In ITA No.374/SRT/2018- ITAT - If no addition was made by the department in the hands of the co-owners, assessee shouldn't be treated differently, rules ITAT (Surat)
Members Pawan Singh (Judicial) & Dr. A. L. Saini (Accountant) [08-05-2023]


Read Order: Sanjaykumar Ramanbhai Patel v. Income Tax Officer


Chahat Varma


New Delhi, May 25, 2023: The Surat bench of the Income Tax Appellate Tribunal has held that the assessee under consideration should not be treated differently when the department did not make any addition in the hands of the co-owners.


Factual matrix of the case was that the assessee was engaged in the business of purchasing land, plotting and sale to the customers during the year under consideration. During the course of assessment proceedings, it was noticed by the Assessing Officer (AO) that the assessee along with three other co-owners had purchased immovable property for a consideration of Rs. 84,85,600/-. The AO noted that the assessee had shown fictitious source of investment in the said property. The so-called advance booking received in cash and the same invested in property were all fabricated to mislead and evade the due taxes to the department and the assessee had completely failed to prove that the source of investment made in property and the source of cash deposited in saving bank account were from booking advance received from the customers for sale of plots. In contrast, the assessee argued that the assessee should not be treated differently from the other co-owners of the land. The assessee pointed out that the assessment for the co-owners had already been made by the AO, and no addition was made in their cases.


The Tribunal observed that the assessee had provided all the necessary documents, including a statement showing the source of purchase of agricultural land. The assessee had also submitted certificates, PAN cards, election cards, and complete details of individuals from whom booking advances were received. The Tribunal noted that if the AO desired further investigation, he should have conducted inquiries with the individuals who had provided the booking advances. However, the AO failed to initiate any such inquiry or issue notices under section 131 of the Income Tax Act to those individuals.


The Tribunal noted that the assessee's mother, who was one of the co-owners, had her assessment completed without any addition. Therefore, the Tribunal concluded that the same treatment should be applied to the assessee and no addition should be made in his case.

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