Prashantkumar Ashokbhai Buwa Vs ITO (ITAT Ahmedabad)
Cancelled Property Deal Cannot Trigger Section 69 Addition: ITAT Deletes ₹4.96 Lakh Unexplained Investment Addition
The Ahmedabad ITAT deleted addition of ₹4.96 lakh made under Section 69 read with Section 115BBE in relation to a cancelled property booking transaction, holding that the assessee had satisfactorily explained the source of payments and demonstrated that the deal itself was eventually cancelled.
The reassessment was initiated after survey proceedings conducted in the case of Samanvay Group allegedly revealed cash payment of ₹3 lakh by the assessee towards booking of a commercial unit in the “Samanvay Westbreeze” project. The Assessing Officer treated ₹7.26 lakh as unexplained investment comprising cash payment, bank payment and alleged unexplained balance consideration under the agreement to sale. The CIT(A) partly deleted the addition relating to bank loan component but sustained balance addition of ₹4.96 lakh.
Before the Tribunal, the assessee explained that the ₹3 lakh cash payment was arranged by family members on the occasion of Maha Shivratri and furnished affidavits and supporting bank records of family members. It was further demonstrated that the remaining amount alleged by the AO was never actually paid to the builder and that the transaction itself was subsequently cancelled through registered cancellation deed. The builder had refunded the amount after deductions and the related housing loan with HDFC Bank was also closed after repayment adjustments.
The ITAT observed that the assessee had furnished complete bifurcation and supporting evidence regarding each component of the alleged investment and that the lower authorities failed to properly appreciate these facts. Considering the affidavits, bank records and subsequent cancellation of the transaction, the Tribunal held that sustaining the addition under Section 69/115BBE was unjustified and accordingly deleted the balance addition in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
