2025 (6) TMI 1397 - AT - Income Tax

Assessee wins appeal as addition under section 69A deleted after proving genuine property sale transactions through banking records

Chemangattu Jose John Versus DCIT, Circle International Taxation, TVM

ITAT Cochin allowed the assessee's appeal and deleted the Rs. 18,41,000 addition made under section 69A of the Income Tax Act for AY 2015-16. The addition ... Addition u/s 69A - difference of valuation of the stamp duty versus actual consideration - money found credited in the assessee’s bank account unexplained - HELD THAT:- The assessee has demonstrated by bank statement that the entire amount came from the properties sold to the purchaser. Moreover, valuation of the stamp duty versus actual consideration, the difference arose solely because of the purchaser chosen to register a deed at the circle rate and stamp duty value was determined by the said authority for which the seller cannot compel the purchaser to reflect negotiated price. Since the assessee was transparent in receipts, therefore, the Assessing Officer has not disputed that the monies were reached through normal banking channel and once the assessee has proved the identity of the buyer, genuineness of the transaction and source of fund, the initial burden stands discharged. The revenue has not brought any record showing the consideration exceeded Rs. 34,00,000/- for that have been originated from a unaccounted sources. Addition made by the AO and sustained by the DRP u/s 69A of the Act is unsustainable and the AO is directed to delete the addition. Appeal of the assessee is allowed. The Appellate Tribunal (ITAT Cochin) allowed the assessee's appeal against the addition of Rs. 18,41,000/- made u/s 69A of the Income Tax Act for AY 2015-16. The Assessing Officer had added this amount due to a discrepancy between the actual sale consideration (Rs. 34,00,000/-) and the registered sale deed value (Rs. 15,59,000/-) for two agricultural properties. The Tribunal held that under section 69, the onus lies on the assessee to explain the nature and source of credited money. The assessee discharged this burden by demonstrating through bank statements that the full amount was received via transparent banking channels and that the lower registered value resulted from the purchaser's choice to register at the circle rate for stamp duty purposes, a practice beyond the assessee's control. Since the revenue failed to prove the funds originated from unaccounted sources, the addition was 'unsustainable.' The Tribunal directed deletion of the addition, stating the assessee had proved 'the identity of the buyer, genuineness of the transaction and source of fund,' thereby satisfying the requirements of section 69. The appeal was allowed.