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Facts
The assessee purchased a property for Rs. 23,94,300/-. The Assessing Officer (AO) made an addition of Rs. 11,97,150/- (50% of consideration) and Rs. 18,16,000/- (50% of difference between circle rate and purchase price) under Section 69 of the Income Tax Act. The CIT(A) restricted the addition to Rs. 7,94,300/-.
Held
The Tribunal held that the assessee had explained the source of Rs. 8,00,000/- of the addition. Therefore, the addition was further restricted to Rs. 3,97,150/-.
Key Issues
Whether the additions made by the AO under Section 69 of the Act regarding unexplained investment in property are justified and whether the assessee has adequately explained the sources of investment.
Sections Cited
143(3), 147, 148, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, DELHI
Before: MS. MADHUMITA ROY
The instant appeal filed by the assessee is directed against the order passed by the Ld. CIT(A) NFAC, Delhi, dated 03.07.2024 arising out of the Assessment Order dated 19.11.2019 passed by the ITO,1(5) Sambhal, under Section 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2014-15.
The fact leading to the case is this that the assessee purchased a property lying and situated at Kanvalpur Sarai Tehsil for a total consideration of Rs.23,94,300/- out of which Rs.3,94,300/- was paid for the stamp duty on 24.07.2013 along with one Aquib Ur Rahaman. These circle rate of the said property is Rs.56,32,000/-. A non statutory notice for verification of the tax liability in that particular investment has been issued to the assessee and served upon him on 08.09.2018 but without any reply. Subsequently, upon getting approval from the joint Commissioner of Income Tax, Range-1, Moradabad dated 02.11.2018 the case was selected for scrutiny under Section 147 of the Act and notice accordingly under Section 148 of the Act was issued on 12.11.2018 and served upon the assessee on 22.11.2018 through notice server. Relevant to mention that the case was selected under Section 147 of the Act to examine the liability of “income from other sources” of the purchase of the said residential plot for consideration of Rs.30,13,150/- of the area of 703.25 square metre. Such reassessment was completed upon making addition of Rs.11,97,150/- bring 50% of the total amount of Rs.23,94,300/- under Section 69 of the Act being investment not recorded in the books of accounts and secondly Rs.18,16,000/- bring 50% of the difference amount of the circle rate of Rs.56,32,000/- the purchase price of Rs.20,00,000/-.
During the course of appellate proceeding these source of the investment was sought to be justified by the assessee whereupon the Ld. CIT(A) was satisfied to the extent of Rs.16,00,000/- and therefore, restricted the addition to Rs.07,94,300/- under Section 69 of the Act.
None appeared on behalf of the assessee at the time of call in spite of notice being served. On the other hand the Ld. DR relied upon the order passed by the authorities below.
As the addition made by the Ld. AO in the hands of the assessee being 50% of the total amount of consideration of Rs.23,94,300/- under Section 69 of the Act i.e. Rs.11,97,150/- and the assessee has been able to explain the source of Rs.8,00,000/- as his share, the addition to be restricted to 50% of Rs.7,94,300/- i.e. Rs.3,97,150/- being the share of the assessee. Such case made out by the assessee, keeping in view the factual aspect of the matter, appears to be acceptable and, therefore, the addition is restricted to Rs.3,97,150/- for the reason explained hereinabove.
Assessee’s appeal is, therefore, partly allowed.
Order pronounced in the open court on 16.06.2025