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Facts
The assessee purchased property for ₹4.70 Crores. The AO accepted ₹3.50 Crores as loan from HSBC Bank but added ₹1.20 Crores as unexplained investment, presuming it was paid in cash. The CIT(A) upheld this addition. The assessee claimed the cheques for the balance amount were not encashed due to the builder's failure to complete fittings and fixtures.
Held
The Tribunal found that the AO and CIT(A) had wrongly applied Section 69 of the Act. The matter was restored to the Assessing Officer for de novo assessment after considering the assessee's claim regarding DTAA benefits and the factual verification of cheque non-encashment.
Key Issues
Whether the addition under Section 69 for unexplained investment is justified, and whether the assessee is eligible for DTAA benefits under the India-Saudi Arabia treaty.
Sections Cited
147, 144, 148, 151, 144B, 69, 115BBE, 234A, 234B, 270A, 271AAC, 44AA, 132, 133A, 90(2)
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Income Tax Appellate Tribunal, DELHI BENCH, ‘D’: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH
order) also admits that until and unless it is proved that the amount of Rs.1,20,00,000/- has some nexus with India or has been earned in India, such amount cannot be taxed in the Appellant's hands in India. Therefore, without going into the merits of his claim, the assessee is at liberty to raise the said claim before the Assessing Officer and Assessing Officer is directed to decide the claim of the assessee as per law.
13.2. Ground No. 7 to 10 of the appeal are allowed for statistical purposes.
Ground no.11 is against the levy of interest u/s 234A and 234B of the Act. The same is consequential in nature and the Assessing Officer will levy interest as per law.
14.1. In the result, ground no.11 is allowed for statistical purpose.
Ground no.12 is against the initiation of penalty proceedings u/s 270A and u/s 271AAC of the Act. This ground of appeal is premature and hence dismissed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 22nd July, 2025