Case Law Details
Bharat Jaroli Vs PCIT (ITAT Indore)
The case of Bharat Jaroli vs PCIT, adjudicated by the ITAT in Indore, revolves around the failure of the Assessing Officer (AO) to properly scrutinize cash payments made by the assessee under Section 40A of the Income-tax Act, 1961. This article delves into the detailed analysis and the ultimate conclusion reached by the tribunal.
The appeal was filed by the assessee against the revision order dated 19th March, 2019, passed by the Principal Commissioner of Income-tax (PCIT) under Section 263 for the assessment year 2014-15. The appeal faced a delay of 62 days, which the assessee explained as being due to ongoing litigation regarding the purchase of land.
The crux of the matter lies in the AO’s failure to conduct a thorough inquiry into the cash payments made by the assessee for the purchase of immovable property (land) under Section 40A(3). Despite the genuineness of the payments and the identity of the payee not being disputed by the Department, the AO did not address the issue in the assessment proceedings.
During the assessment proceedings, the assessee provided books of accounts and records, and it was noted that cash payments were made as per the demand of the seller, as recorded in the purchase deed. However, the AO did not delve into this matter, leading to the PCIT initiating proceedings under Section 263.
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