INCOME TAX ACT, 1961

Section 69

Income from undisclosed sources - Addition under section 69 - Unexplained investment - Assessee purchased old tenanted properties situated in slum areas

Assessee purchased two properties during year under consideration. Since there was huge difference in purchase price and circle rate, AO asked the assessee to explain with evidence as to how the properties were purchased at such a lower value as against the higher circle rate. In response to the same, assessee filed an explanation to substantiate the difference in the value; however, the AO was not satisfied with the explanation given by the assessee. He referred the matter to DVO for obtaining a report on the valuation of the properties. He also confronted seller of the properties and recorded his statement under section 131. After considering the report of the DVO and the statement given by the seller, the AO made addition under section 69 on account of unexplained investment. Further, CIT (A) gave part relief to the assessee by directing the AO to give 15% rebate. Held: Since assessee purchased old tenanted properties situated in slum areas, filed copies of sale deeds of properties in similar vicinity at about the same time, which were sold at price below the circle rate, also filed valuation report of registered valuer and the seller of the properties appeared before the AO and confirmed to have sold the properties at the price mentioned in the sale deed only and there was no material available that the assessee paid anything more than what was mentioned in the sale deed, no addition was warranted by invoking provisions of section 69 and hence, such addition was deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

SUBSCRIBE FOR FULL CONTENT