ACIT Vs Rutuja Projects (ITAT Hyderabad)
The Income Tax Appellate Tribunal (ITAT), Hyderabad, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting an addition of ₹1,05,96,934 made under Section 69 of the Income Tax Act on account of alleged unexplained investment. The Tribunal also allowed the assessee’s cross-objection supporting the CIT(A)’s order.
The assessee, a partnership firm engaged in the business of construction and development of residential flats, had filed its return for Assessment Year (AY) 2019-20 declaring an income of ₹1,000. Search proceedings were conducted in the case of another person, Dr. Amidyala Lingaiah, during which a loose sheet (Page-24 of Annexure A/LA/RES/01) was seized. The Assessing Officer (AO) considered the seized document to pertain to the assessee and initiated proceedings under Section 153C after recording satisfaction.
The AO relied on the contents of the seized document to conclude that the assessee had made unexplained investment in the purchase of two immovable properties. According to the AO, the document indicated that the assessee’s share in one property included cash payments constituting “on-money.” The AO also assumed that another nearby property purchased by the assessee had been acquired at the same rate per square yard and determined the assessee’s total unexplained investment at ₹1,05,96,934, which was added under Section 69.
