Chaitalee Sachin Deokar Vs CIT (ITAT Mumbai)
In a relief for a taxpayer, the Income Tax Appellate Tribunal (ITAT), Mumbai bench, has quashed a revisional order by the Commissioner of Income Tax (CIT) that had sought to reopen an assessment based on alleged “on-money” paid for a flat purchase. The Tribunal held that the original assessment was not flawed in a way that would justify the CIT’s intervention, citing a previous tribunal ruling.
The case involves Ms. Chaitalee Sachin Deokar and pertains to the assessment year 2013-14. Ms. Deokar had originally filed her income tax return declaring an income of ₹4,32,400. Subsequently, reassessment proceedings were initiated against her after tax authorities received information from a search action conducted in the case of a developer, Bhagawati Developer.
The information suggested that Ms. Deokar had paid a total consideration of ₹60,81,875 for a flat, which included an alleged cash component, or “on-money,” of ₹25,81,875 over and above the agreement value of ₹35,00,000.
During the reassessment proceedings conducted by the Assessing Officer (AO), Ms. Deokar strongly denied making any cash payment or “on-money” for the flat. She contended that the agreement value of ₹35,00,000 was already significantly higher than the market value at the time (claimed to be ₹21,78,000) and questioned why she would pay an even more exorbitant total price. She also argued that an addition could not be made solely based on documents found in a third party’s office.
