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2023 (6) TMI 766 - AT - Income TaxUnexplained investment - Additions u/s 69 - source of purchase of party - AO has rejected explanation furnished by the assessee only on the ground that the assessee has filed certain evidences to prove source for purchase of property and such claim is an afterthought - HELD THAT:- As assessee has filed all evidences to prove genuineness of the transactions, and creditworthiness of the parties in respect of all payments received from Mr.S.V.Ranga Reddy, which is source for purchase of property, by the assessee. When evidences filed by the assessee clearly shows that there is enough source for partnership firm to explain drawings of the partner, then, non-filing of return of income by the firm, cannot be a reason to reject explanation of the assessee for explaining source for purchase of property. In this case, the AO has rejected explanation furnished by the assessee only on the ground that the assessee has filed certain evidences to prove source for purchase of property and such claim is an afterthought. But, fact remains that when the AO is invoking deeming provisions, it was incumbent on the Assessing Officer, to bring on record material evidences which canbe said to lead to the satisfaction of the AO while making requisite investigations or adopt suchother means permissible in law at his comment. AO having not discharged onus for proving the satisfaction of the condition for application of deeming sections, he cannot invoke provisions of section 69 - As already stated by us in the earlier part of this order, the assessee has discharged primary onus and proved source for purchase of property. In this case, the assessee has discharged burden of proof by filing details of loans taken from Mr.S.V.Ranga Reddy, and also drawings from M/s.SVR Construction Co., by filing necessary details, including relevant ledger account copies through parties in their respective accounts, bank statements of partnership firm, and Mr.S.V.Ranga Reddy and also confirmation letters from the parties along with their ITR filed copies for the relevant assessment year. From the above, it is abundantly clear that the explanation offered by the assessee with regard to source for purchase of property is genuine transaction, which is supported by necessary evidences. AO is erred in making addition towards source for purchase of property as unexplained investment and taxed u/s. 69 - Decided against revenue.
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