Virendra K. Mehta v. Commissioner Of Income Tax - 13, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1608 OF 2010 Virendra K. Mehta Versus Commissioner of Income Tax - 13, Mumbai ..Appellant. ..Respondent. Mr.B.V. Jhaveri for the appellant.None for the respondent. CORAM : J.P. Devadhar & Smt.R.P. Sondurbaldota, JJ. DATE : 20[th] June, 2011. P.C. : 1.Whether the Income Tax Appellate Tribunal was justified in sustaining addition of Rs.70.86 lakhs made by the assessing officer as unexplained investment in acquiring the two flats being Flat Nos.401 and 402 ad-measuring 1785 square feet (carpet area) in a building known as Ganesh Ashish situated at Vileparle (West) is the question raised in this appeal. The claim of the assessee that he was a tenant and in lieu of his surrendering the tenanted premises, he has been given flats in question has been disbelieved by all the authorities below. (Appeals), as recorded in the order of the Income Tax Appellate Tribunal, reads thus : “3.1CIT (A) however observed that the assessee could not file any other evidence in the form of water bill, ration card in support of the tenancy. It was also observed by him that there was no evidence regarding transfer of tenancy. He did not believe that the land lady was unaware of transfer of tenancy as the tenancy right could not be surrendered without the permission of the land lord. The land lady being herself a builder cannot be expected to be unaware that tenancy rights could be transferred so easily and smoothly. In case the assessee was a tenant from 2000 there was no reason that the land lady will send a letter by RPAD to Shri Sachdev as late as on 27-9-2002 i.e. just before the building was to be demolished and nearly two years after the new tenant had been taken as tenant. It was unbelievable that somebody will forego his rights to take a new flat and leave without taking any payment. The rent receipt had been issued only from October 2000 that too for annual rent. It was stated in deed that prior to October 2000 the assessee was a monthly tenant but no receipt had been produced. CIT (A) also noted that electricity connection in the name of Shri Sachdeva had been disconnected in December, 2002 just before the permission to demolish the building was received on 20-1-2003. CIT (A) also noted that permission of the Municipal authorities to carry out development work was dated 20-1-2003 in response to the application dated 7-3-2002 of the land lady which meant that negotiations to demolish the building with tenant must have been initiated much before that. It was also noted that the assessee had not got allotment in the original scheme of approval of the building dated 20-1-2003 in which the permission had been granted to build only upto 3[rd ]floor. In case the assessee was genuine tenant his name should have been appeared in the original plan. He had been allotted flat on the fourth floor but permission to build 4[th] and 5[th] floor was given only on 3-9-2003 i.e. much after the demolition of the building. This showed that the story of tenancy was made after the agreement. Otherwise no tenant will agree to vacate the area when the so called alternate house was not existent in the original approved plan of the building. assessee opted for cash settlement and the cash paid was much less than the value of the house. Further the assessee was a new tenant and it was beyond imagination that the said property in a posh area like Vile Parle will be rented out at a monthly rent of Rs.75/-. CIT (A) also observed that judgment of Hon’ble Supreme Court in case of K.P. Vargese was not relevant to the facts of the case. He referred to the decision of Tribunal in case of Surendra Gupta in ITA No.2613/M/2003 in which the Tribunal had noted that the property being located in a posh locality at Bandra could not be let out on a poultry sum of Rs.500/- to Rs.800/- and the Tribunal in that case did not accept the genuineness of tenancy in the absence of proper evidence and held that the agreement was a sham and colorable transaction. CIT (A) considering the entire facts and circumstances concluded that there was no genuine tenancy and addition of Rs.70,86,956/- made by AO for acquisition of flat was upheld. Aggrieved by the said decision the assessee is in appeal before the Tribunal.” 3.The Tribunal while concurring with the findings recorded by the CIT (A), has held that in the present case all other tenants who were occupying tenanted premises in the demolished building have been paid Rs.20 lakhs each for vacating their premises in the old building, whereas the assessee who claims to be the tenant has been allotted two flats, the market value of which was about Rs.70 lakhs. The Tribunal has also noted that in the present case, permission for construction of the fourth floor in which the assessee had been allotted flats was given only on 3-9-2003, which shows that the assessee was not a genuine tenant and appeared to have come on the scene only after 3-9-2003 to acquire the flats. 4.In view of the concurrent finding of facts recorded by all the authorities below, to the effect that the assessee had produced bogus document to prove his tenancy and that the other documents furnished by the assessee do not reflect the genuine transaction between the parties, we see no reason to entertain this appeal. In our opinion, no substantial question of law arises from the order of the Tribunal. The appeal is accordingly dismissed with no order as to costs. (Smt.R.P. Sondurbaldota, J.) (J.P. Devadhar, J.)