KAMAL BHANDARI,KOLKATA vs. I.T.O., WARD - 4(3), KOLKATA, KOLKATA

The brief facts of the case are that during the assessment proceedings, the Assessing Officer found that the assessee had made total investments of Rs.2,80,00,000/- in the name of his mother namely Smt. Gulab Kunwar Bhandari, wife namely Smt. Puspa Bhandari and also in the name of his HUF. The Assessing Officer further observed that out of the said investment of Rs.2,80,00,000/-, Rs.241.30 lakhs were invested in the F.Y 2005-06 relevant to A.Y 2006-07 and the remaining Assessment year: 2007-08 Kamal Bhandari amount of Rs.39 lakhs were invested during the F.Y relevant to A.Y under consideration. The Assessing Officer held that the assessee could not prove the source of the aforesaid investments made by him in the name of his mother, wife and HUF. The Assessing Officer further observed that the aforesaid persons namely Smt. Gulab Kunwar Bhandari, Smt. Puspa Bhandari and HUF of the assessee were not having independent source of income for making the aforesaid investment. In an assessment carried out for A.Y 2006-07, the Assessing Officer had already added the amount of Rs.241.30 lakhs as undisclosed income of the assessee. Further, for the year under consideration i.e. A.Y 2007-08, the Assessing Officer added the balance amount of Rs.39 lakhs into the income of the assessee. The matter relating to the additions made by the Assessing Officer in the assessment for A.Y 2006-07 travelled to the Tribunal.

The ld. CIT(A) in the impugned order has noted that the Tribunal accepted the contentions of the assessee that the investment was made by his mother and wife out of sale proceeds received on account of sale of property in Delhi and further that the investments belonged to them and not to the assessee. The ld. CIT(A) considering the above circumstances deleted the addition of Rs.34,00,000/- relating to the investment made by the mother and wife of the assessee for the year under consideration. However, the ld. CIT(A) confirmed the addition of Rs.5,00,000/- made in the name of the HUF of the assessee holding that the assessee could not prove the source of the HUF to make the aforesaid investment in mutual funds.

Before us, the ld. counsel for the assessee has relied upon the balance sheet of the HUF to submit that the HUF of the assessee had