The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad Bench, comprising Accountant Member Annapurna Gupta and Judicial Member Siddhartha Nautiyal, has granted a stay on the recovery of ₹45 lakhs from the appellant, who is contesting an addition made to her income on account of an alleged unexplained investment in land. The stay is effective for three months or until the disposal of her appeal, whichever comes first.
The appellant had sought relief from the tribunal after a tax demand was raised following an addition of ₹1.06 crore to her income for the assessment year 2015-16. This addition was based on the assertion that the appellant had made an unexplained investment in land during the relevant year. However, the appellant argued that the investment and related payments were made in the preceding year, a fact she claimed was not properly considered by the assessing authorities.
During the proceedings, the appellant’s counsel highlighted that she had already paid over 20% of the total tax demand, fulfilling the basic criterion for the grant of a stay under the provisions of Section 254(2A) of the Income Tax Act.
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Additionally, it was argued that the authorities had not given due consideration to the documentary evidence provided by the appellant, which indicated that the land transaction had been finalised in the previous year.
The counsel for the appellant further added that, “He therefore contended that the issue involved in the present case was a factual issue, which was clearly ascertainable from the documents already on record before the Revenue authorities and which clearly demonstrated both the facts as stated by the assessee of the documents for purchase of the land being executed and registered in the year preceding the impugned year, and payments also thereof being made in the preceding year.”
It was thus contended that the addition clearly was not justified.
The tribunal bench after reviewing the submissions and evidence, found merit in the appellant’s case, noting that she had a prima facie strong argument against the addition.
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Consequently, the tribunal directed the Income Tax Department to stay the recovery of the outstanding demand and scheduled the hearing of her appeal for September 17, 2024.
This decision offers the appellant temporary relief from the tax demand as she continues to challenge the addition before the tribunal.
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