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2023 (3) TMI 1048 - AT - Income TaxUnexplained investment made in immovable property - Addition u/s 69 - addition on the basis of acquisition of the property - case was selected for limited scrutiny for the reason large cash deposits in saving bank accounts and the assessee had also transferred one or more properties during the year - Whether transfer of property” would include the “purchase of property” as well? - HELD THAT:- Acquisition of capital assets would not fall under this definition as it is the case of acquisition of capital asset but not of a sale of capital asset. The assessee should have pre-existing rights into the capital asset which he intends to transfer in favour of a third party. Hence, the pre-existing rights, interests and the title is sine qua non for transferring. In this case, vendor of capital asset is a third party and the assessee is a vendee. In our considered view, there were two options available with the AO; either he could have rectified the mistake so occurred u/s 154 of the Act or replacing the word “acquire” in place of “transfer”, in the reasons for limited scrutiny, if it was a typographical error and if it was not so, then he would have sought the approval from the Competent Authority for examining this aspect. The AO failed to do so. Now, at this stage when the facts are undisputed that the case was taken up for limited scrutiny for the reasons stated to be cash deposits in the bank account and transfer of immovable property. We find merit in the contention of assessee that the Assessing Authority exceeded its jurisdiction for making assessment in respect of acquisition of the property by the assessee during the year. Thus, the AO is directed to delete the impugned addition.Appeal filed by the assessee is allowed.
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