DIMPLE JITENDRA JAIN,MUMBAI vs. WARD 27(1)(1), MUMBAI, NAVI MUMBAI

The brief facts of the case are that the assessee was a non-filer of the return of income. The Ld. AO issued a notice under Section 148 of the Act for reopening the assessment. In response to the said notice, the assessee filed her return of income under Section 148 of the Act declaring total income of Rs.1,79,200/-. During A.Y. 2018-19, the assessee, jointly with her husband, Mr. Jitendra Jain, purchased an immovable property for a total consideration of Rs.1,06,00,000/- during F.Y. 2017-18. As per the information available with the revenue, the assessee had not filed her return of income under Section 139(1) of the Act. Accordingly, the assessment was reopened. During the reassessment proceedings, the assessee complied with the notices issued by the Ld. AO. However, for want of sufficient documentary evidence regarding the source of investment in the property, the Ld. AO made an addition of Rs.22,60,000/- on account of unexplained source of investment. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the assessee had purchased the property jointly with her husband. However, in the absence of satisfactory evidence explaining the assessee’s share of investment, the Ld. CIT(A) confirmed the addition made by the Ld. AO. Being further aggrieved, the assessee is in appeal before us.

The Ld. AR argued that the source of investment towards the purchase consideration of Rs.1,06,00,000/- was duly explainable and, in support thereof, sought to place additional evidence on record. The Ld. AR submitted that a housing loan of Rs.60,00,000/- had been obtained from Standard Chartered Housing and a further sum of Rs.38,68,000/- had been received from Mr. Hitendra Jain towards the purchase of the property.

The Ld. AR further submitted that the assessee has filed additional evidence, inter alia, comprising the affidavit of the assessee, affidavit of her husband, affidavit of Mr. Hitendra Jain, and the bank statement of Mr. Hitendra Jain evidencing the payments made towards the purchase of the property. The Ld. AR contended that the assessee was merely a co-borrower and co-owner of 3 the property along with her husband and that the entire purchase consideration attributable to the transaction was paid by her husband. The relevant payments are stated to be duly reflected in the bank statement placed at APB page 13. Accordingly, the Ld. AR prayed for admission of the additional evidence and consideration of the assessee’s claim in light of the documents now placed on record.

The Ld. DR argued that during both the assessment proceedings as well as the appellate proceedings before the Ld. CIT(A), the assessee had failed to furnish sufficient documentary evidence to substantiate the source of investment in the property. Accordingly, the addition made by the Ld. AO was rightly confirmed by the Ld. CIT(A).

Appellate finding: I have carefully considered the penalty order, the statement of facts, the written submissions filed by the appellant, and the material available on record. On perusal of the assessment order it is seen that the appellant had filed her return of income in response to the notice issued u/s 148 for the year under consideration declaring total income at Rs. 1,79,200/-. As per the information, the appellant had purchased immovable property of Rs.1,06,00,000/- jointly with her husband in which her share was 53,00,000/- and the source of the investment made by the appellant remained unexplained. The case of the appellant was selected for scrutiny and statutory notices were issued to the appellant. The appellant filed her reply stating that she had paid Rs.55,60,000/- including stamp duty and other charges as her share for which she had taken 2 loans as co-applicant: one from Standard Chartered Bank amounting to Rs.66,00,000/- and the other of Rs.65,00,000/- from Reliance Home Finance Ltd. The documents furnished by the appellant were duly considered and the claim of the loan from Standard Chartered Bank was accepted. However, the loan amount of Rs.65,00,000/- was not found to be acceptable. Therefore, the amount of Rs.22,60,000/- (Rs.55,60,000 – Rs.33,00,000) after considering the 33,00,000/-( 50% of the 66,00,000/- as loan taken from Standard Chartered Bank) remained unexplained and was added back to the ROI of the appellant. 5.1 During the appellate proceedings, the appellant has stated that her loan from Reliance Home Finance Ltd is rejected as it is taken from Non- Banking Financial Co. However, on going through the assessment order it is found that the said loan was rejected to be the source of investment after observing that it was sanctioned in 2015 and the property under consideration was purchased during the F.Y. 2017-18. It has been noted that the loan of Rs.65,00,000/- was sanctioned by the Reliance Home Finance Limited on 28.12.2015 whereas the property under consideration has been bought on 25.10.2018. The appellant in its submissions and replies has repeatedly mentioned that its claim of loan was rejected just because it was from Non-Banking Financial Institution however, the Assessment Order reflects that the Assessing Officer rejected the claim of assesse because the appellant at the time of assessment claimed that this amount was taken as loan for some other property but owing to non-fulfilment of promise by the then builder, the amount got refunded back to appellant’s account. Subsequently, the refunded amount was paid for the property under consideration. The appellant furnished bank statements but could not provide any other supporting document i.e. confirmation from the previous builder, Copy of agreement with previous builder, Evidences/correspondences reflecting any dispute, cancellation deed, confirmation letter from the builder regarding refund, etc. Even on perusal of the bank statements furnished by the appellant, it has been observed that there has been no transaction reflecting the amount of Rs.22,60,000/- received as refund or paid for the purchase of property. There have been various transactions being reflected in the bank statement including an amount of approx. Rs.5 lakhs from AJ Buildcon but the appellant has not furnished any evidence or explanation if the amount pertains to the refund or related to the transactions under consideration. At last, the appellant has failed to substantiate its claim at the assessment as well as appellate stage. 5.2 The appellant has merely provided bank statements and that too without any explanation highlighting the inflow or outflow of the funds. The bank statements may reflect the inflow/outflow of the funds but do not establish the nature or source of receipts/payments. Mere entries in the bank account do not discharge the burden cast upon the appellant under the applicable provisions of the Act. The appellant has failed to identify the builder, prove the genuineness of the transaction and establish the nexus between the loan disbursement and subsequent refund. The appellant could nowhere prove that the loan amount actually disbursed was even refunded back or the same amount was used for subsequent payment for another property. 5.3 Considering the above, it is opined that the Assessing Officer has rightly added the amount of Rs.22,60,000/- as unexplained income of the appellant for the year under consideration. In view of the above facts and evidences placed on record, the addition made by the AO is sustained thus, the ground of appeal of the appellant is dismissed. 6. We have heard the rival submissions and perused the material available on record. The addition of Rs.22,60,000/- was sustained primarily on the ground that the assessee could not satisfactorily establish the source of investment attributable to her share in the jointly purchased property. The Ld. CIT(A) also recorded that the necessary supporting evidence establishing the nexus between the funds and the purchase consideration was not produced before the revenue authorities.

Before us, the assessee has furnished additional evidence, inter alia, comprising her affidavit, affidavit of her husband, affidavit of Mr. Hitendra Jain and the relevant bank statements. The specific contention of the Ld. AR is that though the assessee is a co-owner and co-borrower, the purchase consideration was actually paid by her husband and, therefore, no separate investment was made by the assessee from any unexplained source. The relevant payments are stated to be reflected in the bank statement placed in the paper book. The statement furnished by the assessee also contains particulars of the housing loan and payments stated to have been made through the relevant bank accounts.

Considering the nature of the additional evidence and the fact that the source and actual flow of funds require factual verification, we deem it appropriate to restore the matter to the file of the Ld. AO for limited verification of the source of payments made towards the purchase of the property. The Ld. AO shall examine the additional evidence, relevant bank statements, loan documents and the respective contributions, if any, of the assessee and her husband. In particular, the Ld. AO shall verify the assessee’s specific claim that the entire amount towards the purchase of the property was paid by her husband and that the assessee was only a co-owner/co-borrower.

The assessee is directed to furnish all necessary documentary evidence and cooperate with the proceedings. After carrying out the aforesaid verification, the Ld. AO shall adjudicate the issue afresh in accordance with law and pass a speaking order, after affording reasonable opportunity of being heard to the assessee. Accordingly, the relevant grounds of appeal are allowed for statistical purposes.

In the result, the appeal of the assessee bearing ITA No.4657/Mum/2026 is allowed for statistical purpose. Order pronounced in the open court on 21st day of August 2026 Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक �Dated: 21/08/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ� �The Appellant , 2. �ितवादी � The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध ,आय .अपी .अिध ., मुंबई �DR, ITAT, Mumbai 5. गाड�फाइल �Guard file.