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Facts
The assessee purchased a property with her husband as a joint owner for Rs. 85,00,000/-. The Assessing Officer (AO) noted that the husband paid Rs. 43,00,000/- from his account, including a loan, while the assessee paid only Rs. 10,00,000/-. The AO added Rs. 20,00,000/- (half of the unexplained Rs. 40,00,000/-) to the assessee's income.
Held
The Tribunal found that while the assessee claimed to be a joint owner for convenience, she failed to substantiate the source of Rs. 20,00,000/- in her name. However, considering the peculiar facts and the lack of clarity on her husband's case, the Tribunal remanded the issue back to the AO for fresh verification.
Key Issues
Whether the assessee's claim of being a joint owner for convenience, without substantiating the source of investment, warrants an addition to her income, or if the matter requires further verification by the Assessing Officer.
Sections Cited
250, 1961, 69, 148, 148(A)(d)
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 21.03.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2016-17.
In the instant case, Agreement for sale of property under consideration i.e. Flat No. 302, 3rd floor, Meridian Meadows, Navi Mumbai, which was purchased on total consideration of Rs. 85,00,000/- showing joint ownership of the Assessee and her husband, was registered with the Registration Authority on dated 29.10.2015. The Assessing Officer (AO) by noticing the facts and examining the bank statement of assessee’s husband Mr. Umesh Vaishali Umesh Naik Naik, observed that the amount of Rs. 43,00,000/- only has been paid to the developer from Mr. Umesh Naik account including the loan amounting to Rs. 28,00,000/- taken by him from Karnataka Bank. Whereas, the assessee has paid only Rs. 10,00,000/- from her own account and therefore the assessee has failed to file evidence to prove the balance payment of Rs. 40,00,000/-. The Assessing Officer accordingly made the addition of Rs. 20,00,000/- (half of Rs. 40,00,000/- which was treated as unexplained) in the hands of the Assessee being joint owner in the said property, which remained to be explained u/s. 69 of the Act and consequently added to the income of the assessee.
The assessee though challenged the said addition by filing the first appeal before the ld. Commissioner, however, it appears from the impugned order that the assessee failed to explain the source of payment of balance amount of Rs. 40,00,000/- either from her own account or her husband. Thus, the Ld. Commissioner affirmed the aforesaid addition of Rs. 20,00,000/-.
The assessee therefore being aggrieved preferred the instant appeal and at the outset has claimed that her name was included as the joint holder in the sale deed for the convenience and future safety purposes. The assessee further claimed that during the assessment proceedings, she has duly furnished the copy of agreement for sale, her own bank details and her husband, but still both the authorities below failed to consider the same. The assessee supported her contention that she is a co-owner in the property document just for succession purposes etc. by relying on a judgment passed by Hon’ble High Court in the case of Hetal Vipul Shah vs. CIT (2025) 177 taxman.com 470 (Bombay), wherein it was explained by the then Assessee that she was a housewife and purchase of the flat has been done entirely by her husband from his Vaishali Umesh Naik own funds and sources and not by her. The then Assessee also further stated that she had not contributed anything towards purchase of said flat and her name was added only for the sake of convenience. She also produced purchase agreement, as well as bank statement of her husband, which indicated that entire consideration was paid by her husband only and therefore considering the aforesaid peculiar fact and circumstances, the Hon’ble High Court quashed the notice issued u/s 148 of the Act, by allowing writ petition filed by the assessee.
The assessee further relied on the judgment in the case of Kalpita Arun Lanjekar Vs ITO (2024) 160 taxman.com 726 (Bombay), wherein the Hon’ble Jurisdictional High Court by considering the peculiar facts that property was purchased by assessee’s husband and all payment were made by him only and the then Assessee’s name was though included as joint holder in agreement for sale, but no payment was made by her and the Assessing Officer had accepted that the assessee has not made payment for purchase of property. Thus, on the aforesaid reasons, the Hon’ble High Court quashed the notice issued u/s 148(A)(d) of the Act.
Though we are in the agreement with the claim of the assessee the judgments referred to above are having involved identical issue, however, in this case, it is the fact that the assessee failed to substantiate its claim qua payment of Rs. 20,00,000/- being joint owner of the property, but simply claimed that she is just a co-owner of the property for the name shake only. And therefore the judgements referred to are not strictly applicable to the facts of this case, as in the aforesaid cases, the then Assessees have duly demonstrated the payments made for purchase of
Though this Court has also given opportunity to the assessee to file the relevant documents and charts containing the details of payment made by the assessee and her husband and bifurcating the amounts paid and details of the bank entries by attaching the bank statement, however the assessee has failed to file such details and documents. The Assessee may be was inducted in the Agreement for sale, as a co-owner for future safety, succession purposes etc., however, it is a fact that the assessee has failed to establish payments of Rs. 20,00,000/- at least, made in respect of property purchased, which requires further consideration. Before us, both the parties have also failed to bring on record, as to what has happened in the assessee’s husband case, being a co-owner of the property.
6.1 Thus, considering the peculiar facts and circumstances in totality, for just and proper decision case and substantial justice, we deem it appropriate to remand the issue qua addition of Rs. 20,00,000/- being made as unexplained investment on account of assessee, to the file of Jurisdictional Assessing Officer for verification of the facts, such payments and to decide afresh the issue accordingly.
6.2 The assessee is also directed to file the relevant details and documents qua payment of Rs. 20,00,000/- at least, made in respect of sale consideration before the JAO.
Thus, the case is accordingly remanded to the file of the AO for decision afresh in the above terms.
Order pronounced in the open court on 31.10.2025.