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ITR

The ₹50 lakh condition for reopening older years

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Beyond 3 years, reopening needs information that escaped income is ₹50 lakh or more. The test is escaped income, not the value of the transaction. If most of the price was funded by a loan or explained money, the escaped income may be far below ₹50 lakh.

Provisions

Sec 149 (now Sec 282); Sec 69 (now Sec 103)

Analysis

Sec 149 (now Sec 282) speaks of income that has escaped or is likely to have escaped, amounting to ₹50 lakh or more. If ₹35 lakh came from a bank loan paid directly to the seller and ₹20 lakh from your disclosed savings, the alleged escaped income may be nil. Show this in the reply with the loan disbursement letter and bank statements, and argue that the extended period does not apply. Officers sometimes take the gross transaction value, which can be challenged.

Close

  1. Prepare a source of funds table for the transaction.
  2. Attach loan and bank documents.
  3. Argue that escaped income is below ₹50 lakh and the notice is time barred.
  4. Add the merits so the reply is complete.

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Connect nowPay and start: Reassessment, Sec 148A / 148 (now 281 / 280), ₹4,999

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