The ITAT allowed the appellant's appeal against additions made ...

Rough slip cannot constitute valid property agreement for tax purposes; addition based on conjectures set aside

March 29, 2025

Case Laws     Income Tax     AT

The ITAT allowed the appellant's appeal against additions made by the AO regarding an alleged unexplained investment in a Sagar Plaza flat. The Tribunal found that the "kachi parchi" (rough slip) relied upon by tax authorities could not be treated as a valid agreement to sell immovable property as it lacked essential legal requirements - no signatures of parties or witnesses, no mention of the appellant's name, and was not proven to be in the appellant's handwriting. The ITAT held that both lower authorities erroneously ignored basic legal principles regarding valid property agreements, and the addition was made merely on surmises and conjectures, rendering it legally unsustainable.

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