No Sec. 69 additions in hands of director merely because Company used his PAN to purchase land: ITAT

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  • Last Updated on 16 November, 2022

unexplained investment

Case Details: ITO v. Bhavin Mukeshbhai Patel - [2022] 144 205 (Ahmedabad-Trib.)

Judiciary and Counsel Details

    • Pramod M. Jagtap, Vice President & Ms Madhumita Roy, Judicial Member
    • Mukesh Thakwani, Sr.D.R. for the Appellant.
    • M.K. Patel, A.R. for the Respondent.

Facts of the Case

As per AIR information, the assessee purchased land with one co-owner. A show-cause notice was served on the assessee with regard to proof and source of investment for the purchase of land. The assessee submitted that said land was purchased by the company in which he was the director. Instead of using the company’s PAN, his PAN was used to complete the transaction.

However, the Assessing Officer (AO) didn’t accept the assessee’s plea and made additions under section 69 with respect to 50% of the total value of the land. On appeal, the CIT(A) deleted additions, and the matter reached before the Tribunal.


The Tribunal held that it appears from the detailed submissions made by the assessee that land was purchased by the company. Assessee duly furnished sufficient documents, particularly, the cash book of the company, showing the source of investment made for the purchase of land.

Thus, merely, because the assessee’s PAN number was mentioned, the purchase cannot be said to be made by him when the purchase had been shown in the P&L account as well as part of the closing stock of the company.

Accordingly, the addition made by the AO had been rightly found to be not justified and rightly deleted by the CIT(A).

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