The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) deleted a Rs. 14 lakhs addition made by the Assessing Officer ( AO ) under section 69A of Income Tax Act,1961. The addition was based on incorrect information regarding a property transaction, where the AO mistakenly recorded the purchase price as Rs. 45 lakhs instead of the actual Rs. 31 lakhs.
Prameela Parameshwar,the appellant-assessee, had purchased an immovable property from Shri Madhava Gatti for Rs. 45 lakhs on 07/10/2017. The National e-Assessment Centre, Delhi, found that the assessee did not file her return of income for the assessment year 2018-19.
After receiving a notice under section 148, she claimed the purchase price was Rs. 31 lakhs and provided bank loan details. The assessment added Rs. 14 lakhs (Rs. 45 lakhs – Rs. 31 lakhs) as unexplained income under section 69A read with section 115BBE of the act.
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Dissatisfied with the assessment order dated 16/03/2023, the assessee appealed to the Commissioner of Income Tax(Appeals)[CIT(A)], who dismissed the appeal on 21/02/2024 under section 249(4) for not filing the return of income and not paying the advance tax.
The assessee’s counsel argued that the assessment was based on incorrect information, as the Rs. 45 lakhs sale was unrelated to the assessee. The actual transaction was for Rs. 31 lakhs. The counsel claimed advance tax was irrelevant due to the dispute over the addition and tax liability.
The tribunal noted that the AO added Rs. 14 lakhs under section 69A of the act. The assessee disputed this before the CIT(A), arguing that the information was incorrect and no advance tax was due. The tribunal found the CIT(A)’s invocation of section 249(4) to be erroneous and reviewed the relevant material and arguments.
The bench found that the AO initiated proceedings under section 148 based on incorrect information that the assessee purchased a property for Rs. 45 lakhs. The actual transaction, documented by the assessee, was for Rs. 31 lakhs, and the property in question was not owned by the assessee. It was also noted that the assessee provided proof of the loan from Vijaya Bank for the transaction.
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The two member bench comprising Yogesh Kumar U.S(Judicial Member) and Waseem Ahmed(Accountant Member) deleted the Rs. 14 lakhs addition made by the AO under section 69A and allowed the appeal filed by the assessee.
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