AJIT JAYAPALA HEGDE,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX,,

The assessee has raised the following grounds of appeal:- 1. The learned The Deputy Commissioner of Income Tax, (Hq) (IV), Pune (the Assessing Officer) has erred in assessing total income returned by the Assessee of Rs.8,75,855/- at a higher amount of Rs.25,25,860/-. 2. The Deputy Commissioner of Income Tax, (Hq) (IV), Pune, has erred in making aggregate additions of Rs.16,50,000/- under pretext of unexplained amount of investment under provisions of Section 69B of the Income Tax Act, 1961 and Commissioner of Income Tax has erred in confirming the same.

The issue raised in the present appeal is against the addition made in the hands of assessee of ₹ 16,50,000/- on account of unexplained amount of investment under section 69B of the Act.

Briefly, in the facts of the case, the assessee had furnished return of income declaring total income of ₹ 8,75,855/-. The assessee derives salary from Royal Symphony Hotels Pvt. Ltd. as director. The assessee has also shown income from house property and interest from Saving Bank Account. During the year, action under section 132 of the Act was conducted in the case of Naiknavare Group, Pune. The assessee had purchased one flat i.e. Flat No.F-1102 in the project ‘Aloma Country’ constructed by the said group. During the course of search and seizure, certain loose papers were seized. In the noting of loose paper bundle at page Nos.41 and 42, Bundle No.3, it was found that the assessee had paid cash of ₹ 16,50,000/- over and above the agreement value to the builder. The assessee was show caused in this regard as to why sum of ₹ 16,50,000/- should not be added to the income of assessee. The assessee explained that the said flat was purchased along with his wife Mrs. Shammi Ajit Hegde for total consideration of ₹ 80 lakhs. The agreement for sale was entered into on 30.09.2011 and the same was registered on the same date. The assessee claimed that he had not made any payment over

The CIT(A) confirmed the addition made by Assessing Officer. Reference was made to page 42, seized during the course of search, wherein the details were noted in respect of flat which was sold by the builder but did not relate to the assessee. The CIT(A) observed that the discount for transaction was nominal at ₹ 50,000/- and cash payment of ₹ 16,50,000/- was the condition to purchase the flat. This simile was adopted in respect of notings at page 41 and the CIT(A) did not find any favour with the claim of assessee that ₹ 16,32,400/- was in the nature of discount. Upholding the order of Assessing Officer, the addition was confirmed in the hands of assessee, against which the assessee is in appeal.

The case of assessee before the Tribunal is that addition is not warranted in the hands of assessee. Attention was drawn to the seized document at page 41 which though mentions the name of Mr.Hegde but talks of

The learned Departmental Representative for the Revenue on the other hand, placed reliance on the order of CIT(A).

On perusal of record and after hearing both the learned Authorized Representatives, the issue which arises in the present appeal is in relation to the seized document found during the course of search on builder group. The assessee claims that on the date of agreement itself, the entire consideration was paid and discount allowed was normal to the trade. In respect of seized document, it was pointed out that the said document refers to a Flat which was different from the Flat purchased by the assessee. In the first instance, I perused the seized document and the copy of agreement to sell registered in the name of assessee. The two documents referred to different flats, even the area mentioned is different. Though the amount of ₹ 80 lakhs plus other charges which were mentioned, were the same, but the basis for making addition in the hands of assessee was the said seized document from the builders group. Once the basic facts of Tower and the area under consideration do not match, though name of Mr. Hegde is written on that sheet,

In the result, appeal of assessee is allowed.