NAMASIVAYAM ARUNPRASAD,CHENNAI V. ITO, INTL TAXN WARD-2(1), CHENNAI

ITA 548/CHNY/2025

AI Insights

The case revolves around an appeal by Namasivayam Arunprasad against the order of the Income Tax Officer, which added \\u20b9;8,30,000/- to the assessee's income for the assessment year 2015-16 under section 69 of the Income Tax Act, 1961, citing unexplained investments. The assessee, a non-resident Indian, had not filed a return of income but was found to have purchased immovable property for \\u20b9;2,23,44,500/-. The Assessing Officer reopened the case and added the entire sale consideration to the assessee's income due to lack of explanation regarding the source of investment. The assessee contested this addition, providing detailed explanations and documentary evidence regarding the sources of funds, which were not fully acknowledged by the Assessing Officer. The Tribunal, after reviewing the evidence, concluded that the assessee had sufficiently explained the sources of the funds, leading to the deletion of the addition made by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107342 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANAND K KALAKERI
• Assessee Lawyers: S. RAMANATHAN
• Keywords: Unexplained investment; Application of stay
• Section: 147; 148; 69; 13

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर. रगुनाथॎ, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.548/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2015-16 & S.A. No. 24/Chny/2025 [In I.T.A. No.548/Chny/2025] Namasivayam Arunprasad, C/o S. Ramanathan, Advocate, No. 4, Srinivasan Street, First Floor, Mandaveli, Chennai 600 028. [PAN:ADJPN0394E] Vs. The Income Tax Officer, International Taxation Ward 2(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Ramanathan, Advocate ŮȑथŎ की ओर से/Respondent by : Shri Shivanand K Kalakeri, CIT सुनवाई की तारीख/ Date of hearing : 06.03.2025 घोषणा की तारीख /Date of Pronouncement : 12.03.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 08.01.2025 passed under section 147 r.w.s. 144C(13) of the Income Tax Act, 1961 [“Act” in short] for the assessment year 2015-16. 2. The assessee raised 8 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) I.T.A. No.548/Chny/25 & S.A. No. 24/Chny/25 2 is justified in confirming the addition made by the Assessing Officer under section 69 of the Act on account unexplained investments in the facts and circumstances of the case. 3. At the outset, we note that the assessee is a non-resident Indian and no return of income filed. The Assessing Officer received information that the assessee purchased immovable property paying consideration of ₹.2,23,44,500/-. The case of the assessee was reopened by issuing a notice under section 148 of the Act. According to the Assessing Officer the assessee filed return of income declaring a total income of ₹. NIL, but, however, neither any explanation nor details filed with regard to the sources of investment with documentary evidence. Accordingly, the Assessing Officer added the entire sale consideration to the income of the assessee vide his draft assessment order dated 16.03.2024 passed under section 144C(1) of the Act. The assessee challenged the same before the DRP and the DRP directed the Assessing Officer by modifying the variation and complete the assessment as per remand report. The Assessing Officer, in his final assessment order, held that the assessee could not explain the source of payment of ₹.8,30,000/- with documentary evidence. Having I.T.A. No.548/Chny/25 & S.A. No. 24/Chny/25 3 aggrieved, the assessee is in appeal before us by raising the above mentioned grounds. 4. The ld. AR Shri S. Ramanathan, Advocate submits that the assessee shown source for investments for the purchase of house property and drew our attention to the page 1 of the paper book. The assessee availed house loan from HDFC of ₹.1,50,00,000/-, out of earnings from abroad ₹.39,51,848/-, own savings ₹.82,053/-, LIC policy maturity ₹.71,5000/- and funds from family members at ₹.8,30,000/- and supporting the same, the assessee has given every details. He argued that the Assessing Officer did not give any relief of fund arising out of family members. The ld. AR drew our attention to the statement of investment in property at page 1 & 2 of the paper book. The ld. AR submits that the assessee availed funds from his brother between 17.05.2014 and 27.05.2014 and drew our attention to page 5 of the paper book. Further, the assessee availed fund from his wife on 12.11.2014 to an extent of ₹.2,00,000/- and drew our attention to page 7 of the paper book. Further, he drew our attention to page 13 of the paper book and submits that the father-in-law of the assessee offered ₹.1,30,000/-. He argued that no addition is maintainable in view of the evidences furnished by the assessee. I.T.A. No.548/Chny/25 & S.A. No. 24/Chny/25 4 5. The ld. DR Shri Shivanand K Kalakeri, CIT relied on the order of the Assessing Officer. 6. Heard both the parties and perused the material available on record. We note that the Assessing Officer passed draft assessment order against which, the assessee filed objection before the DRP. While considering the objections, the DRP directed the Assessing Officer to conduct enquiry under section 144(7) of the Act. The Assessing Officer, in his final assessment order, held that the assessee could not explain the source for payment of ₹.8,30,000/-. But, however, before us, the ld. AR drew our attention to the evidences to the source of payments were raised from assessee’s family members. On perusal of page 1 & 2 of the paper book, we find that the assessee stated the sources for payment of sale consideration. We note that from the said statement, the assessee availed loan from HDFC Bank, own fund out of earnings, LIC policy maturity and family support. There is no dispute with regard to own fund out of earning, housing loan from HDFC and LIC policy maturity. We find the only dispute is with regard to funds availed from family members. On perusal of page 5 of the paper book, which is Indian Bank statement, on examination of the same, we find that on 17.05.2014 & 27.05.2014, I.T.A. No.548/Chny/25 & S.A. No. 24/Chny/25 5 ₹.1 lakh and ₹.4 lakhs were received by the assessee from his brother. Further, on perusal of page 7 of the paper book, the assessee received ₹.2 lakhs from his wife by name Mrs. R. Sarada on 12.11.2014. Again on 08.12.2014, he received ₹.1,30,000/- though cheque from Mr. Ramanathan. We find, on verification of the same, that the assessee explained entire sale consideration towards investment in immovable property by availing loan from HDFC, own earnings, LIC policy maturity and funds from his family members. But, however, the Assessing Officer did not give credit to the same, thereby, in our opinion, the addition of ₹.8,30,000/- is not maintainable. Accordingly, the addition made by the Assessing officer in his final assessment order of ₹.8,30,000/- is deleted and the grounds raised by the assessee are allowed. S.A. No. 24/Chny/2025 7. The Stay Application filed by the assessee in S.A. No. 24/Chny/2025 was also heard along with the main appeal. Since we have adjudicated the main appeal by deleting the addition made by the Assessing Officer, the stay petition filed by the assessee become infructuous and accordingly, the same stands dismissed. I.T.A. No.548/Chny/25 & S.A. No. 24/Chny/25 6 8. In the result, the appeal filed by the assessee is allowed and the stay application is dismissed. Order pronounced on 12th March, 2025 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 12.03.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "