JAGDISHBHAI PRABHUDAS PATEL,GUJARAT vs. ITO WARD 1, HIMATNAGAR, GUJARAT

During the course of assessment proceedings, it was observed that the assessee had made total payments of Rs.12,75,000/- towards purchase of two immovable properties (Rs.7,00,000/- and Rs.5,75,000/- respectively). Out of the said total consideration, Rs.3,50,000/- was stated to have been paid through banking channel out of past savings from agricultural activities, whereas the remaining ₹9,25,000/- was paid in cash stated to be sourced from sale of agricultural produce. The Assessing Officer, however, observed that the assessee failed to furnish supporting documentary evidences such as bank statements, cash book for preceding and current years, bills, receipts, vouchers, or other relevant records to substantiate the availability of cash and its utilisation for the said investment. In the absence of satisfactory explanation and supporting evidence, the Assessing Officer treated the cash investment of Rs.9,25,000/- as unexplained investment under section 69 of the Act and added the same to the total income of the assessee. The said addition was confirmed by the learned CIT(A).

At the time of hearing, Ld. Counsel for the assessee submitted the following documents to substantiate its claim.

Heard the argument of both the parties and perused the material available on record.

The sole issue involved in the present appeal relates to addition of Rs.9,25,000/- made under section 69 of the Act on account of alleged unexplained investment in purchase of immovable property. The assessee has claimed that the cash component of investment was sourced out of agricultural income from sale of agricultural produce and past savings. In support of the claim, the assessee has furnished all the documents such as agricultural sales bills, ownership/land records for the relevant land parcels, and a Talati certificate indicating landholding details. In the interest of justice, I am of the view that the matter requires fresh verification by the Jurisdictional Assessing Officer. Accordingly, we set aside the impugned addition of Rs.9,25,000/- made under section 69 of the Act and restore the issue to the file of the jurisdictional Assessing Officer for de novo adjudication.

In the result, the appeal of the assessee is allowed for statistical purposes.