₹1.33 Cr Section 69 Addition Remanded for Verification of 38 Lenders: ITAT Mumbai

Bharateshwar Bahubali Jinagna S.M.P. Tapagaccha Jain Trust Vs ITO (ITAT Mumbai)

Summary: The Mumbai Bench of the Income Tax Appellate Tribunal considered the assessee’s appeal against the order of the National Faceless Appeal Centre confirming an addition of ₹1,32,86,000 under section 69 read with section 115BBE of the Income-tax Act, 1961, in respect of an immovable property purchased for ₹1,25,00,000 with stamp duty of ₹7,86,000. The assessee, a public charitable trust registered under the Bombay Public Trusts Act, 1950, had declared total income of ₹5,710 and had subsequently obtained registration under section 12AA with effect from AY 2021-22.

The Assessing Officer noticed the property transaction from Form 61A furnished under section 285BA(1) and treated the entire investment as unexplained because the assessee had not furnished lender confirmations, PAN details, bank statements or evidence establishing the identity, creditworthiness and genuineness of the persons from whom loans aggregating to ₹1,32,21,000 were stated to have been received. Before the Tribunal, the assessee submitted that complete documentary evidence relating to 38 lenders, including income-tax returns, confirmations and bank statements/passbooks, could not earlier be furnished because the documents were still under compilation, and undertook to produce them.

The Tribunal noted that the requisite material had not been furnished before either lower authority and that sufficient cause for the earlier default had not been explained. Nevertheless, having regard to the nature of the controversy and the undertaking to furnish complete evidence, the Tribunal considered it appropriate in the interest of substantial justice to provide one effective opportunity to substantiate the explanation. It accordingly set aside the order of the CIT(A) and restored the matter to the Assessing Officer for fresh adjudication.