SAURABH RAMCHANDRA UTHALE,MUMBAI vs. INCOME TAX OFFICER-42(1)(5), KAUTILYA BHAVAN

आयकर अपीलीय अधिकरण, म ुंबई पीठें, म ुंबई INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI BENCH: B BEFORE SMT. BEENA PILLAI, HON’BLE JUDICIAL MEMBER AND MS. RATNA DASGUPTA, HON’BLE ACCOUNTANT MEMBER ITA 2725/MUM/2026 निर्धारण वर्ा/Assessment Year: 2016-17) SAURABH RAMCHANDRA INCOME TAX OFFICER- UTHALE 42(1)(5) 204 JAL DARSHAN SOCIETY, KAUTILYA BHAVAN, GORAI ROAD, GORAI BANDRA KURLA COMPLEX, BORIVALI, MUMBAI-400092 Vs. BANDRA(EAST), MUMBAI- MAHARASHTRA 400051 MUMBAI-400051 MAHARASHTRA अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of ABLPU8644G Assessee:

अपीलधर्थी द्वारा/Appellant represented Shri S.Sriram & Ms.Priyanshi by: Choksi, ARs प्रत्यर्थी द्वारा/Respondent represented by: Shree Kumar C. (SR DR) सुनवाई की तारीख / Date of conclusion of hearing: 25-Aug-2026 घोषणा की तारीख / Date of pronouncement: 07-09-2026 आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER: Present appeal by the assessee is directed against the order dated 30/01/2026 passed by the NFAC, Delhi, [hereinafter referred to as “Ld.CIT(A)”] for A.Y. 2016-17, on the following grounds of appeal:-

“1. That on the facts and in the circumstances of the case in law, the learned Ld. CIT(A) erred in upholding the action of the Assessing Officer

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE (“AO”), in erroneously concluding that the Appellant Assessee had made unexplained investments amounting to INR 55,20,000/-, in purchasing a residential house. The residential house wherein the assessee stays even today with his family, was jointly purchased by the Assessee with his father and spouse, investment for which was made by all three of them jointly. 2. That on the facts and in the circumstances of the case in law, the learned Ld. CIT(A) erred in upholding the action of the Ld. AO in invoking section 69 of the IT Act, despite the fact that the investment was duly made through identifiable banking channels and the co-owners are fully traceable. Accordingly, the investment cannot be characterised as an ‘unrecorded investment’ within the meaning of section 69. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO, in treating the Appellant Assessee as the sole owner/beneficiary of the investment in the house property, when the house was purchased jointly by all the three purchasers. The CIT(A) accordingly erred in confirming the action of the Ld. AO in shifting the burden of providing the entire purchase price on the income sources of the Appellant Assessee, and in treating the entire difference in value as the income of the Appellant Assessee. 4. The Ld. AO erred in invoking jurisdiction u/s 147 of the Act, when the income that could have possibly escaped assessment in the hands of the Appellant Assessee could not have exceeded Rs.50 Lacs. The Ld. CIT(A) erred in not setting aside the order impugned before him/her, on this ground. 5. The Appellant craves leave to add, amend, alter, delete, rescind, forgo, or withdraw any of the above grounds of appeal either before or during the hearing before the Hon’ble Tribunal. Further, the aforesaid grounds are mutually exclusive and without prejudice to each other.” 2. Brief facts of the case are as under:-

Assessee is an individual. He did not file his return of income for the year under consideration. Based on information received through Risk Management Strategy (“RMS”) that the assessee had purchased an immovable property for a consideration of Rs.80,00,000/- during F.Y. 2015-16, the case was reopened and notice u/s. 148 dated 13/03/2023 was issued.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE 2.1. During the reassessment proceedings, the assessee submitted that the property was jointly acquired along with his father, Shri Ramchandra Dnyanu Uthale, and his spouse, Smt. Mrinal Saurabh Uthale. The assessee explained the sources towards the acquisition as comprising housing loan from ICICI Bank of Rs.32,00,000/-, contribution by his father of Rs.11,20,000/-, contribution by his wife of Rs.20,00,000/-, his own funds of Rs.1,70,000/- and further funds of Rs.19,10,000/- stated to be from his father/joint family sources. The Ld. AO accepted the housing loan of Rs.32,00,000/-, but held that the assessee had not furnished adequate documentary evidence establishing the contributions from his father and wife.

2.2. The Ld.AO further observed that, on verification of the receipts/payment details, aggregate payments of Rs.87,20,000/- had been made to M/s.Om Shree Constructions. After reducing the accepted housing loan of Rs.32,00,000/-, the balance amount of Rs.55,20,000/- was treated as unexplained investment u/s.69 r.w.s.115BBE of the Act.

Aggrieved by the order passed by Ld.AO, assessee preferred appeal before Ld.CIT(A).

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE creditworthiness and source of funds. Thus, the addition of Rs.55,20,000/- was made in the hands of the assessee.

Aggrieved by the order passed by Ld.CIT(A), assessee is in appeal before this Tribunal.

4.1. The assessee has also filed an application under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 seeking admission of additional evidence. The additional evidence consists, inter alia, of employment/remuneration records and bank statements of the assessee's wife, complete bank statements of the assessee, joint bank account statements of the assessee and his father, bank statements of the assessee's father evidencing pension/income and documents relating to funds claimed to have originated from the deceased mother of the assessee.

4.2. The Ld.AR submitted that these documents are not intended to set up a new case but merely substantiate the explanation regarding the source and movement of funds which was already taken before the authorities below. It was submitted that complete old bank records and other documents relating to the family

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE members could not be compiled during the assessment and first appellate proceedings and have since been traced.

4.3. The assessee has also raised legal ground before us challenging the validity of reopening u/s. 147 of the Act. It has been contended that, having regard to the limitation prescribed under the reassessment provisions, the income which could possibly have escaped assessment in the hands of the assessee did not exceed Rs.50,00,000/-. Since, for the reasons recorded hereinafter, we consider it appropriate to restore the substantive issue to the file of the Ld.AO for examination of the additional evidence, this legal ground shall also remain open for consideration in accordance with law.

4.4. The Ld.DR relied upon the orders passed by the authorities below and submitted that despite sufficient opportunities, the assessee failed to substantiate the sources of investment by producing the necessary evidence regarding the contributions claimed to have been made by the other co-owners. The Ld.DR accordingly supported the addition made by the Ld.AO and sustained by the Ld.CIT(A).

We have perused the submissions advanced by both sides in light of the record placed before us.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE foundation of the addition is the failure of the assessee to sufficiently establish the sources of the balance contributions attributed to the family members.

5.1. In this background, the additional evidence filed before us assumes considerable significance. The assessee has produced, inter alia, the employment and remuneration records of his spouse along with her bank statements; his own complete bank statements; joint bank account statements; and bank statements of his father reflecting pension/income and other funds stated to have been utilised towards acquisition of the property. The additional evidence paper book specifically contains the spouse's employment records and bank statements, the assessee's bank statements evidencing payment of Rs.1,70,000/- to the builder, and the relevant banking records pertaining to the father/joint accounts.

5.2. We find that these documents have a direct bearing upon the issue under consideration. The addition was sustained substantially for want of documentary evidence establishing the source of the contributions claimed to have been made by the assessee's father and spouse. The additional evidence now produced seeks to fill precisely this evidentiary gap. The assessee has explained that the transactions are old and that complete records relating to family members, including old bank statements, employment/remuneration records and death-claim/pension related documents, could not be compiled during the proceedings before the lower authorities.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE 5.3. In our considered view, the additional evidence goes to the root of the controversy and is necessary for proper adjudication of the issue. We therefore admit the additional evidence filed by the assessee under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. On examination of the said documents, we find that they clearly evidence and corroborate the transfer of funds towards the purchase of the immovable property by the three co-owners and explain the respective contributions made by them towards such acquisition. The additional evidence, therefore, is not in the nature of material requiring any fresh investigation or enquiry, but merely brings on record documentary material which enables us to appreciate the factual position arising from the transaction in its proper perspective. The said evidence, when considered along with the material already available on record, sufficiently establishes the nexus between the respective fund transfers and the purchase of the immovable property. In these circumstances, and having regard to the nature and relevance of the additional evidence, we do not consider it necessary to remit the matter to the file of the Ld. AO for fresh examination. We accordingly proceed to adjudicate the issue on the basis of the additional evidence admitted under Rule 29 read with the material already available on record.

Date of Date of Remarks / Sr Source / payment debit from Amount reference to . Bank Explanatio as per AO bank (Rs.) Chart No n order account submitted ICICI ICICI Bank Sr No 1. 07.01.2015 07.01.2015 Bank 32,00,000 housing 8Explained in Loan loan Para 17 below Union Wife’s Sr No 5 and Bank of 2. 25.05.2015 25.05.2015 4,80,000 salary / 6.Explained in India – mutual fund Para 20 below Wife

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE Date of Date of Remarks / Sr Source / payment debit from Amount reference to . Bank Explanatio as per AO bank (Rs.) Chart No n order account submitted maturity proceeds Sr No 7The actual date of payment was 30.03.2016. Wife’s Union This has been salary / Bank of erroneously 3. 03.03.2016 23.03.2016 3,20,000 mutual fund India – noted as maturity Wife 03.03.2016 in proceeds the order.Explaine d in Para 20 below ICICI Wife’s Sr No 4. 30.03.2016 23.03.2016 Bank – 4,00,000 mutual fund 8Explained in Wife redemptions Para 20 below There was no transactio n for this value on the said 5. 07.01.201 date. As - - 3,20,000 5 can be seen in Sr No 1, loan of Rs 32 Lacs was taken on that date State Funds Sr No. Bank of received on 6. 15.10.2016 17.10.2016 8,00,000 9Explained in India – PPF Para 20 below Wife maturity Payment Maratha Sr No. from Sahakar 2Explained in 7. 20.12.2014 20.12.2014 11,20,000 father’s i Bank – Para 24-25 bank Father below account Kotak Sr No. Appellant’s Mahindr 3Explained in 8. 20.12.2014 20.12.2014 1,70,000 own a Bank – Para 18-19 accumulate Father below

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE Date of Date of Remarks / Sr Source / payment debit from Amount reference to . Bank Explanatio as per AO bank (Rs.) Chart No n order account submitted d salary funds Paid from SBI joint account of Appellant Sr No. State and father, 4Explained in 9. 20.12.2014 20.12.2014 Bank of 7,10,000 out of funds Para 22-23 India received below from Late Smt. Kumudini Uthale Sr No. 1Explained in Para 22-23 Paid from below. The SBI joint actual date account of of payment State Appellant 10 20.12.201 06.02.201 12,00,00 was Bank of and father; . 4 4 0 06.02.2014. India from This has maturity of been fixed erroneously deposit noted as 20.12.2014 in the order. Total as 87,20,00 per AO 0 order Actual amount 84,00,00 paid by 0 the Appellant

5.4. The Ld.AR submitted that the aforesaid payment summary clearly demonstrates that the investment in the residential property was not made by the assessee alone. He submitted that the property was jointly acquired by the assessee along with his

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE father and wife, and the payments were also made from different bank accounts belonging to/maintained by the respective family members. It is submitted that the source of funds, is thus explained person-wise by the Ld.AR as under:

A. ICICI Bank housing loan of Rs.32,00,000:

It is submitted that substantial source of funding was from the ICICI Bank housing loan of Rs.32,00,000. The Ld.AR submitted that the Ld.AO/CIT(A) accepted the said housing loan while computing the addition. Therefore, to the extent of Rs.32,00,000, the source of investment admittedly stands accepted even by the Revenue.

B. Assessee’s own contribution of Rs. 1,70,000:

The assessee paid Rs.1,70,000 from his Kotak Mahindra Bank account. The said payment is reflected in the Appellant’s Kotak Mahindra Bank statement is placed at page 79 of the Factual Paperbook. It is submitted that the assessee was a salaried employee with eClerx Services Ltd. during the relevant period. In support Form 16 and Form 26AS of the assessee are also placed at pages 94 to 101 of the Factual Paperbook. It is submitted that the payment of Rs.1,70,000 was made out of accumulated salary funds lying in assessee’s bank account.

The assessee has filed Kotak Mahindra Bank statement for the relevant period as part of the Additional Evidence Paperbook at pages 18 to 23. The Ld.AR drew our attention to the bank statement, at pages 18 to 21 which, reflects that the account was the linked assessee’s salary account reflecting the monthly salary

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE paid to the assessee by the employer. The Ld.AR submitted that prior to the payment of Rs.1,70,000 to M/s Om Shree Constructions on 20.12.2014 vide cheque No. 19, the account reflected regular salary credit, sweep / term-deposit related credits.

C. Contribution by assessee’s wife, Mrinal Saurabh Uthale

It is submitted that the assessee’s wife, Mrinal Saurabh Uthale, was employed with SNDT’s Women’s University’s Department of Educational Technology as an Instructional Designer from 1/07/2013 to 30/07/2016. A letter of confirmation of engagement issued by SNDT Women’s University. The Ld.AR submitted that the source are as follows-

(i) Rs 8,00,000/- paid on 17/10/2016 out of Rs. 13,05,350 received on maturity of her PPF account on 10.10.2016 (SBI Bank account – page 4 of the Additional Evidence Paperbook) (ii) Rs.4,00,000/- paid on 23.03.2016 is out of redemption of Mutual Funds (ICICI Bank account at page 84 of P.B.) (iii) Rs.43,238/- Paid on 18/03/2016 (The mutual fund statement at page 29 of Additional evidence P.B.) and Rs.41,500/- (the mutual fund statement is enclosed at page 24 of Additional evidence P.B.) (iv) On 16.03.2016 - Rs 177,592, Rs 85,452/- (enclosed at page 22 of Additional evidence P.B.), Rs 61,934, Rs.48,821/- and Rs.19,489/-and Rs.3,20,000/- paid on 23.03.2016 (erroneously recorded as 03.03.2016 in the assessment order) is out of redemption of Birla Mutual Fund on 16.03.2016 for Rs 123,024, and remuneration

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE credits over the last year (Union Bank of India account – page 87-89 of the Factual Paperbook) (v) Rs.4,80,000/- paid on 25.05.2015 is out of opening balance in her account of Rs 3,27,000, and honorarium credits on 15.04.2015 and 11.05.2015 (Union Bank of India account - page 87-89 of the Factual Paperbook).

5.5. The Ld.AR thus, submitted that the source of contribution by assessee’s wife stands explained through salary credits, mutual fund redemption / maturity proceeds and other regular banking transfers. The payments were made through banking channels and there is no material brought on record by the Revenue to show that the funds belonged to the assessee.

D. Payments from joint account of assessee and his father

It is submitted that payment of Rs.12,00,000/- and Rs.7,10,000/- were made from the joint account of the assessee and his father held with SBI. He relied on the SBI joint account statement placed at pages 80 to 81 of the Factual Paperbook, and page 32 of the Additional Evidence Paperbook.

(i) Rs.12,00,000/- was paid on 06.02.2014, out of maturity proceeds of fixed deposit of Rs.14,41,682 on 28.09.2013. It is submitted that other credits between these dates are from the mother’s and father’s account. (ii) Rs.7,10,000/- was paid on 20.12.2014. The Ld.AR submitted that Rs.3,49,000 wastransferred from the assessee’s mother’s account, Rs.2,51,000 transferred from assessee’s father’s account, and Rs.1,72,000 transferred from assessee’s wife’s account.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE 5.6. Thus, both payments from the SBI joint account were supported by sufficient available balance and identifiable credits in the said account, as reflected on page 32 of the Additional Evidence Paperbook. Accordingly, the payments from the joint account were also made from identifiable sources through banking channels. The Ld.AO has not brought any material to show that the funds in the joint account represented unexplained money of the Appellant.

Contribution by assessee’s father, Shri Ramchandra Dnyanu Uthale

5.6.1. The Ld.AR submitted that assessee’s father, Ramchandra Dnyanu Uthale, was working as a government servant and took voluntary retirement in the year 2006 after serving the government for 29 years as Deputy Education Inspector. In lieu of his services, he regularly received pension from the Government. The said payment is made out of his accumulated savings, pensions, and sums transferred from the maturity of fixed deposits as reflecting in the bank statements at pages 82 to 83 of the Factual Paperbook and at pages 38-41, and 42-26 of the Additional Evidence Paperbook.

5.6.2. The Ld.AR submitted that Ramchandra Dnyanu Uthale is also a joint owner of the immovable property. Therefore, the amount paid by him from his own bank account could not have been treated as unexplained investment of the assessee. The Ld.AR thus submitted that the payments made by the assessee along with the co-owners are summarised as under:

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE Cheque Cheque Cheque Date Bank Name Bearer Amount Comments Number Date name Maharashtra Om Shree 20-12-2014 Sahakari 41017 19-12-2014 11,20,000 Construction Bank Kotak Om Shree 20-12-2014 Mahindra 19 19-12-2014 1,70,000 Construction Bank 20-12-2014 State Bank of Om Shree 81236 19-12-2014 7,10,000 India Construction 20-12-2014 State Bank of Om Shree 81234 02-04-2014 12,00,000 India Construction Home Loan - Om Shree 07-01-2015 ICICI Bank Construction 281682 05-01-2015 32,00,000 Account # 37622989038 25-05-2015 Union Bank of Om Shree 53694 - 4,00,000 VAT Service Tax India Construction 25-05-2015 Union Bank of Om Shree 53694 - 80,000 India Construction 30-03-2016 Union Bank of Om Shree 53696 22-03-2016 3,20,000 India Construction Om Shree 30-03-2016 ICICI Bank 59038 22-03-2016 4,00,000 Construction 15-10-2016 State Bank of Om Shree Construction 256787 - 8,00,000 India Total 84,00,000

5.7. On perusal of the paper book filed before this Tribunal, it is noted that the above payments made through banking channels are verifiable from the bank statements placed by the assessee of himself as well as co-owners at pages 81 – 89 and 27 -46 of the paper book filed as additional evidence. Further, the receipts evidencing the payments received by the developer placed at pages 75 – 77 further fortifies the payments made by the assessee along with the co-owners. It is also an admitted fact that, the share certificate has been issued by the society in the names of all the three owners which is evident from page 102 of the paper book.

5.8. We further find that the assessment order itself records that the agreed consideration for the property was ₹80,00,000/-.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE However, while making the addition, the Ld.AO has adopted an amount of ₹87,20,000/- as the amount paid towards the property. The basis for adopting the higher figure is not borne out from the documentary evidence placed on record. The assessee has specifically disputed the computation of ₹87,20,000/- and has contended that the actual amount paid towards the property, including VAT, was ₹84,00,000/-. More importantly, the TDS certificate placed at pages 94 to 95 of the paper book evidences payment of ₹80,00,000/- to the builder.

5.9. On a cumulative consideration of the aforesaid material, we find that the payments towards acquisition of the property are identifiable and are supported by documentary evidence. The agreement, receipts issued by the developer, details of payments, bank statements of the co-owners, TDS certificate and the share certificate issued in the names of all three co-owners, when read together, provide a contemporaneous documentary trail of the transaction. The material on record, therefore, does not support the inference that the entire amount of Rs.80,00,000/- represented unexplained investment of the assessee alone. On the contrary, the evidence demonstrates that the property was acquired jointly by three co-owners and that the payments towards acquisition were made by them through banking channels, the source of which stands sufficiently established by the assessee.

5.10. It is noted that the addition made by the authorities below in the hands of the assessee is without bringing on record any cogent material to establish that the assessee made unexplained investment of Rs.55,20,000/- in the property. The mere adoption of a figure of Rs.55,20,000/-, without reconciling the same with the

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE agreed consideration, the actual payments evidenced by the documents and the contributions made by the three co-owners, cannot constitute the basis for invoking section 69 of the Act. For the purposes of section 69, the essential requirement is that the investment should be found to have been made by the assessee and that the assessee is unable to satisfactorily explain the nature and source thereof. In the present case, the documentary evidence on record explains the investment and also establishes that the property and the corresponding payments pertain to the three co- owners.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 07-09-2026.

Sd/- Sd/- RATNA DASGUPTA BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 07-09-2026 Shamik Chakravorty Sr.P.S.

ITA 2725/MUM/2026 SAURABH RAMCHANDRA UTHALE Copy to: SAURABH RAMCHANDRA UTHALE, 204 JAL DARSHAN SOCIETY, GORAI ROAD, GORAI BORIVALI, MUMBAI 1 400092, MUMBAI-400092, MAHARASHTRA INCOME TAX OFFICER-42(1)(5), KAUTILYA BHAVAN, BANDRA KURLA 2 COMPLEX, BANDRA(EAST), MUMBAI- 400051, MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI