Assessee wins appeal as revision order under Section 263 quashed for property purchase and unsecured loans dispute

ITAT Jabalpur allowed the assessee's appeal against Pr. CIT's revision order u/s 263. The case involved disputed property purchase from relative and increased unsecured loans. AO accepted assessee's explanations that purchased land was rural agricultural property from relative, supported by confirmation letter and genealogical tree. For unsecured loans, assessee provided identity, creditworthiness, and genuineness evidence for 41 lenders through bank statements and documentation. ITAT held AO's approach required no interference u/s 263 as assessee discharged initial burden with satisfactory evidence. Pr. CIT's order was quashed.

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Issues involved:
The judgment involves an appeal against an order passed under section 263 of the Income Tax Act, 1961 pertaining to assessment year 2018-19. The issues raised by the assessee include the correctness of the assessment order passed under section 143(3) and the applicability of provisions related to the purchase of a disputed property from a relative.

Assessment of Investment in Immovable Property:
During the assessment proceedings, the Assessing Officer raised a query regarding the purchase of land by the assessee for a lower consideration than the stamp duty value. The AO contended that the excess amount should be treated as income from undisclosed sources. However, the assessee explained that the land was rural agricultural land purchased from a relative, supported by a confirmation letter. The AO accepted this explanation and made no addition. The Tribunal held that the AO's approach did not warrant interference under section 263.

Unsecured Loans Issue:
The assessee had taken unsecured loans from 41 lenders during the relevant year and provided necessary documentation, including bank statements. The Assessing Officer accepted the explanation regarding the identity, creditworthiness, and genuineness of the lenders, except for a specific case. The Tribunal noted that the assessee had satisfactorily addressed all queries raised by the AO, and the order passed under section 143(3) did not require revision under section 263.

Judicial Precedent and Legal Interpretation:
Referring to a previous ITAT decision, the Tribunal emphasized that the assessee had fulfilled the onus of proving the legitimacy of the transactions by providing supporting evidence such as confirmation letters, PAN, Aadhar numbers, and bank statements. Additionally, the purchase of the property from a relative was supported by a genealogical tree and had been duly examined by the Assessing Officer. Based on these factors, the Tribunal concluded that the order of the Principal CIT should be set aside, and the appeal of the assessee was allowed.

Conclusion:
The ITAT Jabalpur allowed the appeal of the assessee, quashing the order of the Principal CIT dated 26/03/2023. The Tribunal found that the assessee had adequately addressed the issues related to investment in immovable property and unsecured loans during the assessment proceedings, and the order under section 143(3) did not warrant revision under section 263.

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