACT OF THE MATTER IS THAT THE SAID TENANT REMAINS IN POSSESSION DESPI TE EXPIRY OF LESE ON 30 TH MAY, 2007. THEREAFTER A DISPUTE IN THE TITLE OF TH E PROPERTY HAD ARISEN AND THE LAND & DEVELOPMENT OFFICE HAD REFUSED TO MUTATE THE PROPERTY IN THE NAME OF ASSESSEE. 3. DURING THE COURSE OF SEARCH WHAT THE DEPARTMENT RECOVERED WAS ONLY THE REGISTERED PURCHASE DEED. NO OTHER INCRIMINATI NG DOCUMENT WHATSOEVER WAS FOUND ON THE BASIS OF SUSPICION THAT THE MARKET VALUE OF THE PROPERTY IS MORE CAN BE RAISED, REFERENCE TO VALUATION CELL WAS MADE U/S 142(1A). ON THE BASIS OF DVO, THE MARKET VALUE OF THE PROPERTY HAS BEEN ESTIMATED AT RS.1,50,07,800/- AS AGAINST THE CONSIDERATION IN TE RMS OF REGISTERED DEED AT 3 RS.62,50,000/- ONLY RESULTING IN ADDITION OF RS.43, 78,900/- IN THE HANDS OF THE ASSESSEE. BEFORE THE DVO, VARIOUS OBJECTIONS W ERE RAISED BESIDES IT WAS POINTED OUT THAT VACANT POSSESSION OF THE SHOP WAS NOT GIVEN AS THERE WAS ALREADY A TENANT I.E. INDIAN OVERSEAS BANK. THE DV O FAILED TO CONSIDER THIS VITAL ASPECT THAT DUE TO PRESENCE OF A TENANT, THE MARKET VALUE OF THE PROPERTY IN DELHI IS SEVERELY DIMINISHED. APART FROM THIS, L EARNED COUNSEL VEHEMENTLY ARGUES THAT THERE IS NO MATERIAL WHATSOEVER WITH TH E DEPARTMENT TO COME TO A CONCLUSION THAT ANY ON MONEY WAS PAID BY THE ASSESS EE, CORRESPONDING ADDITION IN THE CASE OF VENDOR SHRI ASHOK DEISH HAS NOT BEEN MADE. THE COLLATERAL INSTANCES REFERRED TO BY DVO ARE IN RESP ECT OF VACANT POSSESSION PROPERTY BESIDES IN BETTER LOCALITY, THEREFORE, IT WAS CLAIMED THAT THE MATTER SHOULD NOT HAVE BEEN REFERRED TO VALUATION CELL U/S 141A AND IN ANY CASE, THE ADDITION IS NOT SUSTAINABLE ON MERITS IN VIEW OF TH IS DEFICIENCY. 4. LEARNED DR SUPPORTED THE ORDERS OF LOWER AUTHORI TIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. LEARNED DR COULD NOT DISPUTE THE ARGUMENT OF THE ASSERSSEE THAT ANY INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH. THERE IS NO OTHER CORROBORATING EVIDENCE TO SUBSTAN TIATE THE ADDITION IN RESPECT OF COST OF ACQUISITION OF ASSESSEES PROPER TY. THE DVO AND AO HAVE NOT CONSIDERED THE VITAL ASPECT OF PROPERTY BEING I N POSSESSION OF A TENANT. 4 SINCE THE ASSESSEES ARGUMENTS REMAIN UN-CONTROVERT ED, IN OUR CONSIDERED VIEW, THE ARGUMENTS OF LEARNED COUNSEL DESERVE MERI T. THE ADDITION HAS BEEN MADE ON PRESUMPTION RELYING ONLY ON THE REPORT OF D VO, WHICH MAY BE BINDING ON AO BUT WE HAVE TO EXAMINE THE INTRINSIC VALUE OF THE MERITS FOR THE ADDITION. IN OUR CONSIDERED VIEW, THE ADDITION MADE IS WITHOUT ANY CORROBORATING EVIDENCE, PROPER REASONS AND AN ESTIM ATE BEREFT OF ANY CORROBORATING EVIDENCE, WHICH IS MATERIAL FOR MAKIN G SUCH ADDITION. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, WE DELETE THE ADDITIONS MADE BY LOWER AUTHORITIES IN RESPECT OF THIS PROPERTY. 6. SINCE WE HAVE DELETED THE ADDITION ON MERITS, WE DO NOT ADVERT TO THE GROUND ABOUT VALIDITY OF VALUATION REFERENCE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JULY, 2009. SD/- SD/- (K.D. RANJAN) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH JULY, 2009 VIJAY COPY TO:- 1. APPELLANT. 2. RESPONDENT 3. CIT 4. CIT(A)-II, NEW DELHI. 5. THE DR ASSISTANT REGISTRAR.