TaxTMI 
TaxTMI 
2026 (9) TMI 590
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.... of the lender (sister); iii. Bank passbook showing account-payee cheque transaction; iv. Entries recorded in the books of accounts. 3. Despite the above submission to the AO vide the appellant's submission dated 1" December, 2023, the AO ignored the above submission and treated the transaction as unexplained and have also claimed in his remand report to the learned CIT(A) - as reproduced by the CIT(A) in page no. 10 of the Appeal order "However, no documentary evidence such as confirmation, PAN details, bank statement, or copy of the sister's income tax return was furnished. In the absence of any such supporting evidence, the identify and creditworthiness of the lender and the genuineness of the transaction could not be verified." The fact about the submission of the above details to the AO was also mentioned by the appellant in her written submission to the CIT(A) on 11 November 2025 (refer to point no. 2). However, based on the remand order of the AO, and ignoring the written submission to the CIT(A), the CIT(A) upheld the addition made by the AO in his order. The AO could have issued summons to the lender and confirmed the tr....
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....4) with a part payment of Rs.1,50,000; ii. Final sale deed was executed in December 2014, but substantial rights and part performance occurred in March 2014; iii. Property was in dilapidated condition (not used for the last 15 years before this sale) and sold at distressed price, requiring further expenditure to make it habitable. Errors in CIT(A) Order: 1. Misinterpretation of Section 56(2)(vii)(b): i. CIT(A) relied on the AO's view that absence of bank proof for part payment invalidates the claim. ii. Section 56(2)(vii)(b) requires part payment through banking channels, but the MOU and actual possession transfer clearly establish a valid right in personam as per Sanjeev Lal v. CIT [365 ITR 389 (SC)). 2. Improper Rejection of MOU: i. CIT(A) disregarded the MOU, ignoring principles of part performance under Section 53A of the Transfer of Property Act. ii. Supreme Court rulings confirm that rights and obligations under MOU can constitute transfer if part consideration is paid 3. Failure to Consider Market Reality: i. The addition ignores the fact that the property was uninhabited f....
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....er section 10 of the Indian Contract Act, 1872. Section 10 of the Indian Contract Act, 1872 states-"All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. 5. CBDT Circular Misapplied: I. CIT(A) rejected reference to CBDT Instruction No. 1/2022 without considering the principle that the provision is applicable only to pre-A.Y. 2015-16 transactions, and cannot override actual facts of part payment and possession. Legal Arguments: • Section 2(47)(v) clearly states that transfer includes allowing possession in part performance; hence, agreement date should be considered. • CIT(A) applied Section 56(2)(vii)(b) mechanically without weighing documentary evidence or possession. • Judicial precedents clearly support considering the transaction from MOU date for income determination. Prayer in Ground 2: • Delete the addition of Rs.14,60,000 under Section 56(2)(vii)(b). GROUND NO.3 Improper reliance on remand report 1. The CIT(A) heav....
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....the parties and perused the material available on record, the judgments cited before us, the orders passed by the Revenue Authorities and the written submissions filed by the assessee. From the records, we notice that the AO had made an addition on account of a loan of Rs. 3,20,499/- received by the assessee from her sister, treating the same as unexplained investment under Section 69 of the Act. 4. In this regard, during the course of assessment proceedings, the assessee submitted that the loan received from her sister, Rachna Singh, was a genuine transaction. In support of her contention, the assessee furnished a copy of the PAN card of Rachna Singh, a loan confirmation letter from Rachna Singh, and a copy of the bank statement of the assessee reflecting receipt of the said amount through proper banking channels. 5. However, the AO, ignoring the documents furnished by the assessee, made the addition under Section 69 of the Income Tax Act by observing that the assessee had not submitted any confirmation regarding receipt of the loan. Whereas, all the requisite documents were already available before the AO, and the AO could not point out any defect or discrepancy in the docu....
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.... under Section 53A of the Transfer of Property Act, and failed to consider the factual position of the case. It was further submitted that the Ld. CIT(A) failed to consider the provisions of Section 2(47)(ii) of the Income Tax Act and the ratio laid down by the Hon'ble Supreme Court in the case of Sanjeev Lal v. CIT, 365 ITR 389 (SC), wherein the Hon'ble Supreme Court held that by executing an agreement to sell in respect of an immovable property, a right in personam is created in favour of the transferee/vendee. 14. However, the said judgment, according to the assessee, was duly submitted before the Ld. CIT(A), but the same was not properly considered. The Ld. CIT(A), while referring to Section 56(2)(vii)(b), observed that the initial payment of Rs. 1,50,000/- was made in cash. Apart from this, the applicability of Section 2(47)(ii) was also not properly considered, particularly since the issue relates to the creation/accrual of a right in the property and not merely to the mode of payment. 15. It was also pointed out that the Ld. CIT(A), in Para 8.3 of his order, observed that the assessee had purchased two apartments worth Rs. 65,00,000/- and Rs. 79,60,000/-, re....