The Income Tax Appellate Tribunal (ITAT) Delhi bench held that no addition should be made without making independent inquiry from concerned builder regarding the purchase of the property.
Therefore the bench upheld the decision of deletion of addition done by the CIT(A).
When a search and seizure operation under Section 132 of the Income Tax Act was conducted by the Investigation Wing of the Department on the residential premises of the assessee, Karsan Bhai Khimabhai were also covered.
Thereafter, a notice under Section 153A of the Income Tax Act was issued to the assessee on 31.03.2018 and duly served upon the assessee and assessee filed his return of income, declaring income of INR 22,68,140. The Assessing Officer thereafter, framed the assessment under Section 153A r.w.s. 144A of the Income Tax Act and made various additions in respect of purchase of property without enquiry.
Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A), who deleted the addition made by the assessing officer. Therefore the revenue filed another appeal before the tribunal.
Before the bench, Nirbhay Mehta, counsel for the assessee submitted that the assessee produced all documents and remand the report before the assessing officer.
However, without enquiring the details of the builders regarding the purchase of property, the AO made addition, the counsel added.
Waseem Arshad, appearing for the Revenue supported the order of assessing officers.
During the proceedings tribunal suggested that AO ought to have brought some evidence by making inquiry from the concerned builder about the transactions.
Thus, the bench observed that the AO, without making independent inquiry, was not justified in treating the total sale consideration as unexplained investment.
After considering the facts submitted by both parties, the two member bench of N.K.Billaiya (Accountant Member) and Kul Bharat (Judicial Member) dismissed the appeal filed by the revenue and observed that without making independent inquiry from concerned builder regarding the purchase of the property, AO had made all the additions.
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