Chandrakant Nemasao Palsapure Vs ITO (ITAT Nagpur)
The appeal concerns the order passed by the CIT(A)/National Faceless Appeal Centre for Assessment Year 2017–18 arising from reassessment proceedings under sections 147, 144 and 250 of the Income Tax Act, 1961. The assessee originally filed a return disclosing income of ₹4,81,690. The Assessing Officer initiated reassessment proceedings after receiving information that the assessee purchased immovable property worth ₹37,82,000 during the financial year and that the transaction was below market value, making section 56(2)(vii)(b) applicable. The AO formed the belief that income had escaped assessment and issued notice under section 148. In response, the assessee filed a return declaring the same income, following which notices under sections 143(2) and 142(1) were issued.
The AO called upon the assessee to explain the sources for the property purchase and provide relevant documentary evidence. The assessee submitted bank statements, the purchase agreement, the registered sale deed, and details of withdrawals and deposits. The AO was not satisfied, particularly with respect to cash deposits totaling ₹26,00,000 made in the assessee’s SBI account prior to payment for the property. The AO held that these deposits were unexplained and added them as unexplained money under section 69A.
On a second issue, the AO observed that the sale deed recorded payments of ₹1,50,000 on 12 August 2016 and ₹9,00,000 on 9 August 2016, which did not appear in the bank statement. These were treated as unexplained expenditure under section 69C, amounting to ₹11,00,000.
