September 2019

Section 69 No addition u/s 69 could be made in year under consideration in respect of investment in immovable property made in earlier year(s)

Jagdish T.Punjabi | Devendra Jain | Tejaswini Ghag
Chartered Accountants

27.  [2019] 200 TTJ (Del.) 375 Km. Preeti Singh vs. ITO ITA No. 6909/Del./2014 A.Y.: 2009-10 Date of order: 31st October, 2018;

 

Section 69 No addition u/s 69 could be made in year under consideration in respect of investment in immovable property made in earlier year(s)

 

FACTS

The AO made an addition of Rs. 55.39 lakhs while completing the assessment, being the entire amount of investment in immovable property. The aforesaid amount of Rs. 55.39 lakhs consisted of cost of property of Rs. 51.86 lakhs and stamp duty of Rs. 3.53 lakhs. The investment made by the assessee during the year under consideration was only Rs. 12.58 lakhs. The remaining amount of investment was made in the earlier year(s) for which no addition could be made in the year under consideration. The assessee  submitted that the aforesaid investment of Rs. 12.58 lakhs during this year included Rs. 6.05 lakhs by cheque out of the assessee's bank account and a payment of Rs. 6.53 lakhs made in cash. The assessee provided copies of the accounts from the books of the builder from whom the property was purchased. She also provided copies of statements of bank accounts. The assessee showed that there were sufficient deposits in her bank accounts carried forward from the earlier year to explain the source of the aforesaid cheques. The brought forward opening balance at the beginning of the year in the bank accounts of the assessee had accumulated over a period of time in the past few years.

 

On appeal, the CIT(A) upheld the addition of Rs. 38.58 lakhs out of the aforesaid addition of Rs. 55.39 lakhs made by the AO.

 

HELD

The Tribunal held that on perusal of section 4(1), it was obvious that in the year under consideration no addition could be made in respect of investments in property made by the assessee in earlier years or in respect of deposits in bank accounts of the assessee made in the

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