MAHABOOB BASHA MOHAMMAD,KAKINADA vs. THE INCOME TAX OFFICER, WARD-1, KAKINADA

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ITA 652/VIZ/2019Status: DisposedITAT Visakhapatnam27 November 2020AY 2014-20153 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had obtained jewel loans totaling Rs. 3,00,000/- from Syndicate Bank prior to the property purchase. Therefore, the source of funds was adequately explained, and the addition made by the AO was unjustified.

What were the facts?

The assessee purchased a house property and the Assessing Officer (AO) doubted the source of Rs. 3,00,000/-. The assessee initially claimed it was from selling gold belonging to his wife and mother-in-law but failed to provide evidence. The AO added this amount to the total income.

What were the issues?

Whether the addition made by the AO on account of unexplained investment in property is justified when the assessee subsequently provided evidence of jewel loans as the source of funds.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE

For Appellant: Shri M.Gangaraju Sharma, CA
For Respondent: Shri B. Rama Krishna, Sr.DR
Hearing: 26/11/2020

Date of hearing : 26/11/2020. Date of pronouncement : 27/11/2020. O R D E R This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-2, Guntur, dated 11/09/2019 for the Assessment Year 2014-15.

2.

Facts of the case in brief are that the assessee had purchased a house property worth Rs.22,29,390/- on 28/06/2013. The assessee has explained the source for Rs.19,29,390/-. When the AO has doubted the source of Rs.3,00,000/-, it was submitted that gold belonging to his wife and mother-in-law was sold, 2 (Mahaboob Basha Mohammad) however, the assessee has not produced relevant evidence before the AO, therefore the AO added the same to the total income of the assessee u/sec. 69 of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 3. On appeal, ld. CIT(A) confirmed the order of the AO. 4. On appeal before the Bench, ld.AR has submitted that assessee has taken jewel loans from the Syndicate Bank Dairy Farm Central Branch, Kakinada as follows:-

1.

1.

A/c. No. 32621280000878 10/06/2013 Rs. 2,41,000/- 2. A/c No.32621280000882 10/06/2013 Rs. 1,20,000/- 3. A/c No.32621280000936 18/06/2013 Rs. 81,000/- Out of which, Rs. 3,00,000/- was invested in a new property. He also filed a confirmation letter from the Syndicate Bank, dated 14/11/2019. Insofar as explanation given before the AO is concerned, it was submitted that the source was wrongly explained, however, the fact remains that the assessee’s wife gold as well as mother-in-law gold was sold to one K.Periaswamy on 25/07/2013 to clear the jewel loans obtained from Syndicate Bank.

5. Ld.DR strongly relied on the orders of the authorities below.

6. I have heard both the parties and perused the material available on record.

3 (Mahaboob Basha Mohammad) 7. The only dispute in this appeal is in respect of Rs. 3,00,000/- The property was purchased by the assessee on 28/06/2013 and the assessee has obtained jewel loans of Rs.2,41,000/-, Rs.1,20,000/- and Rs. 81,000/- on 10/06/2013, 10/06/2013 and 18/03/2013 respectively. Therefore, I find that assessee has explained the source fully, hence, addition cannot be made u/sec. 69 of the Act. Thus, the order passed by the ld. CIT(A) is set aside and allow the appeal of the assessee.

8.

In the result, appeal filed by the assessee is allowed. Order Pronounced in open Court on this 27th day of Nov., 2020.

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