No addition is to be incurred without making an independent inquiry from the related builder for the property purchase, the Income Tax Appellate Tribunal (ITAT) Delhi bench ruled.
The decision of deletion of addition which the CIT(A) stated is been kept by the bench.
When an investigation Wing of the department performs the investigation operation under section 132 of the Income Tax Act on the residential premises of the taxpayer then Karsan Bhai Khimabhai also comes under that.
Hence on the date 31.03.2018 before the assessee, a notice under section 153A of the Income Tax Act was been issued and duly served on the taxpayer and the taxpayer furnished his income return showing the Income of Rs 22,68,140. Post to that the assessing officer has formulated the assessment under Section 153A r.w.s. 144A of the Income Tax Act and performed different additions in regard to the property purchase without any investigation.
The taxpayer dissatisfied with the assessment order filed a petition before the CIT(A) who deleted the addition that the assessing officer made. Thus an additional appeal is been filed to the tribunal by the revenue.
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In front of the bench, Nirbhay Mehta, the representative for the taxpayer, stated that all relevant documents were provided, and a report was submitted to the assessing officer for review.
However, the counsel pointed out that the assessing officer added an amount without investigating the specifics of the property purchase. Waseem Arshad, representing the Revenue, supported the assessing officer’s decision.
During the tribunal proceedings, it was suggested that the assessing officer should have gathered evidence by inquiring with the builder involved in the transactions.
As a result, the bench concluded that the assessing officer’s decision to treat the entire sale consideration as an unexplained investment was not justified since no independent inquiry was conducted.
The two-member bench of N.K.Billaiya (Accountant Member) and Kul Bharat (Judicial Member) post acknowledging the facts dismissed the revenues appeal and witnessed that without making the independent inquiry from the related builder for the property purchase, AO has made all the additions.
| Case Title | Shri Karsan Bhai Khimabhai Vs. ACIT |
| Citation | ITA No.2016/Del/2021 [Assessment Year: 2011-12] |
| Date | 25.08.2023 |
| Appellant by | Shri Waseem Arshad, CIT DR |
| Respondent by | Shri Nirbhay Mehta, Adv. |
| Delhi High Court | Read Order |
