SOWMYA BELLUR KUMARASWAMY ,BANGLAORE V. ITO,INTL. TAXATION WARD -1(2), BENGALURU

ITITA 261/BANG/2025

AI Insights

The case involves Smt. Sowmya Bellur Kumaraswamy, a non-resident Indian, who appealed against the final assessment order of the AO which added Rs. 20,02,382 as unexplained income under section 69 of the Income-tax Act, 1961, for the assessment year 2016-17. The AO had initially treated the investment in immovable property as unexplained due to insufficient evidence from the assessee regarding the source of funds. The assessee contended that the funds were transferred from her husband's account in the USA and from her mother-in-law, which were not adequately substantiated in the initial proceedings. The Dispute Resolution Panel (DRP) upheld the AO's decision after a remand report, leading to the appeal before the Tribunal. The Tribunal admitted additional evidence submitted by the assessee, which was not available during the lower proceedings, and remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776330 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 15-09-2025
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 12-02-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUGANTHAMALA T M
• Assessee Lawyers: SIVA NAGARAJU S
• Keywords: Additional evidence; Unexplained investment
• Section: 147; 148; 142(1); 69; 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER IT(IT)A No. 261/Bang/2025 Assessment Year : 2016-17 Smt. Sowmya Bellur Kumaraswamy, CA S V Narasaiah, No. 54, Beside Balaji Hall, 1st Floor, 1st Main, 1st Cros, Vysya Bank Layout, BTM 2nd Stage, Bangalore – 560 076. PAN: AMDPK8869N Vs. The Income Tax Officer, International Taxation 1(2), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Siva Nagaraju S, CA Revenue by : Smt. Suganthamala T M, CIT-DR Date of Hearing : 19-06-2025 Date of Pronouncement : 15-09-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the final assessment order of the AO dated 17/12/2024 in respect of the A.Y. 2016- 17 and raised the following grounds: “1. The order of the learned Assessing Officer/Respondent is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Addition of Rs. 20,02,382/- as Income from unexplained investments U/s.69 of Income-tax Act,1961 Printed from counselvise.com Page 2 of 6 IT(IT)A No. 261/Bang/2025 A. The learned Assessing Officer failed to appreciate the source of Rs. 20,02,382/- was from Appellant husband's bank account bearing A/c. No. 10005062082 held with State Bank of India, Thyagarajanagar and the same was supported by a copy of RTGS Slip and Cheque Leaf with due confirmation from bank. B. The learned assessing officer erred in confirming the said addition by misinterpretation of signature and the name on the cheque leaf and ignored the appellant's submission and the material on record. C. The learned assessing officer failed to appreciate the fact that the above said bank account bearing A/c. No. 10005062082 is of Mr. Krishnamurthy Vivek N (Appellant's husband) by disregarding his own findings in remand report. D. The learned assessing officer and Hon'ble Dispute Resolution Panel concluded the remand proceedings without providing reasonable opportunity to the appellant and the bankers. E. The appellant prays that the order passed under section 147 r.w.s. 144C be quashed and the impugned addition of Rs. 20,02,383/- be deleted. 3. The Learned Assessing Officer ought to have exercised reasonable inquiries a :thereby failed/erred to appreciate the procedure and the provisions as per section 148 and 148A of the Act and consequently erred in adding income of Rs. 20,02,382/- and consequently passed a perverse order on the facts and circumstances of the case. 4. The Appellant craves leave of this authority to add, alter, delete or substitute any or all of the above grounds as may be necessary at the time of hearing. 5. The Appellant craves leave of this authority to produce additional evidence as may be necessary at the time of hearing. 6. Wherefore the Appellant prays before this authority that the appeal may be allowed for the advancement of substantial cause of justice and equity.” 2. The assessee is a non-resident Indian (NRI) and the AO had specific information that she had invested in a property but no details were filed by her before the authorities. Notice u/s. 142(1) was issued on various dates Printed from counselvise.com Page 3 of 6 IT(IT)A No. 261/Bang/2025 and the assessee submitted that the investments in the immovable property was made out of the amounts transferred by her husband who is employed in USA and from the amount received from her mother-in-law. The assessee had not furnished any evidences about the amounts received from her mother-in-law. Therefore the AO had treated the said investment as unexplained investment u/s. 69 of the Act insofar as the amounts received from her mother-in-law. On that basis, a draft assessment order was made u/s. 144C of the Act for which the assessee filed objections before the Ld.DRP. Before the Ld.DRP, the assessee had filed additional evidences. The Ld.DRP directed the AO to send a remand report based on the additional evidences filed by the assessee. In the remand report, the AO had accepted that the assessee had submitted sources of funds for an amount of Rs. 18,96,704/- out of the proposed addition of Rs. 38,64,101/-. The AO had not accepted the documents filed in support of the balance amount of Rs. 20,02,382/- for the reason that the bank statement was not filed before him. Further, the AO issued a notice u/s. 133(6) of the Act to State Bank of India, Thyagrajnagar Branch and sought for the copy of the bank statement of the assessee’s husband. The said bank had not responded to the said notice and therefore the AO had not accepted the said explanation and made the addition of Rs. 20,02,382/-. 3. Based on the said report, the Ld.DRP had passed directions stating that the assessee had not established the sources of funds for an amount of Rs. 20,02,382/- and therefore directed to treat the same as unexplained investments u/s. 69 of the Act. 4. The AO based on the directions given by the Ld.DRP had concluded that the assessee had not submitted any details in respect of the investment made in the immovable property for a sum of Rs. 20,02,382/- and made the final assessment accordingly. 5. As against the said final assessment order, the assessee is in appeal before this Tribunal. Printed from counselvise.com Page 4 of 6 IT(IT)A No. 261/Bang/2025 6. At the time of hearing, the assessee filed an application to admit the additional evidences such as the bank statement from the State Bank of India, HDFC Bank and email communications made between the assessee and the State Bank of India and also the copies of the RTGS challan and the cheque issued for transferring the amount through RTGS. The assessee submitted that the said bank details were received by her after the order has been passed and therefore prayed to admit the said additional evidences filed before this Tribunal and thereafter decide the appeal. We have considered the said application and the additional evidences and accepted the reasons stated by the assessee for not producing the said documents before the lower authorities and therefore in the interest of justice, we admit the said additional evidences for deciding the said appeal. 7. The Ld.AR submitted that the property has been purchased from the monies transferred by the assessee’s husband who is working in USA and therefore the allegation that the said amount of Rs. 20,02,382/- as unexplained investment u/s. 69 is not correct. The Ld.AR also draw our attention to the RTGS challan, the cheque given for the said RTGS and the bank statements of the State Bank of India and the HDFC Bank to show that the amount was transferred by way of RTGS from the assessee’s husband’s account to the assessee’s account at HDFC Bank and thereafter the payment was made to the builder by way of cheque and therefore prayed that the appeal may be allowed. 8. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal. 9. We have heard the arguments of both sides and perused the materials available on record. 10. As seen from the additional evidences filed by the assessee that the assessee’s husband had transferred an amount of Rs. 20,00,000/- on 21/07/2015 into the bank account of the assessee and later on, on Printed from counselvise.com Page 5 of 6 IT(IT)A No. 261/Bang/2025 22/07/2015, the assessee had paid a sum of Rs. 20,02,382/- by way of cheque to the builder M/S Prestige Altavista. We have also perused the bank statement given by the State Bank of India in support of the said transactions. We have also gone through the RTGS challan dated 21/07/2015 and the State Bank of India NRE account cheque of the assessee’s husband for transferring the money through RTGS. Admittedly, the RTGS cheque was issued from the State Bank of India account of the assessee’s husband which was signed by the assessee’s mother-in-law as the authorised signatory for operating the said NRE account. We have also perused the RTGS challan in which the account number of the assessee in the HDFC Bank has been mentioned and the RTGS is also in favour of the assessee. Therefore from the said documents, we came to know that the assessee had received a sum of Rs. 20,00,000/- by way of RTGS from the account of the assessee’s husband on 21/07/2015 and thereafter the said RTGS amount was utilised for paying to the builder M/s. Prestige Altavista on 22/07/2015. 11. The said documents were not made available before the AO or before the Ld.DRP and therefore in order to give an opportunity to the AO, we are remitting this issue to the file of the AO for considering the additional evidences now filed by the assessee and if the same are found to be in order, delete the addition made u/s. 69 of the Act insofar as the amount of Rs. 20,02,382/- is concerned. 12. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 15th September, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 15th September, 2025. /MS / Printed from counselvise.com Page 6 of 6 IT(IT)A No. 261/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "