KHYATI DILIPKUMAR DAVE,DUBAI V. OFFICE OF THE INCOME TAX OFFICER, WARD 1,INT.TAX.,AHM, AHMEDABAD, GUJARAT,INDIA

ITA 713/AHD/2025

AI Insights

The case involves Khyati Dilipkumar Dave, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) - CIT(A) regarding additions made to her income for the Assessment Year 2018-19. The additions were made by the Assessing Officer under Sections 69 and 69A of the Income Tax Act, 1961, due to unexplained investments and credits. The CIT(A) partially upheld these additions, leading to the appeal. The Tribunal's decision to set aside the matter for re-evaluation by the Assessing Officer was based on the need for a thorough examination of the evidence and the proper application of legal provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653161 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARGOVIND SINGH
• Assessee Lawyers: HARDIK ADANI
• Keywords: Unexplained cash credit; Unexplained investment; Salary income; Gift
• Section: 148; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.713/Ahd/2025 (Assessment Year: 2018-19) Khyati Dilipkumar Dave, C/o. Pritesh A Shah & Associates, 409, Akruti Complex, Nr. Das Khaman, Stadium Cross Road, Navrangpura, Ahmedabad-380009 Vs. Income Tax Officer, Ward-1 (International Taxation), Ahmedabad [PAN No.AJWPD2254J] (Appellant) .. (Respondent) Appellant by : Shri Hardik Adani, A.R. Respondent by: Shri Hargovind Singh, Sr. DR Date of Hearing 10.06.2025 Date of Pronouncement 20.06.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”)-13, Ahmedabad vide order dated 31.01.2025 passed for A.Y. 2018-19. 2. The brief facts of the case are that information was in possession of the Department, according to which the assessee had purchased immovable property of a substantial amount during the impugned assessment year. Accordingly, notice under Section 148 of the Act was issued and served upon the assessee, requiring the assessee to furnish return of income. In response to the notice, the assessee filed his return of income on 11.04.2022, declaring total income of Rs. Nil/-. During the course of assessment proceedings, the Assessing Officer found that the assessee had purchased immovable property amounting to Rs.67,72,500/- (purchase cost) + Rs. 3,31,852/- (stamp duty) + Rs. 67,725/- (Registration ITA No. 713/Ahd/2025 Khyati Dilipkumar Dave vs. ITO Asst. Year –2018-19 - 2– Charge), totaling to Rs.71,72,077/-, but the assessee failed to submit necessary details in response to source of purchase of property. Therefore, the Assessing Officer treated the said investment as unexplained investment and made addition of Rs. 71,72,077/- on account of unexplained investment under Section 69 of the Act while passing the assessment order. Further, during the course of assessment proceedings, on perusal of details available on records, it was noticed by the Assessing Officer that the assessee was maintaining three bank accounts with HDFC Bank. On perusal of the bank statement of the said bank accounts, the Assessing Officer had noticed that total credit entries of Rs. 1,92,000/- + Rs. 29,186/- + Rs. 18/- = Rs. 2,21,204/- were made during the year under consideration. However, the assessee had not explained the source of the said credit entries. Therefore, the Assessing Officer treated the said credit entries as unexplained money and made addition of Rs. 2,21,204/- on account of unexplained money u/s.69A of the Act. It was further noticed by the Assessing Officer that the assessee had made investment in Birla Sun Life Mutual Fund of Rs. 21,586/-, but the assessee failed to explain source of such investment. Therefore, the Assessing Officer treated the said investment as unexplained investment and made addition of Rs. 21,586/- on account of unexplained investment under Section 69 of the Act. 4. In appeal, with respect to addition of Rs. 71,72,077/- on account of unexplained investment in immovable property, the CIT(A) observed that out of the aforesaid amount, a sum of Rs. 55,00,000/- had been sourced out of housing loan taken from ICICI Bank. Further, on perusal of the said deed, CIT(A) observed that investment of a sum of Rs. 13,00,000/- was made by the assessee in an earlier / previous assessment year (A.Y. 2016-17). Accordingly, Ld. CIT(A) gave relief to the assessee for a sum ITA No. 713/Ahd/2025 Khyati Dilipkumar Dave vs. ITO Asst. Year –2018-19 - 3– of Rs. 68,00,000/- (Rs. 13,00,000/- + Rs. 55,00,000/-) and confirmed the balance addition amounting to Rs. 3,72,077/- in the hands of the assessee with the following observations: “8.7 In view of the above, it is evident that out of the total investment cost of the property amounting to Rs.67,72,500/-, the appellant had taken housing loan from ICICI Bank of Rs.55,00,000/-. Further, on going through the sale deed, it is observed that the investment of Rs.13,00,000/- was made by the appellant in earlier assessment year 2016-17. The appellant has further submitted that she had earned salary income of 7000 Dirham per month in United Arab of Emirates converting the same approx. Rs.1,35,000/- per month in INR and in support, has furnished copy of bank statement of UAE in which salary was credited. However, on perusal of said bank statement of UAE, it is seen that salary was credit till 24.10.2016 and after that no salary was credited especially during the F.Y.2017-18 relevant to A.Y.2018- 19. The appellant has further claimed that the balance amount of Rs.16,72,077/- [Rs.71,72,077 – Rs.55,00,000],was paid from her/her husband bank account. 8.8 As per the provisions of section 69 of the I.T. Act, addition on account of unexplained investment can be made only in the year wherein the investment was made. In this case, it is observed that an amount of Rs.13,00,000/- (other than housing loan amount) was paid by the appellant in earlier assessment year 2016- 17. Therefore, the investment of Rs.13,00,000/- made in earlier assessment year 2016- 17 does not survive in the year under consideration i.e. A.Y.2018-19. As such, remaining amount of investment beingRs.3,72,077/- [Rs.71,72,077 less(Rs.13,00,000/- + Rs. 55,00,000/-)] remains unexplained and accordingly is confirmed.” 5. However, with respect to the balance addition of Rs. 2,21,204/- on account of credit entries in assessee’s bank account and the sum of Rs. 21,586/- on account of unexplained investment in Birla Sun Life Mutual Fund, CIT(A) confirmed the addition by observing that the assessee could not provide plausible evidences and supporting documents about the source of such credits/investments. 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). With respect to the addition of Rs. 3,72,077/- which was confirmed by Ld. CIT(A) on account of unexplained investment in immovable property, the assessee submitted that this ITA No. 713/Ahd/2025 Khyati Dilipkumar Dave vs. ITO Asst. Year –2018-19 - 4– amount was substantially sourced out of cash gift received by the assessee from her mother. In support of this, the Counsel for the assessee also drew our attention to a confirmation filed by the mother of the assessee stating that she had given a sum of Rs. 2,00,000/- in cash to the assessee towards purchase of immovable property. Further, the Counsel for the assessee submitted that the entire addition towards unexplained investment in the property has been confirmed in the hands of the assessee, without appreciating the fact that the property was jointly held by the assesse, alongwith her husband. 7. On going through the contents of the order passed by Ld. CIT(A), and the evidences in the form of confirmation filed by the assessee from her mother, in the interest of justice, the matter is hereby set-aside to the file of Assessing Officer for de-novo consideration. 8. In the result, Ground No. 1 with respect to the aforesaid addition is allowed for statistical purposes. 9. With respect to the addition of unexplained credit entries amounting to Rs. 2,21,204/-, the Counsel for the assessee submitted that these amounts have been transferred to the account of the assessee from her husband’s bank account. The Counsel for the assessee drew our attention to bank account annexed at Page 61 of the Paper Book. It was submitted that these facts had not been duly verified by the Tax Authorities and the addition had been made on account mis-appreciation of assessee’s set of facts. With respect to addition of Rs. 21,586/- (unexplained investment in Birla Sun Life Mutual Fund) it was submitted that this amount was again received by the assessee from her husband’s bank account and accordingly, the source thereof stood duly explained. ITA No. 713/Ahd/2025 Khyati Dilipkumar Dave vs. ITO Asst. Year –2018-19 - 5– 10. On going through the facts of the instant case, and the evidences submitted by the assessee, in support of the contention that these investments/credits were transfers made to the assessee’s bank account from her husband’s bank account, in the interest of justice, both these issues are restored to the file of Assessing Officer, for de-novo consideration. 11. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 20/06/2025 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 20/06/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 16.06.2025 2. Date on which the typed draft is placed before the Dictating Member 16.06.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 18.06.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 20.06.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 20.06.2025 7. Date on which the file goes to the Bench Clerk 20.06.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "