VARUN CHAUDHRY,GHAZIABAD vs. ITO WARD - 2(5), GHAZIABAD

In the grounds of appeal, the assessee has challenged the validity of reopening u/s 147 of the Act and also challenged the addition of Rs.20,88,510/- as undisclosed investment.

Facts, in brief, are that the assessee is an individual and during the AY 2009-10, he was a student and did not had any source of income and was dependent on his parents. An AIR information was ./2019 received that assessee has purchased immovable property of Rs.41,67,000/- in the FY 2008-09 at Village Bahadurpur, Jansath, Distt. Muzaffarnagar and accordingly, a notice u/s 148 was issued. As per the AO, no compliance was made on various notices sent to him, therefore, he treated the entire investment made of Rs.41,67,000/- which was mentioned in the sale deed along with stamp duty on account of undisclosed investment and made addition thereof on account of undisclosed investment and passed an order u/s 147/144 of the Act.

Before the ld. CIT (A), it was submitted on behalf of the assessee that, assessee had a joint saving bank account in the Punjab National Bank jointly with his father, Shri Inderjeet and the payment for purchase of plot was made out of withdrawal of Rs.48,00,000/- from the said account on 24.02.2009, i.e., a day before the purchase deed was signed on 25.02.2009. It was also brought to the notice that assessee’s share was only 50% and further 50% belonged to his mother. In support, the assessee had filed additional evidences and banks statement which were admitted by the ld. CIT (A) and were sent to AO for remand report. The AO had only stated that assessee had not disclosed the source of investment regarding the purchase of property. Ld. CIT (A) has treated half of the share of purchase price as undisclosed investment of the assessee by observing as under :-

Before us, ld. Counsel for the assessee submitted that the assessee was a student during the relevant assessment year and the source of money had come from bank account of his father who jointly holds the account with the assessee. He drew our attention to pages 5 & 6 of the paper book which is relevant bank statement and pointed out that there was a cash withdrawal of Rs.48,00,000/- one day before the purchase deed and prior to this date, there was loan of Rs.26,40,000/- which was raised against FDR which was credited on 20.02.2009. The amount was withdrawn from the bank in cash and payment was immediately made, therefore, source of investment was duly explained from the withdrawals from bank account. On the other

After considering the relevant findings given in the impugned order as well as material placed on record, we find that it is an undisputed fact that the assessee had purchased agricultural land on 25.02.2009 and only 50% of the share belonged to the assessee and other 50% belonged to his mother. In case of mother, no action has been taken. AO has added the entire amount despite noting the fact that assessee was having only one-half share of the property. Be that as it may, before the ld. CIT (A), assessee had filed bank statement and certificate from the bank that loan of Rs.26,40,000/- was raised which was credited in the bank account of the assessee against FDR raised by Shri Inderjeet, his father and Varun Chaudhary. From the perusal of the bank statement, it is seen that it is in the joint name of Shri Inderjeet, father of the assessee and the assessee who was a student. The bank statement reveals that there are substantial credit in the bank account which were mostly through clearing. On 24.02.2009, an amount of Rs.48,00,000/- was withdrawn by self cheque and cash payment was made for the purchase deed as mentioned in the deed itself. Once these facts have been brought on record that source of money has come from bank account in which his father was a major account holder and nothing was asked from the father to explain the source which was mostly by clearing. The source of withdrawal is clearly evident from the sufficient funds in bank account and also loan was raised which has been credited in the bank account day before. Once amount has been shown in the bank statement and withdrawal is made for making the purchase one day before the purchase deed, it cannot be held that the source remained unexplained. ./2019 7. Apart from that, assessee was a student at that time and later on, he passed his MBBS course and became a Doctor and till that time, he was dependent on his father. Once the assessee adduced these evidences, we do not find any reason as to why addition on account of unexplained investment can be made in the hands of assessee as the source is proved from the bank statement. Thus, addition sustained by the ld. CIT (A) is deleted and the appeal filed by the assessee is allowed.