New Delhi, Oct. 19 -- A taxpayer who said he invested about Rs.9.63 lakh in Bitcoin and incurred a loss of Rs.3.34 lakh faced an income tax addition of Rs.88.55 lakh after the tax department questioned the source of funds used for cryptocurrency transactions. The Income Tax Appellate Tribunal (ITAT), Lucknow Bench, has now quashed the reassessment, citing procedural lapses by the assessing officer.

The tribunal found that the tax officer did not give the taxpayer the minimum time required by law to respond to a notice and proceeded with reassessment without considering a reply that had already been submitted. The ruling does not establish that the taxpayer's explanation of his Bitcoin transactions was correct.

The order in Surya Pratap ...