Section-69 is the weapon in the armory of the income tax dept. which gives wide discretionary power to the assessing officer. If a person makes an investment and source if such investment is neither explained nor recorded in his books, then the A.O can add the amount of investment in the income of the assessee.
1 | Garima Gupta VS Assessee, November 27 2016, ITAT Amritsar. Smt Garima Guptas main source of income was interest income on deposits. |
2 | The assessee filed the return of income declaring total income at Rs 3 lakhs. |
3 | During assessment proceedings, AO noticed there was a credit of Rs 5.5 lakhs in assessees bank account. |
4 | Assessee submitted that the sum was received as advance towards sale of a plot owned by her. |
5 | She filed certificates from the buyer and the bank authenticating the deal of the property |
6 | AO held that assessee had failed to establish the identity of the buyer, his creditworthiness and genuineness of transaction with documentary evidence. |
7 | AO made an addition of Rs 5.5 lakhs u/s 69. |
8 | CIT(A) confirmed the addition. |
9 | On appeal, the ITAT held that AO had neither properly examined the material placed before him nor carried out personal investigation by visiting the plot. |
10 | ITAT remitted the matter to the file of the AO to decide afresh by objectively considering the material placed by the assessee before him and by visiting the plot. |