INCOME TAX OFFICER, MUMBAI vs. DIMPLE SANGHVI, MUMBAI

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ITA 8132/MUM/2025Status: DisposedITAT Mumbai30 April 2026AY 2016-1710 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the Ld. CIT(A) on both grounds. Regarding the first ground concerning the addition for immovable property purchase, the Tribunal noted that the assessee's share in the property was 25%, amounting to Rs. 54,51,750. The assessee provided a loan sanction letter for Rs. 37,50,000 from HDFC Bank, which was considered explained. However, for the unsecured loans of Rs. 17,01,750 from six persons, only ledger accounts were submitted, without ITRs or bank statements. The Ld. CIT(A) correctly upheld the addition of Rs. 17,01,750, as the identity, creditworthiness, and genuineness of these unsecured loans could not be established. The Tribunal dismissed the Revenue's ground as no new facts were presented to controvert the Ld. CIT(A)'s findings. For the second ground concerning the sale of immovable properties, the Tribunal found that the assessee's share in the total sale consideration of Rs. 75,50,000 was 25%, amounting to Rs. 18,87,500. The assessee had offered her share of short-term capital gain of Rs. 6,38,250 for taxation. The Ld. CIT(A) had accepted this contention based on the AO's submission in the remand report and the assessee's computation of income. The Tribunal dismissed this ground as well, stating that no new facts were brought on record by the Revenue to rebut the Ld. CIT(A)'s findings.

What were the facts?

The Revenue is in appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2016-17. The appeal challenges the NFAC's decision to restrict additions made by the Assessing Officer (AO) concerning the purchase of immovable property and the sale of immovable properties. The assessee, Dimple Sanghvi, was ex parte before the AO. The AO made an addition of Rs. 2,02,20,020 for property purchase and Rs. 75,50,000 for sale of properties. The NFAC, after considering additional evidence and remand reports, restricted the addition for property purchase to Rs. 17,01,750 and for sale of properties to Rs. 6,38,250. The Revenue argues that the NFAC erred in restricting these additions without appreciating the assessee's failure to discharge the onus of proving the nature and source of investments and the genuineness of unsecured loans, and in disregarding the AO's findings based on third-party confirmations.

What were the issues?

1. Whether, on the facts and in law, the Ld. CIT(A) erred in restricting the addition to Rs. 17,01,750 out of Rs. 2,02,20,020 made by the AO under Section 69 of the Income Tax Act, 1961, given the assessee's failure to prove the nature and source of investment and the genuineness of unsecured loans. - Assessee's Contention: Not recorded as the assessee was ex parte before the AO and did not appear before the Tribunal. - Revenue's Contention: The assessee failed to discharge the onus of proving the nature and source of investment in immovable property and did not furnish corroborative evidence such as bank statements or income tax returns of loan creditors to establish the genuineness of unsecured loans claimed. 2. Whether, on the facts and in law, the Ld. CIT(A) erred in granting relief of Rs. 69,11,750 out of the total addition of Rs. 75,50,000 made by the AO on account of sale of immovable properties, without verifying joint ownership or obtaining confirmations from co-owners. - Assessee's Contention: The assessee's share in the sale of two properties was 25% (Rs. 18,87,500), which was already disclosed in her return of income, and the tax liability arising thereon was discharged. The assessee offered her share of capital gain of Rs. 6,38,250 for taxation. - Revenue's Contention: The Ld. CIT(A) erred in granting relief without verifying joint ownership structure or obtaining confirmations from co-owners, despite the assessee's failure to produce supporting documents during assessment. The AO treated the entire sale consideration as short-term capital gains due to the absence of details from the assessee.

Which sections of the Income-tax Act were involved?

Section 69,Section 133(6),Section 144,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SHRI BIJAYANANDA PRUSETH

For Respondent: Shri Annavaram Kosuri (SR.DR.)
Hearing: 28.04.2026Pronounced: 30.04.2026

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the Revenue challenging the impugned order dated 25.09.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2016-17. The following grounds are reproduced below:

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“ 1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition to Rs.17,01,750/- out of the total addition of Rs. 2,02,20,020/- made by the AO u/s 69 of the Income Tax Act, 1961, without appreciating that the assessee failed to discharge the onus of proving the nature and source of investment in immovable property, and did not furnish corroborative evidence such as bank statements OR income tax returns of loan creditors to establish the genuineness of unsecured loans claimed. 2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting relief of Rs. 69,11,750/- out of the total addition of Rs. 75,50,000/- made by the AO on account of sale of immovable properties, without verifying the joint ownership structure OR obtaining confirmations from co-owners, despite the assessees failure to produce supporting documents during the assessment proceedings 3) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in accepting post-facto explanations and unverified claims of joint ownership and capital gains computation without examining the audit trail, bank transactions, OR matching sale proceeds with declared income, and failed to appreciate that the assessee did not maintain proper records OR respond to statutory notices during assessment. 4) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in disregarding the findings of the AO based on third-party confirmations from the Sub-Registrars office, which clearly established the assessees involvement in high-value property transactions, and failed to appreciate that the additions were made due to complete non-compliance and absence of documentary evidence during assessment. 5) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the additions without appreciating the facts mentioned in the assessment order justifying the additions made due to unexplained investments and capital gains from unverifiable transactions

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6) The appellant craves, leave to amend OR alter any grounds OR add a new ground which may be necessary ”

2.

None appeared on behalf of the assessee when the case was called out repeatedly. From the case records, we noticed that as per the endorsement of the Department, summons in this case were sent by the Registry through speed post as well as email. More than one month has passed since the summons were issued at the address provided by the assessee in Form 36, therefore, drawing an inference under the General Clauses Act, it is presumed that service of summons/notice has been duly effected.

2.1 On the other hand, the Ld. DR present in the court is ready with the arguments; therefore, we have decided to proceed with the hearing of the appeal ex parte.

3.

Ground No. 1 raised by the Revenue relates to challenging the order of the Ld. CIT(A) in restricting the additions to Rs. 17,01,750 out of the total addition of Rs. 2,02,20,020 made by the AO under Section 69 of the Act. In this regard, we have heard the ld. DR and perused the material placed on record. From the records, we noticed that the assessee was ex parte before the AO, and it was observed by the Assessing Officer that the assessee had made a purchase of immovable property amounting to Rs. 2,02,20,020. Details were sought from the assessee; however, since the assessee did not appear, the AO passed an assessment

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order under Section 144 of the Act and made an addition of Rs. 2,02,20,020.

4.

Thereafter, the assessee filed an appeal and challenged the said addition, also submitting additional evidence, which was accepted by the Ld. CIT(A) as the AO did not object to the admissibility of such additional evidence while submitting the remand report. Consequently, the Ld. CIT(A) passed an order restricting the addition to Rs. 17,01,750. The operative portion of the order of the Ld. CIT(A) is contained in para 5.3.2 to 5.3.3 and the same is reproduced herein below:

5.3.2 I have perused the assessment order, submission of the appellant, remand report and judicial precedents on this issue. It is observed that the investment made for the purchase of property was not fully held by the appellant. In the remand report the AO has clearly stated that the appellant has jointly purchased residential house property at 94-95, Sir Seth Hukumchand Marg (Old no. 03-04, Itwaria bazar) Indore, in which assessee's share is 25%. The said property was purchased by all joint owner for Rs. 2,18,07,000/-(details are as under), the assessee's share of investment i.e. 25% is Rs. 54,51,750/-.

As per the submission of the appellant the source of investment by her in the said property is as under:

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5.3.3 under:-In the remand report at para. 7 the AO's submission is as

"7. On-going through the assessee's submission, purchase deed as per record, it is found that the assessee, Mrs. Dimple Sanghvi Sanghvi is one of Four Purchasers, in which assessee's share is 25%, i.e. Rs. 54,51,750/-. In support of source of purchase of property, assessee submitted Loan sanction letter & details of HDFC Bank of Rs. 1,50,00,000/-, in which assessee's share is 25% i.e. 37,50,000/- and ledger accounts of unsecured loan of Rs, 17,01,750/- taken from 6 person. In support of unsecured loan of Rs. 17,01,750/-, assessee has only submitted ledger accounts, however, no ITR and Bank Statements of 6 person, who have given unsecured loan to assessee, have been submitted. In absence of ITRs and Bank Statements of 6 person, who have given unsecured loan to assessee, identity, creditworthiness and genuineness of unsecured loan can not be established as genuine. Hence the contention of assessee in regard of unsecured loan of Rs. 17,01,750/- is found not to be tenable."

On perusal of the appellant submission with regard to the uncured loan taken from the 6 person, it is observed that the appellant just mentioned the name of 6 persons and submitted the ledger accounts only. Further it is found that the appellant has taken the secured loan of Rs. 37,50,000/- being 25% of total loan of Rs. 1,50,00,000/- from the HDFC bank. In view of the above discussion the addition of Rs. 17,01,750/- being

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unexplained investment is upheld and remaining addition made in this regard is deleted. 5. After evaluating the order passed by the Ld. CIT(A), we find that while restricting the addition, the CIT(A) thoroughly considered the remand report filed by the AO. On perusal of the same, it was found that the assessee was one of four co- purchasers and her share was 25%, which comes to Rs. 54,51,750. In support of the purchase of property, the assessee submitted a loan sanction letter and details of an HDFC Bank loan of Rs. 1.50 crores, in which the assessee’s share was 25%, i.e., Rs. 37,50,000, along with ledger accounts of unsecured loans of Rs. 17,01,750 taken from six persons. However, no ITRs or bank statements of those six persons who had given unsecured loans to the assessee were submitted. Therefore, in the absence of ITRs and bank statements of those persons, the identity, creditworthiness, and genuineness of the unsecured loans could not be established. Thus, the Ld. CIT(A), after considering the loan amount taken by the assessee for the property, restricted the addition to Rs. 17,01,750, as the amount of Rs. 37,50,000 was fully explained by the assessee through documentary evidence of the loan taken from HDFC Bank in the form of a sanction letter.

6.

Even otherwise, no new facts or circumstances have been placed on record by the ld. DR to rebut or controvert the findings recorded by the Ld. CIT(A). Therefore, we uphold the order of the Ld. CIT(A) in restricting the addition and dismiss this ground raised by the Revenue.

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7.

Ground Nos. 2 to 6 raised by the Revenue relates to challenging the order of the Ld. CIT(A) in granting relief of Rs. 69,11,750 out of the total addition of Rs. 75,50,000 made by the AO on account of sale of immovable property. In this regard, we have heard the ld. DR and perused the material placed on record. We noticed that the Ld. CIT(A) had dealt with these grounds in paras 5.4 to 5.4.2 and the same is reproduced herein below:

5.4 Ground no. 5. That, learned ITO has completely failed in understanding the facts of cases and has made addition of Rs. 75,50,000 on account of sale of two immovable properties. The said two properties are joint properties and assessees share being 25 percent (Rs. 18,87,500) is already disclosed in the return of Income filed by her and has discharged the tax liability arising on the same.

5.4.1 For the adjudication on the ground no. 5 the relevant extract of the assessment order is reproduced as under:

"6. It is further seen from the AIR details that the assessee has made sale of two immovable properties on 01/05/2015 for a consideration of Rs. 40,00,000/- and Rs. 35,50,000/- respectively. Thus total sale consideration received in respect of aforementioned properties is Rs. 75,50,000/-. Notice u/s 133(6) dated 03/12/2018 was issued to Sub-registrar Indore for confirmation of property sale. Reply from the office of Sub-registrar was received which is placed on record. From the details obtained from sub-registrar's office, it is confirmed that the assessee has made sale of the aforementioned properties. In absence of any details from the assessee, entire sale consideration is treated as short term capital gains on account of sale of the properties. [Addition: Rs. 75,50,000/-."

I have perused the assessment order, submission of the appellant, remand report and judicial precedents on this issue. It is observed

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that the share in the sale of aforesaid property was not fully held by the appellant. In the remand report the AO has clearly stated at para. 8 as under:

"On the other hand assessee contention regarding share in sale value of two properties, it is stated that assessee along with 3 person, has sold two properties of Rs. 35,50,000/- and Rs. 40,00,000/- totalling to Rs. 75,50,000/-, in which assessee's share is 25% i.e. Rs. 18,87,500/-(8,87,500+10,00,000). On perusal of Computation of Income, ITR, Computation of Capital Gain and sale & purchase deed of these two properties, it is seen that assessee has offered her share of capital gain of Rs. 6,38,250/- for taxation. Hence the contention of assessee in regard of capital gain of Rs. 6,38,250/- is found to be tenable."

The appellant in her submission also accepted the STCG at Rs. 6,38,250/-. In view of the aforesaid submission of the AO and the appellant the capital gain at Rs. 6,38,250/- is upheld and the remaining addition in this regard is deleted.

8.

On going through the records, we noticed that as per AIR details before the AO, the assessee had sold two immovable properties for a consideration of Rs. 40,00,000 and Rs. 35,50,000 respectively, totaling Rs. 75,50,000. A notice under Section 133(6) of the Act was issued to the Sub-Registrar, Indore, and it was confirmed that the assessee had received the aforesaid sale consideration. In the absence of any details or explanation from the assessee, the entire sale consideration was treated as short- term capital gain.

9.

However, during appellate proceedings, it was noticed that the assessee had sold these properties along with three other

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persons, and her share in both properties was 25%, amounting to Rs. 18,87,500. On perusal of the computation of income, ITR, computation of capital gains, and sale and purchase deeds of the two properties, it was seen that the assessee had offered her share of short-term capital gain of Rs. 6,38,250 for taxation. Thus, the contention of the assessee was found to be tenable, and the Ld. CIT(A) accordingly restricted the addition.

10.

Even otherwise, no new facts or circumstances have been brought on record by the ld. DR to rebut or controvert the findings recorded by the Ld. CIT(A). Therefore, we uphold the order of the Ld. CIT(A) in restricting the addition and dismiss these grounds raised by the Revenue.

Order pronounced in the open court on 30.04.2026

Sd/- Sd/- (BIJAYANANDA PRUSETH) (SANDEEP GOSAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 30/04/2026 RY, Sr. PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी / The Appellant 1. प्रत्यर्थी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण,मुम्बई/ DR, ITAT, Mumbai 5.

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6.

गार्ड फाईल / Guard file. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//

उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

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