MAHESH RAMAKANT GAWDE,DATA MANDIR ROAD MUMBAI V. ITO, 35(2)(3), MUMBAI, MUMBAI

ITA 4651/MUM/2025

AI Insights

The case involves an appeal by Mahesh Ramakant Gawde against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which confirmed the additions made by the Assessing Officer under sections 69A and 56 of the Income Tax Act, 1961. These additions pertained to a single transaction involving the purchase of a flat, which was taxed as both an unexplained investment and an undisclosed sale. The Tribunal found that the same transaction was taxed multiple times, which was unwarranted. The Tribunal also addressed issues related to the disallowance of loss from house property and deductions under chapter VI-A, which were not allowed by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773470 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 22-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: MAHESH R. GAWDE
• Keywords: Set aside; Reassessment proceedings; Unexplained investment; Salary income; Reopening of assessment
• Section: 143(3); 56; 69; 80C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 4651/Mum/2025 Assessment Year : 2011-12 Mahesh Ramakant Gawde, 3/183, Data Mandir Road, Mumbai-400092. PAN : AJIPG4118L vs. ITO-35(2)(3), Kautilya Bhavan, Bandra Kurla Complex, Bandra East, Mumbai-400051. (Appellant) (Respondent) For Assessee : Mr. Mahesh R. Gawde (Assessee in person) For Revenue : Shri Annavaram Kosuri, Sr.DR Date of Hearing : 22-09-2025 Date of Pronouncement : 24-09-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 23-05-2025, pertaining to Assessment Year (AY) 2011-12, wherein the assessee has taken the following grounds of appeal: “1. That on facts and circumstances of the case and in law the ld. C.I.T. (Appeals), NFAC, Delhi has erred in passing the ex-parte appellate order and confirming the patently incorrect and wrong addition made by ld. Assessing Officer in the ex-parte assessment order passed u/s.144 wrongly treating and assessing the single purchase transaction of Flat No.21 in Ratnagaga CHS Ltd. at Broivali in Mumbai twice, first as unexplained investment u/s.69A at Rs.38,00,000/- and again treating the very same purchase transaction as undisclosed sale transaction u/s.56 at Printed from counselvise.com 2 ITA No. 4651/Mum/2025 Rs.38,00,000/- which flat was purchased jointly by assessee along with his working wife (Vaishali Mahesh Gawade PAN: ALZPG7501N) in the above assessment year mainly out of borrowed funds from the bank). 2. That on facts of the case and in law the ld. C.I.T. (Appeals), NFAC, Delhi has erred in confirming the above stated patently unlawful addition without appreciating that the purchase of very same flat no. 21 in Ratnaganga CHS Ltd. has also wrongly been taxed in hands of wife of assessee, the joint purchaser of the said flat as undisclosed investment u/s.69A at Rs.38,00,000/-which has resulted into taxing a single transaction not only twice but thrice which is absolutely unwarranted and uncalled for. 3. That the impugned wrong addition made u/s.69A at Rs.38,00,000/- and again u/s.56 at Rs.38,00,000/- being wholly illegal, unwarranted and uncalled for hence may be quashed and set aside. 4. That the ld. C.I.T. (Appeals) has erred in not allowing the set off claim of the loss from house property of Rs.1,50,000/- against the salary income towards deduction of interest paid on housing loans borrowed for acquisition of self occupied flat duly made in the return of income filed but wrongly not allowed by Id. AO. 5. That the ld. C.I.T. (Appeals) has erred not allowing the part deduction claim under chapter VI-A to the extent of Rs.1,20,000/- duly made u/s.80- C and 80-CCF in the return of income filed but wrongly not allowed by Id. AO. 6. That all the appeal grounds raised in the above are independent grounds and without prejudice to each other. 7. That appellant craves the leave to amend, alter, substitute and or to raise new or additional grounds of appeal at the time of hearing.” 2. Briefly the facts of the case are that the assessment in this case was completed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 („the Act‟) vide order dt. 11-12-2018, wherein the AO has brought to tax un- explained investment u/s. 69 of the Act amounting to Rs. 38 lakhs and income from other sources u/s. 56 of the Act amounting to Rs. 38 lakhs and has disallowed house property loss of Rs. 1,50,000/- and as against the returned income of Rs. 3,92,256/-, has assessed the income at Rs. 82,62,260/-. The assessee thereafter carried the matter in appeal before Printed from counselvise.com 3 ITA No. 4651/Mum/2025 the Ld.CIT(A), who has since dismissed the appeal so filed by the assessee and against the said order, the assessee is in appeal before us. 3. During the course of hearing, the assessee submitted that the Ld. CIT(A) has erred in passing the ex-parte order and confirming the addition so made by the AO, treating and assessing the single purchase transaction of Flat No. 21 in Ratnagaga CHS Ltd., at Borivali in Mumbai twice, first as un-explained investment u/s. 69 of the Act at Rs. 38 lakhs and again treating the very same purchase transaction as undisclosed sale transaction u/s. 56 of the Act at Rs. 38 lakhs. It was submitted that the said flat was purchased jointly by him along with his wife, mainly out of the borrowed funds from the bank and they are currently staying in the said flat. It was further submitted that the said transaction has again been taxed in the hands of his wife and the said matter is currently pending adjudication before the ld CIT(A). It was accordingly submitted that a single transaction has been brought to tax thrice, twice in his hands and separately, in hands of his wife which is absolutely unwarranted and uncalled for. It was submitted that during the course of assessment proceedings, he has submitted before the AO that the flat has been purchased mainly out of bank loans besides personal savings and necessary documentation were submitted which has been completely ignored by the AO. It was further submitted that the AO has erred in disallowing loss from house property which was in respect of the interest paid on housing loans taken for acquisition of self-occupied flat. It was further submitted that the AO has erred in disallowing the claim made in the return of income u/s. 80C and 80CCF of the Act. An affidavit narrating the events and in support of submissions made aforesaid and documents submitted before the AO have also been placed on record. It was accordingly submitted that necessary relief be provided to him and the Printed from counselvise.com 4 ITA No. 4651/Mum/2025 addition so made be directed to be deleted and necessary deductions so made be allowed to him. 4. Per contra, the Ld.DR is heard, who has relied on the orders passed by the AO as well as that of the Ld.CIT(A). It was submitted that the assessee has been granted adequate opportunities both by the AO as well as by the Ld.CIT(A), however, in absence of necessary explanation and documentation so submitted by the assessee, the additions have been made by the AO and confirmed by the Ld.CIT(A). Regarding the contentions raised by the assessee that the same transaction has been taxed twice in the hands of the assessee and separately, in the hands of his wife, the Ld.DR fairly submitted that the same needs necessary verification and where the Bench so decide, the matter may be remitted to the file of the AO. 5. We have heard the rival contentions and perused the material available on record. On perusal of the assessment order, it is noted that the case of the assessee was reopened basis AIR/CIB information that the assessee has purchased an immovable property to the tune of Rs 38,00,000/- and has sold an immovable property to the tune of Rs 76,00,000/-. Thereafter, notices were issued by the AO seeking necessary explanation from the assessee, and as stated by the AO, there was no compliance on part of the assessee though contested by the latter before us and the AO proceeded and brought to tax Rs 38,00,000/- as unexplained investments u/s 69 and an amount of Rs 38,00,000/- being the sale consideration from sale of the flat as income from other sources. As per the AO, there is prima facie evidence that the assessee has purchased and sold immoveable property and since the said transactions have not been reported in the return of income, both the purchase and sale transaction has been brought to tax in the hands of the assessee. Printed from counselvise.com 5 ITA No. 4651/Mum/2025 However, what prima facie evidence is there on record has not been spelt out by the AO. It is a case of reopening of assessment and therefore, before any addition is made in hands of the assessee, the onus is on the Revenue to bring on record credible and tangible evidence that there is escapement of income in the hands of the assessee. In the instant case, what we have noted from the assessment order is that there is reference to some information available on AIR/CIB portal, however, the nature and extent of information so available is also not spelt out which can reasonably demonstrate that the income has escaped assessment. It thus appears to be a case where basis so called information, the AO has initiated and completed the reassessment proceedings without bringing any tangible evidence and material on record and on this ground itself, the additions so made deserve to be set-aside. 6. Having said that, the situation becomes more glaring where the assessee comes forward and contends that the same transaction has been taxed twice in his hands and separately again in the hands of his wife and necessary explanation and documentation in terms of source of such investments being the housing loan and past savings were submitted during the assessment proceedings but completely ignored by the AO and an affidavit has been placed on record. It has been contended before us that the assessee along with his wife have jointly purchased a flat No. 21 in Ratnaganga CHS Ltd., at Borivali in Mumbai partly through bank borrowings to the tune of Rs 17.50 lacs and partly out of past savings during the financial year under consideration and they are currently staying in the said flat so there is no question of sale of the said flat. Necessary documentation in terms of housing loan certificate taken from Cosmos bank, bank account statement of the assessee and copy of purchase agreement has been placed on record and on perusal thereof, we find that the assessee has duly demonstrated the nature and source of Printed from counselvise.com 6 ITA No. 4651/Mum/2025 investment in the flat out of housing loan and sufficient past savings as reflected in the bank statement. In light of the same, we are of the considered view that basis material available on record, there is no justifiable and legal basis to make any additions in the hands of the assessee and the addition so made towards purchase of the flat and subsequent sale which is again factually incorrect is hereby directed to be deleted. Thus, the addition of Rs.76,00,000/- is hereby directed to be deleted. 7. Regarding loss under the head “Income from house property”, it is noted that the assessee has claimed interest on housing loan and on perusal of material available on record, we find that the same can be allowed to the extent of Rs.64,604/- actually incurred by the assessee as against Rs.1,50,000/- being the outer limit as so claimed by the assessee in his return of income, the AO is directed to allow the loss to the extent of Rs 64,604/- and the remaining disallowance of loss is confirmed. 8. Regarding deduction u/s 80C, it is noted that the same was in respect of employee contribution to provident fund, payment towards the life insurance policy and repayment of housing loan and basis material available on record, we find that the assessee has rightly claimed the same and the AO is directed to allow the deduction of Rs 1,00,000 as so claimed by the assessee. 9. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 24-09-2025. Sd/- Sd/- [RAHUL CHAUDHARY] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 24-09-2025 TNMM Printed from counselvise.com 7 ITA No. 4651/Mum/2025 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "