POORNIMA SANJAY PRABHU,MUMBAI vs. ASSESSMENT UNIT, FACELESS ASSESSMENT CENTRE
IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH
MUMBAI
BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER
&
MS. RENU JAUHRI, ACCOUNTANT MEMBER
Poornima Sanjay Prabhu
Shell Colony
Chembur, Mumbai- 400
071
Vs. Income
Tax
Officer
Ward- 27(2)(1), Mumbai
PAN/GIR No.BZQPP3211E
(Appellant)
..
(Respondent)
Assessee by Shri Keshav Bhujle
Revenue by Shri Virabhadra S Mahajan,
Sr. DR
Date of Hearing
17/07/2025
Date of Pronouncement
30/09/2025
आदेश / O R D E R
PER AMIT SHUKLA (J.M):
The aforesaid appeal has been filed by the assessee against order dated 28/02/2025 passed by NFAC, Delhi for the quantum of assessment passed u/s.147 r.w.s. 143(3) for the A.Y.2017-18. 2. The assessee is merely aggrieved by addition of Rs.1,76,16,200/- with respect to purchase of immovable property from undisclosed sources and also the validity of reopening u/s.147 on various grounds.
Poornima Sanjay Prabhu
2
3. The brief facts qua the issue involved with regard to addition made by the ld. AO and the background of the case as culled out from the record and also stated before us that the assessee, Mrs. Poornima Prabhu (PAN: BZQPP2311E), is a Non-Resident Indian, residing in the United Arab Emirates for over two decades with her husband, Mr. Sanjay Prabhu. For the previous year relevant to AY 2017–18, the assessee visited
India only for 45 days and was, therefore, a Non-Resident within the meaning of section 6 of the Act. She is a homemaker without any source of income chargeable to tax in India and hence was under no obligation to file a return of income for the year under consideration.
4. The assessee’s husband, Mr. Sanjay Prabhu (PAN:
APCPP0054Q), is also an NRI. He has been employed since
1995 in the UAE as the CEO of Solas Marine LLC, a reputed international concern. His income comprises salary and savings abroad, as well as rental and interest income in India.
For FY 2016–17 (relevant to AY 2017–18), he earned a salary of AED 801,000, equivalent to ₹1,41,45,660, and was assessed in India in the status of Non-Resident. His return for AY 2017–18 was duly filed on 21/07/2017 and processed u/s 143(1) by intimation dated 13/01/2018. 4. On 30/06/2015, Mr. Sanjay Prabhu booked a flat in a redevelopment project by Godrej Developers at Mumbai. The Sale Agreement was executed and registered on 29/06/2016
for an agreed consideration of ₹1,76,16,200/– in the joint names of himself (as the first owner) and his wife, the asssessee (as the second owner). Possession was taken on Poornima Sanjay Prabhu
3
20/06/2020. The entire consideration was funded solely from the independent resources of Mr. Sanjay Prabhu. The assessee, being a homemaker, did not contribute any sum, and her name was included as joint owner merely for convenience, a normal practice in India.
5. Around the same time, Mr. Sanjay Prabhu sold his old flat in Bangalore on 19/08/2016 to Mr. Amlesh Vijay Sane for ₹88,50,000/–, duly reflected in his Form 26AS for AY 2017–
18. The proceeds were deposited into his NRO account and utilised for the Godrej investment. The balance payments were made through his NRE/NRO accounts, supported by banking records and his affidavit, thereby establishing that the entire investment emanated from his resources.
6. The payments were made progressively between FY
2015–16 and FY 2020–21. All instalments, along with deduction of TDS u/s 194IA, are duly reflected in his Form
26AS. In stark contrast, the assessee’s Form 26AS for AY
2017–18 reflects nil investment in the said flat, reinforcing that no part of the investment can be attributed to her.
7. However, the ld. AO based on information under NMS noted that assessee has not filed the return of income for A.Y.2017-18 and that assessee has entered into purchase of immovable property of Rs.1,76,16,200/-. Based on this information, the assessee’s case has been reopened u/s.148
and notice was issued. Before the ld. AO assessee has categorically stated that she is a house wife not involved in any business activity and was not residing in India and Poornima Sanjay Prabhu
4
therefore, she was not required to file any return of income in India. Assessee has also provided all the list of bank details which was held that her husband Mr. Sanjay Prabhu who was the first holder. However, the ld. AO held that since assessee could not furnish the required documentary evidences in respect of purchase of immovable property has treated the entire source of purchase of Rs.1,76,16,200/- unexplained investment u/s.69 and invoked Section 115BBE.
8. The ld. CIT(A) without considering the assessee’s submissions and the documents furnished that the investment in the property was done by her husband and that she was not a non-resident and did not have any source of income, still proceeded to confirm the addition. He has shifted the onus on the assessee stating that assessee has to provide a trial of funds to establish that the investment in India was entirely funded from foreign earnings or through a legitimate source and even if she was a second name holder in the property alongwith her husband that does not absolve her from tax liability. Despite noting all these facts that investment has come through her husband he has confirmed the addition.
9. Before us ld. Counsel submitted that first of all assessee had not made any investment and even her Form 26AS for A.Y.2017-18 establishes in this investment entire purchase consideration was paid by her husband Shri Sanjay Prabhu from his explained sources. The relevant submissions can be summarized in the following manner:-
Poornima Sanjay Prabhu
5
10.1 The addition of ₹1,76,16,200/– u/s 69 is wholly unjustified, since the Appellant had made no investment whatsoever in the Godrej property. Her Form 26AS for AY
2017–18 establishes nil investment. The entire purchase consideration was paid by her husband, Mr. Sanjay Prabhu, from his explained sources. The AO has not brought on record any evidence to indicate otherwise.
10.2 The reliance on the Sale Agreement being registered jointly is misplaced. Mere inclusion of name, without contribution of funds, does not confer ownership in fiscal law.
The decision of the Calcutta High Court in PCIT v. Smt. Nirmali
Bhadra [2023] 450 ITR 517 (Cal.) is directly applicable, holding that joint registration of property does not ipso facto justify addition u/s 69 in the hands of the co-owner unless investment is evidenced.
10.3 In fact, the husband’s records reflect the entire investment spread across years. The sum of ₹74,86,882/– was invested in AY 2017–18, as evidenced in his Form 26AS. The Appellant’s corresponding Form 26AS shows no such outlay. Thus, the AO has proceeded mechanically, ignoring the material already available in the assessment record.
10.4
The husband’s financial capacity stands amply demonstrated:
•
First, from the sale of his Bangalore flat for ₹88,50,000/– in August 2016, the proceeds of which were channelled through his
NRO account into the Godrej investment.
•
Second, from his professional salary income of AED
801,000 (₹1.41 crores) for FY 2016–17, earned in his capacity as CEO of Solas Marine LLC.
The supporting evidence comprises Form 26AS, salary certificates, bank statements, and affidavit, all of which confirm that the Appellant had no involvement in the transaction.
10.5 The learned CIT(A) erred in law and on facts in upholding the addition despite categorical evidence of nil investment in Poornima Sanjay Prabhu
6
the Appellant’s hands. The addition of ₹1,76,16,200/– is arbitrary, contrary to evidence, and unsustainable in law.
6 Without prejudice, it was further contended that the reassessment proceedings themselves are invalid ab initio. The notice u/s 148 dated 30/06/2021 was issued without juri iction, since there was no tangible material to suggest escapement of income in the Appellant’s hands. The entire foundation rests on the mere mention of her name in the Sale Agreement, without any corroborative material. 10. On the other hand ld. DR strongly relied upon the order of the ld. CIT(A) and ld. AO. 11. We have considered the submissions advanced on behalf of the assessee, perused the assessment order, the appellate order of the CIT(A), and examined the evidences brought on record, including Form 26AS, bank statements, affidavits, and supporting documents. The short issue is whether the addition of ₹1,76,16,200/– could be sustained in the hands of the assessee u/s 69 of the Act on account of purchase of a flat with Godrej Redevelopers. 12. The assessee is a Non-Resident Indian, a homemaker with no independent source of taxable income in India. During the relevant previous year she stayed in India for only 45 days. The Assessing Officer proceeded on the sole premise that her name appeared as a joint holder in the registered Sale Agreement dated 29/06/2016, and therefore treated the entire consideration of ₹1,76,16,200/– as her unexplained investment. Poornima Sanjay Prabhu
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13. The evidentiary record, however, tells an entirely different story. The entire investment has, in fact, been made solely by the assessee’s husband, Mr. Sanjay Prabhu. His Form 26AS discloses in detail the payments made year after year towards the flat, along with deduction of TDS u/s 194IA. The position is tabulated as under:
AY/FY
Date
Amount
AY 2016–17 (FY 2015–
16):
16/07/2015
₹9,63,987 (TDS ₹9,640)
16/07/2015
₹12,38,038 (TDS ₹12,380)
01/12/2015
₹13,21,215 (TDS ₹13,212)
Total
Total ₹35,23,240
AY 2017–18 (FY 2016–
17):
30/07/2016
₹17,61,620 (TDS ₹17,616)
09/10/2016
₹8,80,810 (TDS ₹8,808)
14/10/2016
₹8,80,810 (TDS ₹8,808)
15/01/2017
₹26,42,430 (TDS ₹26,424)
28/02/2017
₹13,21,212 (TDS ₹13,212)
Total:
₹74,86,882
AY 2018–19 (FY 2017–
18):
12/05/2017
₹13,21,215 (TDS ₹13,212)
Total
₹13,21,215
AY 2019–20 (FY 2018–
19):
02/04/2018
₹26,42,430 (TDS ₹26,424)
05/06/2018
₹8,80,810 (TDS ₹8,808)
14/01/2019
₹9,66,800 (TDS ₹9,668)
Total
₹44,90,040
AY 2020–21 (FY 2019–
20)
Nil
AY 2021–22 (FY 2020–
21):
Multiple instalments between 07/04/2020 to 26/05/2020
aggregating to ₹17,53,400
with proportionate TDS
Poornima Sanjay Prabhu
Total
₹17,53,400
Thus, the cumulative investment made by Mr. Sanjay Prabhu aggregates to ₹1,85,74,777, as evidenced from his Form 26AS across the respective years. 15. In contrast, the assessee’s Form 26AS for AY 2017–18 shows nil investment. This glaring fact, though fundamental to the issue, was ignored by both the Assessing Officer and the CIT(A). 16. The sources of these investments have also been convincingly explained. A substantial part was generated from the sale of Mr. Sanjay Prabhu’s Bangalore flat on 19/08/2016 for ₹88,50,000, duly credited into his NRO account. The balance was drawn from his professional earnings as CEO of Solas Marine LLC, Dubai, where he earned a salary of AED 801,000 in FY 2016–17 (equivalent to ₹1.41 crores). The flow of funds through his NRE/NRO accounts is corroborated by bank statements and his sworn affidavit, leaving no manner of doubt about the capacity and source of investment. 17. Once these facts are appreciated, the legal consequence is inevitable. Section 69 empowers the Revenue to tax unexplained investment, but only in the hands of the person who has actually made such investment. It does not authorize imputing an investment to someone who has not contributed any funds. The mere inclusion of the assessee’s name in the Sale Agreement, for convenience or family reasons, cannot by Poornima Sanjay Prabhu
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itself justify an addition when her records and financial position establish nil investment.
18. The Assessing Officer acted mechanically in fastening liability upon the assessee without appreciating the record already available. The learned CIT(A), in confirming the addition, failed to deal with the assessee’s categorical submissions and the decisive evidence from her Form 26AS and her husband’s records. This omission has vitiated the appellate order.
19. In these facts and circumstances, no addition could have been made in the hands of the assessee. The impugned addition of ₹1,76,16,200/– made u/s 69 is accordingly directed to be deleted.
20. In the result, the appeal of the assessee is allowed.
Order pronounced on 30th September, 2025. (RENU JAUHRI) (AMIT SHUKLA)
ACCOUNTANT MEMBER
JUDICIAL MEMBER
Mumbai; Dated 30/09/2025
KARUNA, sr.ps
Poornima Sanjay Prabhu
Copy of the Order forwarded to :
BY ORDER,
(Asstt.