ITR
Property purchase questioned in a best judgment notice
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Facts
Property purchases are reported to the department. If you do not explain how you paid, the officer may treat the investment as unexplained.
Provisions and law
- Sec 144, Income-tax Act 1961 (now Sec 271)If you do not file a return or do not comply with notices under Sec 142(1) or 143(2), the officer can assess to the best of judgment after a show-cause notice giving you a date to be heard.
- Sec 142(1), Income-tax Act 1961 (now Sec 268(1))The officer can ask you to file a return or produce accounts, documents and information.
Analysis
Show the payment trail: home loan sanction and disbursal, your own savings from salary accounts, sale of an older asset, or family help with documents. For example ₹40,00,000 loan plus ₹15,00,000 from savings over three years. Attach the sale deed, loan letter and bank statements. A clear trail usually closes the issue.
Conclusion
- Get the sale deed and payment schedule.
- Get the home loan sanction and disbursal letters.
- Mark the payments in your bank statements.
- Explain any family contribution with documents.
- Submit a one-page fund flow with the reply.
A Savvy can do this for you
Best judgment assessment, Sec 144 (now 271)
₹4,999
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