AROGYAMARY CHOWRAPPA ,RAMANAGARA V. INCOME TAX OFFICER, WARD-592)(1), BANGALORE

ITA 1070/BANG/2025

AI Insights

The case revolves around an appeal by Arogyamary Chowrappa against the order of the National Faceless Appeal Centre (NFAC), which confirmed an addition of \\u20b913,29,245 to her income for the assessment year 2017-18, under section 69 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer (AO) due to unexplained investments in LIC. The CIT(A) partially upheld this addition after the assessee contested the initial assessment, arguing that the actual investment was \\u20b910,61,161 and was funded by a loan returned from her brother. The Tribunal, after reviewing the submissions and evidence presented, including LIC policy documents and bank statements, found merit in the assessee's arguments and allowed her appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717547 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 07-05-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE; STANDING
• Assessee Lawyers: S.V RAVISHANKAR
• Keywords: Set aside; Unexplained investment
• Section: 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI NARENDER KUMAR CHODHRY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No. 1070/Bang/2025 Assessment Year: 2017-18 Arogyamary Chowrappa, Josephdoddi, Mullahalli Post, Kanakapura Taluk, Ramanagara District – 562 119. PAN – BGGPA 1101 H Vs. The Income Tax Officer, Ward - 5(2)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Shri S.V Ravishankar, Advocate Revenue by : Shri Ganesh R Ghale, Advocate, Standing Counsel for the Revenue Date of hearing : 11.08.2025 Date of Pronouncement : 14.08.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 17/03/2025 in DIN No. ITBA/NFAC/S/250/2024-25/1074553984(1) for the assessment year 2017-18. 2. The interconnected issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of ₹13,29,245 on account of investment in LIC under section 69 of the Act. Printed from counselvise.com ITA No.1070/Bang/2025 Page 2 of 4 . 3. The AO, during the assessment proceedings, found that the assessee made cash deposits in the bank amounting to ₹2,50,000 and invested in LIC through cash amounting to ₹23,44,245.00, the source of these amounts was not explained. Accordingly, the AO treated the same as unexplained investment under section 69 of the Act and added the sum of ₹25,94,245 to the total income of the assessee. 4. Aggrieved, the assessee preferred an appeal to the learned CIT(A). The assessee, before the learned CIT(A), made various submissions. One of the submissions was that the investment in LIC was only ₹10,61,161.00 only. According to the assessee, she had given a loan of ₹13,00,000 to her brother. This is evident from the bank statement. The brother returned the loan, and this money was used for the LIC investment. Therefore, no addition was warranted. 5. The learned CIT(A) deleted the addition of ₹2.50 lakhs and found that there was a double addition on account of investment in LIC of ₹10,50,000.00 only. Thus, the learned CIT(A) restricted the addition to ₹13,29,245 on account of investment in LIC on the same reasoning of the AO. 6. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 7. The learned AR before us submitted a paper book from pages 1 to 39. He submitted that the actual LIC investment was ₹10,61,161.00 only. This is evident from the LIC policies placed on pages 12 to 14 of the paper book. The learned AR also submitted that the assessee had Printed from counselvise.com ITA No.1070/Bang/2025 Page 3 of 4 . already explained before the learned CIT(A) that her brother had returned the loan money, which was then used for the LIC payment. The ld. AR also filed confirmation regarding the source of money in the hands of the brother. These are placed on pages 30 to 39 of the paper book. The learned AR argued that the learned CIT(A) did not doubt this explanation. Therefore, the LIC investment cannot be treated as unexplained under section 69 of the Act. 8. On the other hand, the learned DR strongly supported the orders of the authorities below. 9. We have heard the rival contentions of both the parties and perused the records. In this case, the following issues arise for our consideration: 1. How much was the LIC investment — ₹10,61,161 or ₹13,29,245 as alleged by the Revenue? 2. Was the LIC investment unexplained under section 69 of the Act? 9.1 As regards the LIC investment, we note that the assessee has placed copies of the LIC policies on pages 12 to 14 of the paper book. These show the investment as ₹10,61,161 only. This was not disputed by the learned DR at the time of hearing. Accordingly, we hold that the LIC investment was ₹10,61,161 and not ₹13,29,245 as alleged by the Revenue. 9.2 Moving further, we examine whether the LIC investment was unexplained under section 69 of the Act. The assessee claimed to have Printed from counselvise.com ITA No.1070/Bang/2025 Page 4 of 4 . given a loan of ₹13,00,000 to her brother. This is reflected in the bank passbook. The loan was received back in cash and used for the LIC investment. Importantly, the source of giving this ₹13 lakh loan to the brother was never doubted by the authorities below. Thus, we find merit in the ld. AR’s argument that the returned loan was utilized for the investment. The ld. AR has also filed confirmation placed on pages 30 to 39. All these details shifted the onus to the Revenue to disprove the assessee’s claim. However, no verification was carried out by the authorities below to disprove the contention of the assessee. Accordingly, we hold that the LIC investment was made from the loan received back from the brother. We, therefore, set aside the finding of the learned CIT(A) and direct the AO to delete the addition made by him. Thus, the ground of appeal of the assessee is hereby allowed. 10. In the result, the appeal of the assessee is hereby allowed. Order pronounced in court on 14th day of August, 2025 Sd/- Sd/- (NARENDER KUMAR CHODHRY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 14th August, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore Printed from counselvise.com "