ACIT Vs Biharibhai Gokalbhai Patel (ITAT Ahmedabad)
ITAT Deletes Section 69 Addition Because Registration Year Is Not Year of Investment; Revenue Appeal Rejected Because Documentary Evidence Explained Investments and Deposits; Section 69 Addition Cannot Survive When Actual Investment Belongs to Earlier Assessment Year; ITAT Upholds Deletion of Unexplained Investment Addition Due to Verified Bank Records.
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 28.11.2025 for Assessment Year (A.Y.) 2016-17, challenging the deletion of additions aggregating to ₹2,04,97,450 made under Section 69 of the Income-tax Act. The additions related to investments in two immovable properties, deposits of ₹80,00,000 in an SBI account, and cash deposits of ₹41,96,550 in an ICICI Bank account.
The assessee, a non-resident individual, had filed a return declaring income of ₹14,09,610. During limited scrutiny, the Assessing Officer (AO) noticed purchases of two immovable properties, deposits in the SBI account, and cash deposits in the ICICI Bank account. As the assessee did not furnish explanations or documentary evidence during assessment proceedings, the AO treated the entire amount of ₹2,04,97,450 as unexplained investment under Section 69 and completed the assessment accordingly.
In appeal, the assessee produced additional evidence. The matter had earlier been remanded by the ITAT to the CIT(A) for fresh adjudication after considering the remand report and the additional evidence. During the second round, the assessee contended that payments for the two immovable properties had actually been made in Financial Year 2013-14, relevant to A.Y. 2014-15, through banking channels, and not during A.Y. 2016-17 when the sale deeds were registered. The assessee argued that Section 69 applies in the year of actual investment and not in the year of registration.
