HARSHA HARSH VARANDANI ,MUMBAI V. ITO -22(1)(5), MUMBAI

ITA 4729/MUM/2024

AI Insights

The case involves Harsha Harsh Varandani, the appellant, who contested the orders of the CIT(A) and AO regarding additions made to her income for the Assessment Year 2013-14. The primary issues were the addition of Rs. 1,26,35,633 as unexplained investment under section 68 and Rs. 33,94,153 as undisclosed income from share sales. The AO had added these amounts to the assessee's income, which was partly upheld by the CIT(A). The Tribunal's decision primarily focused on the adequacy of evidence provided by the assessee to substantiate the sources of these funds.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473329 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: ASOO NIHALANI
• Keywords: Gift; Capital Gains
• Section: 250; 68

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 4729/MUM/2024 (निर्धारण वर्ा / Assessment Year :2013-14) Harsha Harsh Varandani 8 Prem Udyan Society, 9th and 12th Floor, R J Corner Road, Khar West, Mumbai- 400052 v/s. बिधम ITO-22(1)(5), Mumbai 308, Piramal Chambers, Lalbaugh, Parel, Mumbai-400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: ABTPN6280H Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी निर्ााररती की ओर से /Assessee by: Shri Asoo Nihalani रधजस्व की ओर से /Revenue by: Shri Hemanshu Joshi सुिवधई की िधरीख / Date of Hearing 17.03.2025 घोर्णध की िधरीख/Date of Pronouncement 21.03.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai /National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 30.07.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2013-14. 2. The assessee has raised the following grounds of appeal: P a g e | 2 ITA No. 4729/Mum/2024 A.Y. 2013-14 Harsha Harsh Varandani “1. The Ld. CIT(A) has erred in law and in facts in passing order u/s.250 of the Act and partly confirming the addition made by Ld. A.O. 2. The Ld. CIT(A) has erred in law and in facts in confirming the addition made by Ld. A.O. u/s. 68 of the Act on account of gift received amounting to Rs. 1,26,35,633/-- 3. The Ld. CIT(A) has erred in law and in facts in confirming the addition made by Ld. A.O. on account of undisclosed income from sale of shares of Rs. 33,94,153/- 4. The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.” 3. Ground No 1 is general in nature. 4. Ground No. 2 relates to addition u/s 68 of the Act confirmed by the Ld. CIT(A) – Rs. 1,26,35,633/-. 4.1 Brief facts of the case are that the assessee filed return declaring total income of Rs. 3,34,110/- for AY 2013-14 on 31.03.2014. Ld. AO noticed, during the course of scrutiny proceedings, that the assessee had purchased a flat in Mumbai for a consideration of Rs. 1,25,00,000/- during the year under consideration. While examining the sources in the hands of the assessee, it was seen that a sum of Rs. 1,26,35,633/- was paid to a developer of the project, M/s. Crown Construction Company, the source of which was stated to be the amount paid by the husband of the assessee. Ld. AO did not accept the confirmation of Shri Harsh Varandani, the husband of the assessee, on the ground that no documentary evidences were furnished in support of the contention that he had paid this amount out of withdrawal from his capital account from M/s. Crown General Trading Company FZC, a Dubai-based family concern. Accordingly, Ld. AO disregarded the confirmation filed by the husband of the assessee and added an amount of Rs. 1,26,35,633/- u/s 68 of the Act to the income of the assessee. P a g e | 3 ITA No. 4729/Mum/2024 A.Y. 2013-14 Harsha Harsh Varandani 4.2 Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). The assessee’s appeal was dismissed as no evidences regarding sources of funds invested in the purchase of property was submitted by the assessee during the appellate proceedings. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal. 4.3 Before us, Ld. AR has furnished a fresh affidavit dated 12.12.2024 of Shri Harsh J. Varandani, husband of the assessee wherein he has explained that the property was purchased by the assessee from a company, M/s. Crown Construction Company and the payment was made by another Dubai based company, M/s. Crown General Trading Company FZC out of its bank account held in RAK BANK Barjuman Branch, Dubai as per his instructions and this payment was debited to the capital account of Shri Harsh J. Varandani . Thus, Shri Harsh J. Varandani has categorically confirmed that an amount equal to Rs. 1.25 cr. was paid by him on behalf of the assessee for the purchase of immovable property and the same was routed through his account maintained with M/s. Crown General Trading Company FZC. Further, Ld. AR has also filed a confirmation from M/s. Crown General Trading Company FZC and an extract of its bank statement of in support of this payment. 4.5 Ld. DR, on the other hand, has relied on the orders of the lower authorities and submitted that in the absence of requisite documentary P a g e | 4 ITA No. 4729/Mum/2024 A.Y. 2013-14 Harsha Harsh Varandani evidences, the addition has rightly been made by the Ld. AO and deserves to be upheld. 4.6 We have considered the rival submissions and perused the material placed before us. We are of the view that the addition of Rs. 1,26,35,633/- in the hands of the assessee u/s 68 was not justified as she has duly discharged the onus by furnishing the affidavit from her husband along with supporting documentary evidences to establish the source of investment in the purchase of the property. We, therefore, delete the addition made by the Ld. AO amounting to Rs. 1,26,35,633/- in the hands of the assessee. This ground of appeal is allowed in favour of the assessee. 5. Ground No. 2 relates to the addition on account of undisclosed income from the sale of shares - Rs. 33,94,153/- 5.1 Brief facts of the issue are that on verification of the Annual Information Return [AIR] information in the case of the assessee, Ld. AO noticed that shares worth Rs. 33,94,153/- have been sold by the assessee during the year under consideration whereas no profit on shares or capital gains have been declared in the return. Since no explanation was furnished with regard to the share transactions, Ld. AO treated the total amount of Rs. 33,94,153/- as undisclosed income of the assessee during the year. 5.2 As no supporting documentary evidences to explain these transactions was filed before the Ld. AO as well as Ld. CIT(A), the addition made by the Ld. P a g e | 5 ITA No. 4729/Mum/2024 A.Y. 2013-14 Harsha Harsh Varandani AO of the entire sale consideration of Rs. 33,94,153/- was upheld by the Ld. CIT(A). 5.3 Before us, Ld. AR has furnished copies of contract notes issued by the broker for sale of share for AY 2013-14. However, since the issue has not been examined by the lower authorities, we deem it appropriate to restore the matter to the file of Ld. AO for computing the capital gains arising out of the sale of shares on the basis of evidences furnished by the assessee, after due verification. The assessee is also directed to furnish complete details in this regard before the Ld. AO. This ground is accordingly allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21.03.2025. Sd/- Sd/- KAVITHA RAJAGOPAL RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 21.03.2025 अननक ेत स ुंह र जपूत/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai P a g e | 6 ITA No. 4729/Mum/2024 A.Y. 2013-14 Harsha Harsh Varandani 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. "