SWARNA TELLA,SECUNDERABAD vs. INCOME TAX OFFICER WARD-10(1), HYDERABAD.

PER VIJAY PAL RAO, VICE PRESIDENT:

This appeal by the assessee is directed against the Order dated 13.06.2026 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2017-2018.

3 Ita.No.2018/Hyd./2026 b) The learned CIT(A) failed to appreciate that the alleged of income, if any, pertained only to the capital gains arising on the appellant's share of sale consideration of Rs.16,91,780, which is below the monetary threshold of Rs.50,00,000/-, and therefore the assumption of jurisdiction under sections 147/148 beyond three years from the end of the relevant assessment year is without jurisdiction, bad in law, and liable to be quashed. 4. The learned CIT(A) erred in sustaining the addition of Rs.1,05,00,000 under section 69 read with section 115BBE without appreciating that the said amount represented the aggregate sale consideration of the property jointly sold by the appellant along with 4 co-owners and that the appellant's share therein was only Rs.16,91,780 as clearly mentioned in the registered sale deed itself filed before the Ld. CIT(A). 5. Without Causing Prejudice to the above grounds, the learned CIT(A) failed to appreciate that the appellant had acquired the property through a registered partition deed and subsequently transferred the same through a registered Sale Deed and therefore the impugned transaction, if at all taxable, could only be examined under the head "Capital Gains" with regard to appellant share of sale consideration as Rs. 16,91,780/- and not as unexplained investment under section 69. 6. The appellant craves leave to add, amend, modify, rescind, supplement or alter any or more grounds of appeal stated herein above either before or at the time of hearing of this appeal.”

4 Ita.No.2018/Hyd./2026 Income Tax Act [in short "the Act"], 1961 dated 22.03.2024 to assess the income escaped assessment on account of investment made in purchase of property to the tune of Rs.3.15 crores. In the re-assessment order, the Assessing Officer has made an addition on account of unexplained investment to the tune of Rs.1.05 crores by considering the fact that one transaction was reported thrice. The learned Authorised Representative of the Assessee has further submitted that there is no transaction of purchase of property by the assessee during the year under consideration and not even in the earlier year, but the assessee has sold a property during the year along with 04 other co-owners. Therefore, the assessee was having 1/5th share in the said property amounting to Rs.16,91,780/- out of the total sale consideration of Rs.1.05 crores. The learned Authorised Representative of the Assessee has also referred to the Partition Deed dated 26.02.2016 and submitted that the assessee got the share in the property as per the partition and therefore, there is no question of purchase of any property by the assessee. Thus, the learned Authorised

5 Ita.No.2018/Hyd./2026 Representative of the Assessee has submitted that despite this fact was explained by the assessee before the Assessing Officer as well as before the learned CIT(A) that there is no purchase transaction by the assessee but the transaction is only a sale of property wherein the assessee is having 1/5th share and the assessee’s share is specifically mentioned in the sale deed at Rs.16,91,780/-. Thus, he has pleaded that tax liability on this transaction can be calculated only on the share of sale consideration of the assessee under the Head “Capital Gain” whereas the Assessing Officer has made the addition on account of unexplained investment which is non- existing transaction. He has thus pleaded that the matter may be remanded to the record of the Assessing Officer for verification of the record and assessing the correct income in the hand of the assessee.

6 Ita.No.2018/Hyd./2026 the assessment order which has been confirmed by the learned CIT(A). He has relied upon the Orders of the authorities below.

7 Ita.No.2018/Hyd./2026 5.1. The Assessing Officer then ascertained the information about the property transaction by issuing notice u/sec.133(6) of the Act and thereafter has also taken into consideration the reply filed by the assessee explaining that the property was acquired by the assessee as per the partition deed dated 26.02.2016 and there is no purchase of property during the year. However, the Assessing Officer has maintained his stand and made addition of Rs.1.05 crores in Para no.4.6.4 as under:

“4.6.4. In view of the above detailed discussion and in the absence of substantiating replies with regard to purchase of property, purchase of property by the assessee for Rs.1,05,00,000/- on 16.10.2016 needs to be treated as unexplained investment. Accordingly, the assessment is completed by assessing Rs.1,05,00,000/- as unexplained investment u/s.69 read with section 115 BBE of the Act and taxed accordingly. (Variation u/s.69 Rs.1,05,00,000/-).”

5.2. This addition made by the Assessing Officer as unexplained investment is based on non-existing transaction. In fact, this amount of Rs.1.05 crores is sale consideration of the property sold by the assessee along with 04 other co-owners vide sale deed dated 14.10.2016. Thus, it

8 Ita.No.2018/Hyd./2026 is clear that the Assessing Officer took the sale transaction as investment made by the assessee and further, the entire sale consideration is assessed in the hand of the assessee as unexplained investment whereas the assessee’s share in the sale consideration is only 1/5th and specified in the sale deed at Rs.16,91,780/-. Therefore, the income if any, assessable to tax in the hand of the assessee on account of transaction of sale of property is capital gain and not unexplained investment. The learned CIT(A) has also confirmed the addition made by the Assessing Officer without verifying the correct nature of transaction and explanation of the assessee. Accordingly, in the facts and circumstances of the case, when the addition made by the Assessing Officer is based on non- existing transaction and are completely reversed transaction of sale of property instead of investment in the property, the impugned order of the learned CIT(A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after considering the correct facts emanating from the record being sale deed vide which the assessee sold the property along with 04 other co-owners.

9 Ita.No.2018/Hyd./2026 Needless to say, assessee be given an appropriate opportunity of hearing before passing the fresh order.

Order pronounced in the open Court on 09.09.2026.

Sd/- Sd/- MANJUNATHA G VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 09th day of September, 2026 VBP

10 Ita.No.2018/Hyd./2026

Copy to: SWARNA TELLA, C/O KATRAPATI & ASSOCIATES, 1-1-298/2/B/3, SOWBHAGYA 1 AVENUE APTS, 1ST FLOOR, FLAT NO.105, ASHOK NAGAR, STREET NO.1, HYDERABAD-500020, TELANGANA INCOME TAX OFFICER WARD-10(1), I.T.TOWERS, 2 A C GUARDS, MASAB TANK, HYDERABAD-500004, TELANGANA 3 THE PR. CIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD B-BENCH, HYDERABAD 5 GUARD FILE TRUE COPY Digitally signed VADREVU by VADREVU PRASADA RAO PRASADA ASSISTANT REGISTRAR / Date: I.T.A.T., HYDERABAD RAO 2026.09.09 11:32:03 +05'30'