M/s Shah Realtors Vs. ACIT (ITAT Mumbai)
It is settled law that the onus to claim that apparent is not real is on one who so claims. In our view, when the Assessing Officer requires the assessee to show-cause as to why there is difference between two purchasers and that the assessee offered explanation, no addition can be made simply discarding his explanation. There must be something concrete evidence to show that the version given by assessee is not correct. It is settled law that no addition can be made on hypothetical basis or presuming a higher sale price by simply rejecting the contention without cogent reason. Moreover, the higher rate of building No.3 was disclosed by assessee in his books of accounts, rather it was not discovered by the assessing officer. In our view the addition was made by assessing officer merely on assumption and presumption basis and without any evidence.
The Hon’ble Supreme Court, in K.P. Varghese v. ITO (supra) in context of Sub-section (2) of Section 52 held that it can be invoked only where the consideration for the transfer has been understated by the assessee or, in other words, the consideration actually received by the assessee is more than is declared or disclosed by him and the burden of proving such an understatement or concealment is on the Revenue. Sub-s. (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him, and there is no concealment or suppression of the consideration. Similar view was taken in CIT Vs Shivakami Co. (P.) Ltd. [1986] 159 ITR 71/25 Taxman 80K (SC) and in CIT v. Godavari Corporation Ltd. [1993] 200 ITR 567/68 Taxman 344 by holding that the burden is on the Revenue to prove under-statement of the consideration. Further, the Hon’ble Kerala High Court in CIT v. M.J. Cherian [1979] 117 ITR 371 has held that the ITO cannot fix higher sales price without any evidence. The mere presumption that the excess price could have been charged has been held to be not a ground for coming to the conclusion that the assessee did charge a higher price. In view of the above factual and legal discussion the assessing officer was not justified in making the addition without any evidence, therefore, the grounds of appeal raised by the assessee are allowed.
