Ankit Kumar Vs ITO (ITAT Jaipur)
A Wrong Explanation Need Not Defeat a Genuine Investment When the Correct Source Is Already Embedded in the Record: ITAT Deletes Addition u/s 69 After AO Verifies Complete Money Trail
The Jaipur Bench of the Income Tax Appellate Tribunal has deleted an addition of ₹7,77,342 made u/s 69 after the AO, during verification directed by the Tribunal, accepted that the assessee had satisfactorily explained the investment made in an immovable property. Although the assessee had initially offered an incorrect explanation regarding adjustment of commission income, the documents supporting the correct explanation were already available before the AO.
The decision recognises that an addition cannot be sustained merely because the assessee’s earlier pleading was defective when the underlying documents establish the true source of investment.
Property Purchased for ₹18.15 Lakh
The assessee purchased Unit No. C-FF 12A in Capital Galleria, Alwar, for a total consideration of ₹18,15,216.
During assessment proceedings, he explained that ₹11 lakh had been financed through a housing loan from HDFC Bank and the balance amount of ₹7,15,216 represented commission income receivable from R-Tech Group, which had been adjusted against the purchase consideration.
The AO found that the alleged commission adjustment was not supported by the ledger account, vouchers, receipts or confirmation from R-Tech Group. He therefore treated ₹7,15,216 as investment from unexplained sources and made an addition u/s 69.
