Unexplained investment in plot purchase upheld under section 69 despite sale deed registered in subsequent year

ITAT Pune upheld addition under section 69 for unexplained investment in plot purchase. Survey at developer's premises revealed on-money payments by various purchasers including assessee. Other plot buyers disclosed similar payments under Income Declaration Scheme 2016. Tribunal rejected assessee's argument that addition should be made in subsequent year when sale deed was registered, holding that section 69 applies in the year of making unrecorded investment, not when transaction completes. Addition of Rs. 37 lakh on-money payment was confirmed as assessee failed to provide satisfactory explanation and amount was not recorded in books. Appeal dismissed.

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Issues:
The judgment involves the challenge of initiation of re-assessment proceedings and the confirmation of addition made under section 69 of the Income-tax Act, 1961 for unexplained investment in the purchase of a plot.

Initiation of Re-assessment Proceedings:
The first ground challenging the initiation of re-assessment proceedings was not pressed by the ld. AR and hence dismissed as not pressed.

Confirmation of Addition under Section 69:
The assessee did not furnish the return under section 139 of the Act, leading to a notice under section 148. The Assessing Officer observed that the assessee and another co-owner paid on-money of Rs. 37 lakh for the purchase of a plot from Mahalaxmi. Despite the assessee's explanations, the AO made an addition of Rs. 18,50,000/- in the hands of the assessee. The Tribunal found that the on-money cash pages and Ledger account clearly indicated the involvement of the assessee in the transaction. The Tribunal concluded that the authorities were justified in making the addition under section 69 for the on-money paid by the assessee.

Legal Interpretation:
The Tribunal emphasized that section 69 applies to unrecorded investments made in the financial year preceding the assessment year, where no satisfactory explanation is provided. Therefore, the addition for unrecorded investments should be made in the year of payment, not when the connecting transaction is completed later. Since the assessee and the co-owner paid on-money of Rs. 37 lakh in the relevant year without proper recording or explanation, the addition was deemed appropriate for that year.

Conclusion:
The Tribunal upheld the addition of Rs. 18.50 lakh under section 69 towards on-money paid by the assessee in the year under consideration. Consequently, the appeal was dismissed.

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