SHRI UDAY AGNIHOTRI ,DHARWAD vs. INCOME TAX OFFICER WARD-2(1), HUBLI

In this appeal the, assessee has challenged the order of the AO whereby a sum of Rs.14,95,166/- was added to the total income of the assessee on account of un declared Long Term Capital Gain (LTCG) on sale of property. The facts are that at the time of survey in the case of the Assessee carried out u/s.133A of the Income Tax Act, 1961 (Act), an agreement for sale evidencing sale of shop No.7 and 8 for Rs.35 lakhs dated 25/6/2014 was found and impounded by the Revenue authorities. The assessee has subsequently sold the shops under a registered sale deed for the consideration shown in such sale deed was only for a sum of 7 lakhs. When confronted the assessee took a plea that the earlier agreement was cancelled and the revised sale consideration of Rs.7 lakhs alone was paid. This was not believed by the Revenue authorities and the LTCG on sale of the shops was worked out by the AO as follows:-

On appeal by the assessee, the CIT(A) confirmed the action of the AO. Before us the ld. Counsel for the assessee reiterated the submissions made before the revenue authorities.

We are of the view that in the light of the evidence in the form of sale agreement found in the course of survey showing that the consideration agreed between the parties was sum of Rs.35 lakhs and the fact that the same property was sold under a registered sale only for Rs.7 lakhs, cast a duty on the part of the Assessee to explain the discrepancy in the price of the property that was sold. There is no plausible explanation for reduction of the price by 80% between the price as agreed in the agreement of sale and the value as per the registered sale deed. In these circumstances, we are of the view that the addition made and confirmed by the revenue authorities are proper and call for no inference. Accordingly appeal by the assessee is dismissed.

In the result, the appeal is dismissed.