UDAY RAMESH NAYAK,VADODARA V. THE ACIT, CIRCLE - INT. TAXATION, VADODARA

ITA 415/AHD/2024

AI Insights

The case involves an appeal by Uday Ramesh Nayak against the order of the Commissioner of Income Tax (DRP-2), Mumbai, which had earlier confirmed an addition of Rs. 13,72,952 to the assessee's income for the Assessment Year 2018-19. This addition was initially made by the Assistant Commissioner of Income Tax, International Taxation, Vadodara, under Section 69 of the Income Tax Act, considering the amount as unexplained investment in property. The Tribunal's decision was based on the evidence provided, which demonstrated that the disputed amount was sourced from the maturity of fixed deposits of the assessee's wife, a joint owner of the property.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473808 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• 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: SANJAY K. LAL
• Assessee Lawyers: SANKET BAKSHI
• Keywords: Additional evidence; Unexplained investment
• Section: 69; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.415/Ahd/2024 (Assessment Year: 2018-19) Uday Ramesh Nayak, 310/B, Rajkamal Society, B/h. Shrenik Park Akota, Vadodara-390020 Vs. Assistant Commissioner of Income Tax, Circle International Taxation, Vadodara-390007 [PAN No.AAQPN2592Q] (Appellant) .. (Respondent) Appellant by : Shri Sanket Bakshi, A.R. Respondent by: Dr. Sanjay K. Lal, CIT DR Date of Hearing 11.03.2025 Date of Pronouncement 19.03.2025 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 (DRP-2), (in short “Ld. CIT”), Mumbai-1 vide order dated 26.12.2023 passed for A.Y. 2018-19. 2. The Assessee has taken the following grounds of appeal:- “1. The learned Dispute Resolution Panel, Bench – 2, Mumbai (“the DRP”) and the Assistant Commissioner of Income Tax, International Taxation, Vadodara (“the AO”) erred in fact and in law in considering Rs. 13,72,952/- paid towards the purchase of house property as unexplained and thereby making an addition u/s. 69 of the Act. 2. The learned DRP and the AO erred in fact and in law in making addition of Rs.13,72,952/- to the total income of the Appellant despite the fact that no such amount was paid by the Appellant. 3. The learned AO erred in fact and in law in computing interest u/s. 234A of Rs.6,78,784/- under the Act. 4. The learned AO erred in fact and in law in computing interest u/s. 234B of Rs. 7,42,420/- under the Act. 5. The learned AO erred in fact and in law in computing interest u/s. 234F of Rs.10,000 under the Act. ITA No. 415/Ahd/2024 Uday Ramesh Nayak vs. ACIT Asst.Year –2018-19 - 2– 6. The AO erred in fact and in law in initiating proceedings u/s.271AAC of the Act. 7. The Appellant reserves the right to alter, amend, substitute, delete or modify all or any of the above grounds of objections.” 3. At the outset, we observe that the appeal is time barred by 03 days. The delay of 03 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side. 4. The brief facts of the case are that the Assessing Officer received information that assessee had purchased an immovable property, being Flat No. 1604, Zinnia Vasant Oasis, Andheri (East), Mumbai on 29.08.2017 for a total consideration of Rs. 2,16,50,000/-. When asked for the source of investment in the property, the Assessing Officer noted that the assessee only furnished interest certificate from which the source of investment in property was not explained. Accordingly, the Assessing Officer made an addition of Rs. 2,16,06,693/- being unexplained investment in property under Section 69 of the Act. 5. The assessee filed objections before DRP and produced additional evidences in the form of bank statement of ICICI Bank, HDFC Bank loan statement and copy of cheques paid to the developer. The DRP, on appreciation of evidence placed on record by the assessee, give substantial relief to the assessee and restricted the addition to Rs. 13,72,952/- with the following observations: “6.3.4 With regard to the ld. AO's primary objection to the admission of additional evidence, the Panel concludes that there were sufficient causes which led to the non submission of complete and specific details before the AO. The assessee has submitted the relevant documents in support of the claim like interest certificate on loan account and other details but due to some misunderstanding the details as required by the ld AO was not submitted by the assessee. The additional evidences submitted now are directly linked to the submissions made before the AO and the Panel is of the opinion that the assessee has not deliberately withheld information to mislead the ld. AO. Hence the additional evidences are admitted. ITA No. 415/Ahd/2024 Uday Ramesh Nayak vs. ACIT Asst.Year –2018-19 - 3– 6.3.5 Coming to the merits of the case, the evidences were forwarded to the AO who has considered them and is satisfied to the extent of Rs 2,02,76,933. Hence an amount of Rs 13,72,952 only remains to be explained. The assessee has in his rejoinder mentioned that it belongs to his spouse and produced copy of the Bank of India statement (A/c No. 0090********8466). From the perusal of the bank account the amount of Rs 13,72,952 is not reflected and hence the amount remains still unexplained. 6.3.6 The ld AO is directed to delete the addition of Rs 2,02,76,933 made as unexplained investment under section 69. The remaining amount of Rs 13,72,952 is to be added as unexplained under the same section.” 6. The assessee is in appeal before us and submitted that the Ld. DRP failed to appreciate that the balance amount of Rs. 13,72,952/- was also fully explained. The Counsel for the assessee submitted that it is on record that the wife of the assessee is a joint owner of the property. Further, the Counsel for the assessee submitted that the source of income for the balance amount of Rs. 13.72 lakhs was from in proceeds of fixed deposits held by the spouse of the assessee. The Counsel for the assessee also drew our attention to the relevant pages of the Paper Book submitted before us and argued that from the relevant bank statement, it is clear that the balance amount of Rs. 13.72 lakhs was paid by way of maturity of fixed deposits and that all transactions were carried out through banking channels. 7. In response, the Ld. D.R. placed reliance on the observations made by DRP in the order passed by it. 8. We have heard the rival contentions and perused the material on record. 9. On going through the relevant pages of Paper Book, we observe that it is an undisputed fact that the spouse of the assessee was also the joint owner of the property. Further, on going through the bank statement of the spouse of the assessee, it is seen that the balance amount was paid ITA No. 415/Ahd/2024 Uday Ramesh Nayak vs. ACIT Asst.Year –2018-19 - 4– by the wife of the assessee directly to M/s. Neepa Real Estates Ltd., through bank transfer on 26.03.2019. Further, we also observe that in order to pay the aforesaid amount to M/s. Neepa Real Estates Ltd., the wife of the assessee utilized her fixed deposits held with Bank of India. The said fixed deposits were encashed by the spouse of the assessee on 20.03.2019 and thereafter, the same were utilized to make payment to M/s. Neepa Real Estates Ltd, through banking channels (refer Pages 57, 62 of the Paper Book). 10. Accordingly, in our considered view, on going through the bank statement of the spouse of the assessee, the source of investment in the immovable property referred to above amounting to Rs. 13.72 lakhs has been fully explained by the assessee, as coming out of maturity amount of fixed deposits held by the assessee’s wife. 11. Accordingly, keeping in view the assessee’s set of facts, the additions are hereby directed to be deleted. 12. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 19/03/2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 19/03/2025 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 "