ITO, DELHI V. USHA RANI, DELHI

ITA 2286/DEL/2025

AI Insights

The case revolves around an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals), which had deleted the additions made by the Assessing Officer under section 69 of the Income Tax Act, 1961. The additions were initially made on the grounds that the assessee, Usha Rani, had not adequately explained the sources of funds for a property purchase. The Tribunal's decision highlighted the principle that the source of the source need not be examined in the hands of the assessee, especially when the funds are received from close family members like husbands or sons. The Tribunal also noted the lack of independent income of the assessee and the need for tax authorities to be circumspect in such cases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793333 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 07-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: SANJAY GUPTA
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences; Unexplained investment; Principle of natural justice; Source of fund; Deemed to accrue or arise in india
• Section: 147; 148; 144; 142(1); 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.2286/Del/2025 Assessment Year: 2016-17 ITO, Ward-44(1), Delhi. Vs Usha Rani, 593, Rani Bagh, Delhi. PAN: AHRPC1449F (Appellant) (Respondent) Assessee by : Shri Sanjay Gupta, CA Revenue by : Shri Ajay Kumar Arora, Sr. DR Date of Hearing : 08.09.2025 Date of Pronouncement : 24.09.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Revenue against the order dated 07.02.2025 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.NFAC/2015-16/10332913 arising out of the appeal before it against the order dated 08.03.2024 passed u/s 147 R.W.S. 144B of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward-44(1), Delhi (hereinafter referred to as the Ld. AO). Printed from counselvise.com ITA No.2286/Del/2025 2 2. On hearing both the sides, we find that the case of the Revenue is that the assessee has been erroneously benefitted by the ld.CIT(A) as the source of the source of her husband’s agricultural activities has not been examined. We find that the Revenue has also raised a ground that additional evidences were accepted without giving the AO an opportunity to contest. 3. On appreciating the material before us and the submissions, we find that the assessee is a senior citizen and there is interest free interest income and no return for AY 2016-17 was filed and the assessee’s case has been reopened u/s 148 of the Act on the basis of AIR/ITD information of purchase of property amounting to Rs.1,05,00,000/-. The AO had completed the assessment by not accepting the plea of the assessee that the property was purchased jointly with her husband for a consideration of Rs.2,10,00,000/- and for her share Rs.1,05,00,000/-, Rs.52,70,000/- was paid through her bank account. The assessee had explained that she had received a sum of Rs.29,14,800/- and Rs.20,30,000/- from her sons Shri Anil Chug and Shri Sonu Chug. However, as per the AO she failed to furnish the source for balance purchase consideration of Rs.52,30,000/-. The assessee had claimed that the balance Rs.52,30,000/- was paid by her husband and the same was mentioned in the sale deed. However, the AO was not satisfied with the financial worthiness of her husband who was an agriculturist who has also not filed the return. The AO observed that Shri Ram Narain Chug has received money from various parties which establishes Printed from counselvise.com ITA No.2286/Del/2025 3 that he was carrying some business activity. However, there is no evidence with regard to his agricultural activity. The AO mentions that the assessee’s husband and her sons were receiving cash deposits and credits from C.M. Lubs India and their return of income does not commensurate with the money transferred by them to the assessee. Accordingly, the addition of Rs.1,05,00,000/- for the sale consideration and Rs.5,25,000/- towards the stamp duty paid was made u/s 69 of the Act and the same was deleted by the ld.CIT(A) by making the following findings in para 7:- “7. I have carefully gone through the assessment order, statement of facts, grounds of appeal and submission of the appellant. 7.1 It has been observed from the assessment orderthat the appellant had not filed her return of income for the year and consideration and further there was an information during the financial year that the appellant had purchased immovable property for Rs.1,05,00,000/-. During the proceedings u/s 148A of the Act, the appellant sought adjournment to the show cause notice issued u/s 148A(b) of the Act but failed to comply to the notice issued. The notice u/s 148A(b) was also delivered through speed post. However, the appellant failed to furnish any reply. In the absence of any information from the appellant, the AO has passed the order u/s 148A(d) on 31.03.2023. Accordingly, a notice u/s 148 was issued on 31.03.2023. In response to the notice issued u/s 148 the assessee filed the return of income for the AY 2016-17 on 18.04.2023 declaring total income at Rs.9,590/-. Thereafter, notices u/s.143(2) and 142(1) were issued on 29.09.2023, 26.10.2023, 28.11.2023 and 06.12.2023 requesting to furnish sources for purchase amount of Rs. 52,70,000/- through her bank account and for balance purchase amount of Rs. 52,30,000/-. The appellant responded and furnished the bank statement where in it is seen that the appellant has received an amount of Rs. 29,14,800/- and Rs. 20,30,000/- from her sons Sri Anil Chugh and Sri Sonu Chugh. The appellant submitted the bank statements, confirmation letters of her sons. However, the returns field by her sons did not commensurate with the income given to the appellant. The appellant stated that the balance Rs.52,30,000/- was paid by her husband Sri Ram Narain Chug and submitted the bank statement of her husband. The appellant also stated that her husband is an agriculturist and no ITR has been filed by him. It was seen from the bank statement of the appellant’s husband that he had made the balance payment of Printed from counselvise.com ITA No.2286/Del/2025 4 Rs.52,30,000/- towards the share of the appellant alongwith his purchase consideration. He had also paid for stamp duty and registration charges. Also it is seen from the bank statement of Shri Ram Narain Chug that he is receiving money from various parties and also appears to be carrying some business activity. However, the appellant stated that he is into agricultural activity but failed to produce any evidence in this regard. The appellant furnished Form-J in the name of her husband and it was seen that the total amounts of Form-J stood at Rs.27,43,331/ which also does not commensurate with the amount of purchased immovable property. As the appellant failed to submit the documentary evidences requisitioned, the assessment was completed u/s 147 rws 144 of the Act after making addition of Rs.1,10,25,000/-. In respect of unexplained investment u/s.69 and added to the total income of the assesseeand initiated penalty proceedings u/s.271(1)(c) of the Act for concealment of income and also initiated penalty u/s.271F for non-filing of return of income. 7.2 Ground nos 1, 2 and 6 are against initiation of re-assessment proceedings and the assessment order being bad in law. It is seen from the assessment order that the appellant was a non-filer of return of income during the year. Further, the Assessing Officer had received tangible information that the appellant had made investment of Rs 1,10,25,000/- and acquired 50 % share in immovable property during the year. As per the prescribed procedure under provisions of section 148A of the Act, he had issued notice u/s 148A(b) of the Act to the appellant asking to explain the source of investment in the said property.However, there was no compliance to the said notice. Therefore, he proceeded to pass order u/s 148A(d) and issued notice u/s 148 of the Act to the appellant.During the appellate proceedings, the appellant has not provided any explanation to show that the reasons recorded by the Assessing Officer and procedure followed by him for re-opening the assessment were erroneous or bad in law. Hence, these grounds of appeal are dismissed. 7.3 Ground nos. 3 & 4 are against the addition of Rs.1,10,25,000/- on account of unexplained investment u/s.69 of the Act. It is seen from the assessment order that during the assessment proceedings, the appellant had submitted copy of her bank statement showing the amount of Rs 52,70,000/- paid by her for purchase of the immovable property in question. She had clarified that although she held 50 % ownership share in the said property valued at Rs 2,10,00,000, however, she had only made payment of Rs 52,70,000/- towards the said property. She further stated that her balance share was paid by her husband Mr Ram Narain Chugh on her behalf and that the same is mentioned in the sale deed of the property. She had submitted bank statement of her husband evidencing the said payment and copy of Form-J evidencing that he was carrying out agricultural activities. Further, she had stated that the source of funds amounting to Rs 52,70,000/- paid by her was the amounts of Rs 29,14,800 and Rs 20,30,000/- received from her two sons Mr Anil Chugh and Mr Sonu Chugh through banking channel. As Printed from counselvise.com ITA No.2286/Del/2025 5 supporting evidences to her claim, she had submitted confirmation letters, bank statements and last three years’ ITRs of her two sons. These facts are not disputed by the Assessing Officer. 7.3.1 Thus, it is sufficiently clear that during the course of assessment proceedings itself, the appellant had fully explained the nature and source of investment of Rs 52,70,000/- made by her in the said property through credible documents. Therefore, the question of treating the said amount as unexplained and taxing it as her deemed income for the year does not arise. The addition of Rs.1,10,25,000/- made u/s 69 of the Act is hereby deleted. 7.3.2 It is seen that the Assessing Officer made the impugned addition u/s 69 of the Act solely because the appellant had not proved the credit- worthiness of her husband and her two sons. However, no onus is cast upon the appellant by the provisions of the said section to further explain the source of the amounts in the hands of her family members. Hence, these grounds of appeal are allowed. 7.4 Ground no. 5 is against not providing sufficient opportunity of being heard and denial of natural justice. During the assessmentproceedings, several notices u/s 142(1) were issued and served upon the appellant by the Assessing Officer. It is seen from the assessment order that she had availed of the numerous opportunities granted to her and made submissions before the Assessing Officer. Hence, this ground of appeal isdismissed. 7.5 Ground no 7 is general in nature and does not require adjudication.” 4. We find substance in the case of the assessee who is a women that the source of investment were exclusively from her husband or sons and, thus, it was not justified to treat the same as unexplained in her hands. The identity and source of investment were sufficiently explained and the ld.CIT(A) was justified to conclude that there is no onus on the assessee who was considered to be a senior citizen women to explain the source of amounts received by her from her male family members. We are also of considered view that tax authorities should be circumspect about the facts where assessee is a woman with no independent source of income and her male family members make invest or otherwise transact in her name, and thus principle of source of source may Printed from counselvise.com ITA No.2286/Del/2025 6 preferably examined by joining the male members in the enquiry. Thus, the grounds raised have no substance. The appeal of the Revenue is dismissed. Order pronounced in the open court on 24.09.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24th September, 2025. dk Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "