Case Law Details
ACIT Vs Rajmohan Appalacharya N. Chakravarty (ITAT Mumbai)
Introduction: In a landmark ruling dated January 17, 2024, the Income Tax Appellate Tribunal (ITAT) Mumbai delivered a significant judgment in the case of ACIT vs. Rajmohan Appalacharya N. Chakravarty. This case revolves around the crucial aspect of additions under Section 69 of the Income Tax Act, 1961, and whether such additions can be justified once the source of investment is adequately proven by the taxpayer. The ITAT Mumbai’s decision sheds light on the interpretation and application of Section 69, providing clarity and guidance on the matter.
Detailed Analysis
The dispute originated from an addition made by the Assessing Officer (AO) under Section 69 of the Income Tax Act, which was contested and subsequently deleted by the Commissioner of Income Tax (Appeals) (CIT(A)). The Revenue, dissatisfied with the CIT(A)’s decision, appealed to the ITAT Mumbai.
The respondent, Rajmohan Appalacharya N. Chakravarty, a Director of M/s. Span Tech Engineers Pvt. Ltd. (SEPL), was involved in acquiring leasehold rights from MIDC through an unregistered agreement in 2014, which was later formalized through a Deed of Assignment in 2017. The crux of the matter lay in the recording of the leasehold rights in the name of the respondent in his individual capacity, which was later claimed to be a bona fide mistake, corrected by another deed in 2021, assigning the rights to SEPL.
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