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Before: Shri Duvvuru RL Reddy & Shri S. Jayaraman
O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 10, Chennai, dated 09.11.2018 relevant to the assessment year 2013-14. The only effective ground raised in the appeal of the assessee relates to confirmation of addition of ₹.25 lakhs as unexplained investment.
Brief facts of the case are that the assessee filed her return of income on 02.12.2013 for the assessment year 2013-14 declaring total income of ₹.3,53,450/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. Subsequently, the case was selected for scrutiny and called for various details by issuing statutory notices. In response to the statutory notices, the AR of the assessee filed the details as called for. As per AIR information, the assessee had purchased a house property situated at Plot No. 53, 19th Street, Sri Krishna Nagar, Maduravoyal, Chennai 600 095 measuring an extent of 2400 sq. ft. land with building for a consideration of ₹.1,15,00,000/-. The assessee had availed a loan for ₹.90,00,000/- from Sundaram BNP Paribas Home Finance Limited, Chennai and the balance of ₹.25,00,000/- borne and paid by the assessee herself in cash. On perusal of balance sheet of the assesse as well as copies of the returns of income of the assessee as well as her husband Shri Satheesh Babu, against the query raised by the Assessing Officer, the assessee could not explain how the accumulated investment in the house property has been made out of the books of accounts and the source becomes the undisclosed income of the assessee. Since the entire activity has been done outside the books of accounts and thus, the amount paid in cash by the assessee to the tune of ₹.25 lakhs was added to the total income of the assessee. On appeal, against the submissions of the assessee that she has not paid the amount of ₹.25 lakhs as mentioned in the purchase deed and no supporting evidence was brought on record, the ld. CIT(A) confirmed the addition.
4. On being aggrieved, the assessee is in appeal before the Tribunal. By filing copy of registered “Deed of Rectification cum Amendment” document, the ld. Counsel for the assessee has submitted that over and above the books of accounts as well as bank account, neither the assessee had any amount nor paid the amount of ₹.25 lakhs. It was the submission that by overstating the sale consideration in the sale deed, the assessee has availed loan ₹.90,00,000/- from Sundaram BNP Paribas Home Finance Limited, Chennai by giving a market rate figure in the sale deed for the purpose of retrieving the property of her mother who has taken loan from the P/A holder on various occasions in various years. Thereafter, the assessee has rectified and amended the sale deed and duly registered the deed of rectification cum amendment for all purposes. Thus, the ld. Counsel prayed for deleting the addition made as unexplained investment. Per contra, the ld. DR strongly supported the order passed by the ld. CIT(A).
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the addition towards unexplained investment of ₹.25 lakhs, the ld. CIT(A) confirmed the addition on the ground that the assessee has not furnished any supporting evidence over and above the sale deed, wherein, it was mentioned that the sale consideration of the property was ₹.1,15,00,000/-, which includes ₹.90 lakhs by way of cheque drawn at HDFC bank through M/s. Sundaram BNP Paribas Home Finance Ltd. and ₹.25 lakhs as cash. In this case, the assessee is the daughter of Vendor of the property purchased by the assessee. Before us, it was stated that by overstating the sale consideration in the sale deed, the assessee has availed loan ₹.90,00,000/- from Sundaram BNP Paribas Home Finance Limited, Chennai by giving a market rate figure in the sale deed for the purpose of retrieving the property of her mother who has taken loan from the P/A holder on various occasions in various years. The payment of ₹.90 lakhs was not in dispute. During the course of assessment proceedings, on verification of the financial statements of the assessee, the Assessing Officer has not found any undisclosed investment and had no evidence/reason for the amount of ₹.25 lakhs stated in the original registered sale deed dated 28.01.2013 to have been paid by the assessee. The assessee has rectified and amended the sale deed and duly registered the deed of rectification cum amendment for all purposes vide document No. 1732 of 2020 dated 16.03.2020 and the deed of rectification cum amendment witnesseth as follows: “1. In the sale deed dated 28.01.2013 (registered document No. 527 of 2013 in the office of Sub-Registrar at Virugambakkam), the figure “₹.1,15,00,000 (Rupees One Crore Fifteen Lakhs only)” mentioned in page No. 5, second Paragraph shall be deleted and be substituted with the figure “₹.91,00,000 (Ninety One Lakhs rupees Only)”. 2. Similarly, the figure “₹.1,15,00,000 (Rupees One Crore Fifteen Lakhs only)” mentioned in page 6, First paragraph shall be deleted and be substituted with the figure “₹.91,00,000 (Ninety One Lakhs rupees Only)”.
Similarly, the figure “₹.25,00,000/- (Rupees Twenty Five Lakhs only)” mentioned in page 6, clause (a) shall be deleted and be substituted with the figure “₹.1,00,000 (Rupees One Lakh Only)”.
In page 13 of the sale deed below the existing paragraph, the following paragraph shall be added: “THIS SALE DEED FURTHER WITNESSETH The Parties hereby state and declare that the Vendor is the mother of the Purchaser, and the Vendor decided to sell the Schedule property to the purchaser, being her own daughter, at a concessional rate and therefore the ale was effected for a consideration of ₹.91,00,000/- (Rupees Ninety One Lakhs) Only.”
5. Save as provided for herein the contents of the said Sale deed dated 28.01.2013 (registered as document No. 527/2013 in the office of Sub-Registrar, Virugambakkam) shall remain intact without any changes.
6. No right or interest in any immovable property is created, enlarged or transferred under this instrument. The executants specifically state that no extra land or any interest in any land is transferred or conveyed by virtue of this rectification deed.
7. The Vendor Rectifier states that it has not received any consideration from any one for executing this deed.
The Parties state that they don’t intent seeking any refund of stamp duty as the correct stamp duty has been paid on the guideline value of the property as on date.”
From the above registered Deed of Rectification cum Amendment document, it is clear that the actual sale consideration of property was only ₹.91,00,000/- given to the vendor and that no other amount over and above the said amount was passed on to the assessee’s mother. Therefore, assuming the jurisdiction, we hereby delete the addition of ₹.25 lakhs made by the Assessing Officer treating the same as unexplained investment in the property.
In the result, the appeal filed by the assessee is allowed. Order pronounced on the 9th April, 2021 in Chennai.