2021 (8) TMI 612 - AT - Income Tax

Appellate Tribunal rules in favor of assessee, overturning income addition related to property investment

Smt. Nitisha Agrawal Versus ITO, Ward-3 (2), Raipur

Smt. Nitisha Agrawal Versus ITO, Ward-3 (2), Raipur - TMI Issues:1. Addition of 50% share of investment in immovable property in the assessment.2. Confirmation of addition by the Commissioner of Income Tax (Appeals).3. Reopening of the case under section 147 based on AIR information.4. Assessment completed ex-parte due to non-compliance by the assessee.5. Discrepancy in payment details and sources of investment discussed in the assessment order.6. Verification of payment details and sources of investment in the husband's case.7. Appeal before the Appellate Tribunal challenging the addition.Issue 1: Addition of 50% share of investment in immovable propertyThe case involved the assessee's appeal against the addition of 50% share of investment in immovable property amounting to Rs. 65,79,375. The assessee contended that the entire investment was made by the spouse and explained the details of the property purchase. The AO added the entire consideration value to the income of the assessee, leading to the dispute.Issue 2: Confirmation of addition by the Commissioner of Income Tax (Appeals)The Commissioner of Income Tax (Appeals) confirmed the addition of Rs. 65,79,375, stating that the payment details and sources of investment were not adequately discussed. Despite the assessee's explanations and submission of relevant documents, the Commissioner upheld the 50% addition, prompting the appeal before the Tribunal.Issue 3: Reopening of the case under section 147 based on AIR informationThe case was reopened under section 147 due to information received through AIR that the assessee had purchased property worth Rs. 1.31 crore. The non-filing of the return, lack of compliance with notices, and incomplete documentation led to an ex-parte assessment by the AO, who also initiated penalty proceedings.Issue 4: Assessment completed ex-parte due to non-complianceDespite multiple notices and opportunities, the assessee did not comply with the requirements, resulting in an ex-parte assessment by the AO. The lack of timely explanations and documentation hindered the initial assessment process, leading to the disputed addition.Issue 5: Discrepancy in payment details and sources of investmentThe AO highlighted discrepancies in the payment details and sources of investment provided by the assessee, stating that the documents were incomplete and lacked essential information. This discrepancy raised doubts about the accuracy and completeness of the information provided during the assessment process.Issue 6: Verification of payment details and sources of investment in the husband's caseThe Tribunal reviewed the detailed payment schedule and sources of investment presented by the husband of the assessee. The Tribunal noted that the entire payment for the property in question was made by the husband, and a similar issue had been resolved in the husband's assessment without any addition.Issue 7: Appeal before the Appellate TribunalThe Appellate Tribunal, after considering submissions from both parties and reviewing the lower authorities' orders, allowed the appeal filed by the assessee. The Tribunal found that the entire payment for the disputed property was made by the husband, and the addition in the assessee's hands was unjustified based on the explanations provided and the factual discussions presented.This detailed analysis covers the key issues addressed in the legal judgment, outlining the progression of events, arguments presented, and the final decision of the Appellate Tribunal.