ITAT Remands Assessment for Fresh Verification of Property Investment and Section 80C Deduction:

The assessee is Amit Kumar Rai who filed his return of income for Assessment Year 2020–21, declaring a total income of Rs 3,36,240. Based on information that he had purchased immovable property jointly with Rubi Rai and Chandra Mohan Ojha, the AO initiated reassessment proceedings under Section 147 of the Income Tax Act.

The information indicated that the assessee had paid Rs 5 lakh in cash towards the property, while a further amount of Rs 35 lakh had been paid by Chandra Mohan Ojha on his behalf. During the reassessment proceedings, the assessee failed to provide a satisfactory explanation regarding the source of the cash payment and the amount paid on his behalf. Consequently, the AO made an addition of Rs 5 lakh under Section 69A of the Act, treated Rs 35 lakh as a deemed gift, and disallowed the assessee’s deduction claim of Rs 1,50,000 under Section 80C for want of supporting evidence. These additions and disallowances were upheld by the CIT(A). 

After considering the submissions, the Tribunal observed that the assessee had furnished certain information before the AO regarding the source of the disputed investments but had failed to produce supporting documents. At the same time, the AO had not conducted any inquiry or verification into the explanations submitted by the assessee.

The Tribunal also noted that the CIT(A) had directed the AO to verify the year in which the sale deed was executed. Considering these circumstances, the Tribunal held that the matter required fresh examination rather than being decided without the necessary factual verification. Accordingly, the Tribunal set aside the assessment and directed the AO to frame the assessment fresh after carrying out the necessary inquiries and verification.