SHANAZ RUSTOM IRANI,MUMBAI vs. ITO WARD 41(1)(4), MUMBAI, KAUTALYA BHAWAN,

Briefly stated, the facts borne out from the record are that the assessee is an individual. Information was received by the Department that during the Financial Year 2014-15 relevant to Assessment Year 2015-16 an immovable property had been purchased in the name of the assessee for a total consideration of ₹2,10,75,000/-. Since no return of income for the relevant assessment year was found to have been filed, reassessment proceedings were initiated and notice under section 148 was issued on 30.03.2022 followed by notices under section 142(1). As there was no compliance to the notices issued during the course of reassessment proceedings, the Assessing Officer completed the assessment ex parte under section 147 read with section 144 vide order dated 29.03.2023. In the said assessment order, the Assessing Officer observed that the assessee had purchased an immovable property vide purchase deed dated 23.09.2014 registered before the Sub Registrar, Kurla-I, Mumbai for a consideration of ₹2,10,75,000/- and since no explanation regarding the source of investment was available on record, the entire purchase consideration was treated as unexplained investment under section 69A of the Act and added to the income of the assessee.

We have carefully considered the rival submissions, perused the orders of the authorities below and examined the entire material available on record including the affidavit filed by the assessee explaining the delay in filing of appeal before the learned CIT(A). From the affidavit, it is seen that the assessee had suffered a serious spinal injury resulting in vertebral fracture and surgery in January 2022, followed by prolonged treatment and physical incapacity. It has further been stated that the assessee was not registered on the income tax portal during the relevant period and, therefore, remained unaware of the reassessment proceedings. It is also borne out from record that notices issued at the old Chennai address were reportedly returned unserved and thereafter the assessee’s husband had furnished the updated address and contact particulars to the Department. The affidavit further reveals that the assessee came to know about the assessment order only in August 2023 through her husband’s Chartered

At this stage, it is pertinent to note that the learned CIT(A) has dismissed the appeal solely on the ground of delay and has not adjudicated the grounds on merits. Ordinarily, after condoning the delay, the matter could be restored to the file of the learned CIT(A) for adjudication afresh. However, in the peculiar facts of the present case, we find that all relevant evidences forming the basis of the controversy were already placed before the learned CIT(A) along with the written submissions and are also available before us. Both the parties have addressed us on the merits of the addition and no further enquiry or investigation is required. Therefore, in

The sole addition made by the Assessing Officer is ₹2,10,75,000/- under section 69A of the Act on the premise that the assessee had failed to explain the source of investment in the immovable property purchased during the relevant year. However, from the documentary evidences placed on record, including the written submissions filed before the learned CIT(A), copies of bank statements, details of payments, Form 26AS and return of income of Shri Rustom Irani, husband of the assessee, it emerges that though the property stood jointly in the names of the assessee and her husband, the entire purchase consideration of ₹2,10,75,000/- was paid by Shri Rustom Irani from his own disclosed sources. The payment details demonstrate that the consideration was discharged through identifiable banking channels from his bank accounts and partly through housing loan obtained in his name. The record further reveals that tax was deducted at source under section 194IA by Shri Rustom Irani and the corresponding credit is reflected in his Form 26AS. It has also been shown that the property was duly disclosed in his return of income and statement of assets.

In our considered opinion, the addition made under section 69A cannot survive on the facts of the present case. The deeming provisions contained in section 69A can be invoked only where an investment or asset is found to belong to the assessee and the assessee either offers no explanation regarding the nature and source thereof or the explanation offered is found to be unsatisfactory. The very foundation of the provision is the existence of an unexplained investment attributable to the assessee. Merely because the assessee’s name appears as a joint holder in the title documents cannot ipso facto lead to an inference that the investment has been made by her. What is relevant is the actual source of funds and the person who has made the investment. Once credible and unimpeachable documentary evidence is brought on record demonstrating that the entire investment has emanated from the husband of the assessee through disclosed banking channels, supported by housing loan records, TDS compliance and disclosure in his return of income, the basis for invoking the deeming fiction in the hands of the assessee completely disappears. There is not even an iota of material on record to suggest that any part of the purchase consideration was contributed by the assessee from her own undisclosed sources.

In view of the aforesaid discussion, we set aside the order of the learned CIT(A) dismissing the appeal in limine, condone the delay in filing of appeal before him and, on merits, direct the Assessing Officer to delete the addition of ₹2,10,75,000/- made under section 69A of the Act. Since the addition itself does not survive, all consequential proceedings arising therefrom shall also not survive.