The Jodhpur bench of the Income Tax Appellate Tribunal (ITAT) has recently held that the Assessing officer exceeded jurisdiction for making assessment in respect of acquisition of the property and deleted the addition made by the assessing officer.
Assessee Madhusoodan Paliwal’s return of income was was selected for limited scrutiny for the having large cash deposits in saving bank accounts and the assessee had also transferred one or more properties during the year. Thereafter, the assessing officer made addition in respect of unexplained cash deposit and unexplained investment of immovable property under Section 69 of the Income Tax Act.
Aggrieved assessee filed appeal before the CIT (A). The CIT(A) partly allowed the appeal. But the CIT(A) sustained the addition made under Section 69 of the Income Tax Act.
Assesee therafter filed a second appeal before the tribunal for sustaining the addition made under Section 69 of the Income Tax Act.
Sandeep Jhanwar, counsel for the assessee submitted that decision of the authorities below is contrary to the reasons for which the scrutiny was to be made. The scrutiny was related to transfer of the assets. However, the impugned addition has been made on the basis of acquisition of the property.
It was thus contented that the addition deserves to be deleted on this ground alone as the AO was not having necessary jurisdiction to scrutinize this item without prior approval of the Competent Authority.
S.M.Joshi council for the revenue submitted that the term “transfer of property” would include the “purchase of property” as well.
Assessing Authority exceeded its jurisdiction for makingassessment in respect of acquisition of the property by the assessee during the year.
Thereafter, the tribunal consisting Kul Bharat, (Judicial Member) and Manish Borad, (Accountant Member) allowed the appeal of the assessee and observed that Assessing Authority exceeded its jurisdiction for making assessment in respect of acquisition of the property by the assessee during the year.
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