COMMISSIONER OF INCOME TAX Vs. RACHNA AGARWAL

JUDGEMENT

(1.) THE revenue is aggrieved by the order of the Income Tax Appellate Tribunal dated 02.05.2012 which upheld the order of the CIT (Appeals). That order had deleted the addition of Rs. 74 lakhs sought to be deduced by the Assessing Officer as unexplained investment.

(2.) IT is urged by the revenue that in the circumstances of the case, the AO could not be held to have fallen into error in valuing the property at Rs. 1.25 crores and consequently bringing the amount of Rs. 74 lakhs to tax.

(3.) THE Assessing Officer was of the opinion that property bearing No. 201 to 210, 15, Community Centre, Karkardooma, Delhi -92 shown to have been purchased for a consideration of Rs. 51 lakhs was not correctly valued. This was because it was let out to one M/s. CRR Capital Services Ltd. for a monthly rent of Rs. 3,10,114/ -. The assessee was asked to explain why the purchase price of the property be not determined on the basis of return on investment method and the difference be not treated as unexplained investment. Her response was that the property was acquired for the consideration shown in the sale deed. No other document was found to reflect the payment over and above the consideration disclosed to the authorities. During the course of the assessment, the AO referred the matter for valuation of the property under Section 142(A) of the IT Act. Apparently, the report was not available at the time of completion of assessment. Consequently, the AO estimated the purchase consideration of Rs. 1.25 crores and added Rs. 74 lacs as investment from undisclosed sources and sought to tax the same as unexplained investment. The assessee successfully appealed to the CIT (A). Aggrieved, the Revenue preferred an appeal to the Tribunal which by the impugned order, rejected it.