MITA CHATTERJEE,KOLKATA vs. INCOME TAX OFFICER, NEW DELHI

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ITA 5985/DEL/2024Status: DisposedITAT Delhi30 May 2025AY 2011-126 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 70,46,028/- made in the hands of the assessee towards the acquisition of the property was wrongly made. The Tribunal noted that the property was purchased in the joint name of the assessee and her husband, Shri Shyamlendu Chatterjee, for a total consideration of Rs. 59,13,680/- (as per the purchase deed dated 30.04.2010). Crucially, the entire investment was made by the husband, who had disclosed this transaction in his return of income for AY 2011-12 and claimed deduction under Section 54 of the Act against capital gains from the sale of another property. This fact remained uncontroverted by the revenue. The Tribunal observed that no action was taken by the revenue against the husband, who made the entire investment and disclosed it. Therefore, since no investment was made by the assessee and she was only included as a co-owner, the addition was deleted. Grounds of appeal No. 2 & 3 were allowed.

What were the facts?

The assessee, Smt. Mita Chatterjee, is an individual. The Income Tax Officer (AO) reopened her case for Assessment Year 2011-12 based on information that she had purchased an immovable property for Rs. 70,46,028/-. As no return was filed, the AO issued notices under sections 133(6) and 148, which were not complied with. The assessment was completed ex-parte, adding Rs. 70,46,028/- as unexplained investment. The assessee appealed to the CIT(A), who dismissed the appeal. The assessee then filed an appeal before the ITAT. The property was purchased in the joint names of the assessee and her husband, Shri Shyamlendu Chatterjee, out of the husband's funds, which were derived from the sale of another property. The husband had disclosed this transaction and claimed deduction under Section 54 in his return for AY 2011-12.

What were the issues?

1. Whether the assessment proceedings under Section 147 of the Income Tax Act, 1961, were validly initiated without proper service of notice under Section 148 of the Act? (Mixed law and fact) 2. Whether the reassessment proceedings and the issuance of notice under Section 148 were justified? (Mixed law and fact) 3. Whether the addition of Rs. 70,46,028/- on account of unexplained investment in the acquisition of immovable property was justified, given that the property was purchased by the assessee's husband from his own funds and the assessee was only a joint holder? Assessee's contentions: - Grounds 1 and 2 were not pressed and were dismissed. - Regarding Ground 3, the assessee argued that she made no investment in the property. The property was purchased by her husband, Shri Shyamlendu Chatterjee, out of his own funds, which were derived from selling another property. The husband disclosed this transaction and claimed deduction under Section 54 in his return for AY 2011-12, which was accepted by the department. The assessee was merely a joint holder (second name) in the purchase deed. Therefore, the addition made in her hands was wrong and deserved to be deleted. Revenue's contentions: - The assessee failed to file any reply before the AO. - Before the CIT(A), the assessee failed to establish the sources in the hands of her husband by not filing his bank statements. - Merely filing the husband's return of income did not establish that he made the investments.

Which sections of the Income-tax Act were involved?

Section 147,Section 133(6),Section 148,Section 250,Section 144,Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

Before: MS. MADHUMITA ROY & SHRI MANISH AGARWAL

For Appellant: Shri Ashwani Kumar, CA, Shri Ankur Agarwal, CA &, Ms. Muskan Garg, CA
For Respondent: Shri Virender Kumar Singh, Sr. DR
Hearing: 05.05.2025Pronounced: 30.05.2025

(ASSESSMENT YEAR- 2011-12) Smt. Mita Chatterjee, Income Tax Officer, Flat No. 17K, Tower-1, South Ward-69(1), D Block, City Apartment, 375, Prince Vs. Pratyaksh Kar Bhawan, Anwar Shah Road, Kolkatta, Civic Centre, West Bengal-700068 New Delhi-110002. PAN-AASPC7078C (Appellant) (Respondent) Assessee by Shri Ashwani Kumar, CA, Shri Ankur Agarwal, CA & Ms. Muskan Garg, CA Department by Shri Virender Kumar Singh, Sr. DR Date of Hearing 05.05.2025 Date of Pronouncement 30.05.2025 O R D E R

PER MANISH AGARWAL, AM:

1.

This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi [“Ld. CIT(A)”], dated 03.12.2024 in Appeal No. CIT (A), Delhi- 21/11557/2019-20 passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for Assessment Year 2011-12.

2.

The appellant is an individual and the case of the assessee was re-opened based on the information uploaded by the sub-registrar that the assessee had purchased an immoveable property for Rs.70,46,028/- during the year under consideration. Since no return of income was filed by the assessee, the AO issued a notice u/s.133(6) of the Act to explain the source of the said investment. When no reply was received, the case of the assessee was re- opened u/s 147 of the Act after receiving prior approval from the competent authority and notice u/s.148 of the Act was issued upon the assessee on 31.03.2017. No return was filed by the assessee in response to the said notice. Thereafter, various notices were issued to the assessee, but all remained uncompiled with. Thereafter, the assessment was completed vide order dated 28.12.2018 wherein the addition of Rs. 70,46,028/- was made as unexplained investment in acquisition of the property.

3. Against such order, assessee preferred appeal before ld. CIT(A) who vide impugned order dated 03.12.2024 had dismissed the appeal of the assessee.

4. Aggrieved by the said order of ld. CIT(A), assessee filed present appeal before the Tribunal on the strength of following grounds of appeal:

1. That the order dated 03.12.2024 passed u/s 250 of the Income - tax Act, 1961 (hereinafter called the "Act") by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Income Tax Officer, Ward 69(1), New Delhi:- (i) in making assessment u/s 147 of the Act in the case of Appellant without proper service of notice u/s 148 of the Act, (ii) in resorting to reassessment proceeding and issuing notice u/s 148 of the Act.

2. That the order dated 03.12.2024 passed u/s 250 of the Act by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Income Tax Officer, Ward 69(1), New Delhi in making addition of Rs. 70,46,028/- on account of amount utilized for purchasing immovable property, by completing the assessment proceedings ex-parte u/s 147 r.w.s. 144 of the Act without providing proper opportunity of being heard to the Appellant.

3.

That the order dated 03.12.2024 passed u/s 250 of the Income - tax Act, 1961 (hereinafter called the "Act") by the Commissioner of Page | 2 Income Tax (Appeals), National Faceless Appeal Centre (NFAC) is against law and facts on the file in as much as he was not justified to uphold the action of the Ld. Income Tax Officer, Ward 69(1), New Delhi in making addition of Rs. 70,46,028/- on account of amount utilized for purchasing immovable property, whereas the Appellant had not invested any sum in the said Property which was purchased by her husband Sh. Shyamlendu Chatterjee- PAN-AAIPC6471F out of his own financial resources and the Appellant was the Joint holder (Second Name) only.

4.

That the Appellant craves to add, amend, alter, modify or delete any or all of the grounds of appeal before or at the time of hearing.

5.

During the course of hearing, ld. AR of the assessee has not pressed the ground of appeal No. 1 and thus the same is dismissed.

6.

Grounds of appeal No. 2 & 3 are in relation to the addition of Rs. 70,46,028/- made by holding that the assessee has made unexplained investment in the acquisition of property. Since both the grounds are pertained to one issue of unexplained investment in acquisition of property, therefore they are taken together and decided as under.

7. Before us, the Ld. AR of the assessee submitted during the year under consideration husband of the assessee Shri Shyamlendu Chatterjee, had purchased a flat in Kolkata out of his own funds and assessee was the joint owner in the said property. Ld. AR further submitted that the immediate source was out of the funds available with the assessee’s husband who during the year, had sold one property at Gurgaon and invested the consideration in acquisition of the aforesaid property at Gurgaon. It is further submitted that husband of the assessee claimed deduction u/s 54 of the Act against the capital gains earned from the sale of property and the entire transaction was disclosed in the return of income filed for Assessment Year 2011-12 by him, a copy of the same is placed in the paper book pages 12 to 22 filed by the assessee. It is further submitted that the assessee has not made any investment. The copy of the purchases deed of the said property is also placed on record, according to which the said property was purchased by the husband of the assessee under the joint name of the assessee as co-owner. In the last, it is submitted that no action was taken by the Department in the case of husband of assessee who had disclosed this transaction in his return of income filed and the department had accepted the claim of deduction u/s 54 made towards purchases of property under reference. It is, therefore, submitted that neither the said property was acquired by the assessee nor any payment whatsoever with respect to the acquisition of property was made by the assessee and thus the addition made deserves to be deleted.

8. On the other hand, ld. Sr. DR vehemently supported the orders of the lower authorities and submitted that assessee has failed to file any reply before the AO. He further argued that before the ld. CIT(A), assessee has failed to establish the sources in the hands of her husband by not filing his bank statements. Ld. Sr. DR further submitted, that merely filing the return of income of the husband could not establish that he had made the investments. Therefore, ld. Sr. DR prayed for the confirmation of the orders of the lower authorities.

9.

We have heard the rival submissions and perused the material available on record. In this case, AO had information that the assessee had made investment of 70,46,028/- in acquisition of property and had not filed her return of income, thus the source remained unexplained. It is the claim of the assessee that during the year under appeal, husband of the assessee Shri Shyamlendu Chatterjee (PAN: AAIPC6471F) had purchased a flat No. K-17, Tower 1, South City, 375, Anwar Shah Road, Kolkata in terms of the purchases deed executed on 30.04.2010 for a total consideration of Rs. 59,13,680/-, a copy of the same is placed in the paper book at pages 6-11. The said property was purchased in joint name of the assessee however, the entire investment in the acquisition of the said property was made by her husband who has disclosed the said transaction in his return of income filed for assessment year 2011-12. As none of the notice was received by her, therefore no explanation could be tendered before the AO. From the perusal of the return of income filed by the husband of assessee, it is seen that he has claimed deduction under Section 54 of the Act against the capital gains earned on the sale of another property at Gurgaon and the entire gain was invested in acquisition of new property at Kolkata. This fact remained uncontroverted by the revenue.

10.

From the above discussion, we concluded that no investment was made by the assessee in acquisition of the property and therefore, no addition could be made in her hands. It is also a matter of fact that no action was taken by the revenue in the case of the husband of assessee who had made the entire investment and disclosed this transaction in his return of income filed for AY 2011-12. In view of these facts and circumstances of the case, the addition of Rs.70,46,028/- was wrongly made in the hands of the assessee towards the acquisition of the said property where the assessee’s name was included as co- owner only. Accordingly, the addition of Rs.70,46,028/- is hereby deleted. The grounds of appeal

No. 2 & 3 taken by the assessee are allowed.

11. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 30.05.2025.

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