ITAT Jaipur deleted an income tax addition of ₹22.19 lakh, holding that the disputed transaction was a purchase, not a sale, due to incorrect interpretation of property records by the AO.
ITAT Deletes ₹22.19 Lakh Addition in Property Data Error Case
The Income Tax Appellate Tribunal (ITAT), Jaipur, deleted an addition of ₹22.19 lakh arising from a misreading of property transaction data, clarifying that the transaction was a purchase by the assessee, not a sale as assumed by the Assessing Officer (AO). The AO had treated the assessee as having sold land based on registry entries, thereby treating the consideration as unexplained income under Section 69 of the Income Tax Act.
The assessee demonstrated through sale deeds and financial records that the transaction was, in fact, a purchase. The Tribunal emphasized that once the nature and documentation of the transaction were established, the mere sequencing or labelling in municipal records could not override factual reality. The AO’s reliance on property data without corroborative inquiry was deemed erroneous.
This decision underscores the importance of contextual verification in property-linked assessments. Tax practitioners must ensure that registry structures are interpreted in light of contemporaneous financial flows and supporting documentation, particularly when automated property data may mischaracterize transactional nature.
