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Income Tax Appellate Tribunal, DELHI BENCHES : SMC-II : NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
ORDER This is an appeal by the assessee directed against the order of the CIT(A)-XXII, New Delhi, dated 7.4.2014 for the assessment year 2008- 09.
The assessee is an individual and derives income from salary, house property and remuneration from a partnership firm. During the year, the assessee purchased two plots in sector 18, Sanpada, Navi Mumbai on 3.7.2007 for Rs.25,41,000/-. As per registered purchase deed filed, the market value of the property has been shown as Rs.38,22,000/- by the registering authority for the purpose of charge of stamp duty. The AO added the difference of Rs.12,81,000/- as unexplained investment u/s 69B. Aggrieved, the assessee carried the matter before the first appellate authority without success. Further aggrieved, the assessee is before us.
After hearing the rival contentions, we find that the revenue has no material whatsoever to hold that the assessee has invested more than Rs.25,41,000/- for the purchase of the above property. Section 50C can be invoked only in the case of computation of capital gains under Chapter XIV. Section 50C cannot be invoked for applying section 69B of the Act. The Hon’ble Delhi High Court in the case of CIT vs. Khoobsurat Resorts (P) Ltd. in of 2011 vide its judgment dated 5th November, 2012, has held that the fiction created by virtue of Section 50C applies only in respect of escaped income of a seller, for the 2 determination of the true capital gain. It cannot be invoked by the revenue unless there is an understatement of consideration in respect of the transfer and the burden of showing that there is such understatement is on the revenue for applying the provision on the purchaser.
The Hon’ble Allahabad High Court in the case of CIT vs. Smt. Raj Kumari Vimla Devi & Anr. (2005) 279 ITR 360 (All), held as follows:-
“Value of properties for stamp duty purposes cannot be treated as fair market value, and therefore, the difference between the said amount and the sale consideration cannot be charged to tax as deemed gift.”
The Hon’ble Delhi High Court in of 2012, in the case of CIT vs. Sadhna Gupta, vide its judgment dated 6.3.2013, at para 5, has held as follows:-
“5. The law seems to be well settled that unless and until there is some other evidence to indicate that extra consideration had flowed in the transaction of purchase of property, the report of the DVO cannot form the basis of any addition on the part of the revenue. In the present case there is no evidence other than the report of the DVO and, therefore, the same cannot be relied upon for making an addition. In these circumstances, the question which has been framed is decided in favour of the assessee and against the revenue. The appeal is dismissed.”
In the case of CIT vs. Puneet Sabharwal (2011) 338 ITR 485 (Del), the Hon’ble Delhi High Court judgement was consistent with the view of the Hon’ble Delhi High Court cited above.
In view of the above, the addition is ordered to be deleted.
In the result, the appeal of the assessee is allowed.
The order pronounced in the open court on 04.11.2015.