JAVADSHA HASMUKRAY VARAIYA,MUMBAI vs. ITO-41(2)(2), MUMBAI

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been preferred by the assessee against the order dated 24.04.2026 passed by the National Faceless Appeal Centre, Delhi, for Assessment Year 2010–11, arising from the assessment order dated 14.12.2017 passed

2 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya under section 144 read with section 147 of the Income-tax Act, 1961. The principal grievance raised by the assessee relates to the confirmation of addition of ₹47,81,250 made by the Assessing Officer under section 69 of the Act as unexplained investment in an immovable property purchased from M/s Runwal Developers Pvt. Ltd. 2. The relevant facts, in brief, are that the assessee had not filed his return of income for the year under consideration. On the basis of information available under the Non-Filer Monitoring System/AIR, the Assessing Officer noticed that the assessee had entered into an agreement dated 24.12.2009 with M/s Runwal Developers Pvt. Ltd. for purchase of an immovable property having an aggregate consideration of ₹47,81,250. Since there was no effective compliance with the notices issued during the reassessment proceedings, the Assessing Officer completed the assessment ex parte under section 144 read with section 147 and treated the entire agreement value as unexplained investment under section 69. Before the learned CIT(A), the assessee submitted that the property had been purchased jointly with his wife, Smt. Kavita Varaiya, that the consideration was discharged in instalments extending over several financial years and that certain payments were made from her bank accounts. The learned CIT(A) called for a remand report; however, principally taking note of the assessee’s failure to furnish complete evidence before the Assessing Officer and holding that the

3 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya respective contributions of the joint owners had not been conclusively established, confirmed the entire addition of ₹47,81,250. 3. Before us, the learned counsel submitted that the approach adopted by the Assessing Officer in treating the entire agreement value as investment made during the relevant previous year is factually untenable. She pointed out that, although the agreement for purchase of the flat was registered on 24.12.2009, the consideration was payable in instalments and the payments continued up to Financial Year 2016–17. During Financial Year 2009–10, relevant to the assessment year under consideration, payments aggregating only to ₹19,53,300 were made and even these payments did not emanate from the assessee but were made exclusively by his wife, Smt. Kavita Varaiya, from her respective bank accounts. The particulars furnished before us are tabulated below: Financial Date of Stated Bank account Amount year payment source Capital withdrawal Vijaya Bank A/c No. 2009–10 08.04.2009 ₹2,00,000 from Riddhi 50120100003312 Siddhi Corporation Vijaya Bank A/c No. Accumulated 2009–10 08.05.2009 ₹4,45,000 503501010009855 savings/bank

4 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya Financial Date of Stated Bank account Amount year payment source balance Capital withdrawal Vijaya Bank A/c No. 2009–10 08.05.2009 ₹13,08,300 from Riddhi 50120100003312 Siddhi Corporation Total ₹19,53,300

5 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya years. Copies of the relevant bank statements and year-wise payment charts have also been placed on record. The learned Departmental Representative, however, relied upon the orders of the authorities below and submitted that these material particulars and the complete evidence explaining the sources of the three payments were not furnished before the Assessing Officer and, therefore, require verification. 5. We have heard the rival submissions and perused the material available on record. The addition under section 69 has been made solely by taking the aggregate consideration mentioned in the agreement dated 24.12.2009 as the amount invested by the assessee during Financial Year 2009–10. This inference cannot be sustained. Section 69 operates with reference to an investment which is found to have been made by the assessee in the financial year immediately preceding the relevant assessment year and which is either not recorded in the books of account, if any, maintained by him or the nature and source whereof is not satisfactorily explained. Thus, before the deeming fiction contained therein can be invoked, it is necessary to identify both the investment actually made during the relevant financial year and the person by whom such investment was made. The mere execution or registration of an agreement specifying an aggregate consideration does not establish that the entire consideration stood paid or invested during that financial year, particularly where the agreement contemplates

6 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya instalment-wise payments and the contemporaneous banking record indicates that payments continued over several subsequent years. 6. In the present case, the year-wise details placed before us show that, as against the total agreement value of ₹47,81,250, the amount paid during Financial Year 2009–10 was only ₹19,53,300. The remaining consideration was discharged in subsequent financial years and, therefore, cannot be regarded as an investment made during the previous year relevant to Assessment Year 2010–11. Section 69 does not permit the entire value of an asset to be brought to tax in one assessment year merely because the agreement for its acquisition was executed in that year, when the consideration was in fact paid in instalments spread over different years. Each payment has necessarily to be examined in the assessment year in which the corresponding investment was actually made. Consequently, the addition representing the balance amount of ₹28,27,950, which pertains to payments made in subsequent years, falls outside the relevant previous year and is directed to be deleted. 7. Insofar as the amount of ₹19,53,300 paid during Financial Year 2009–10 is concerned, the assessee has now produced material to show that the three payments aggregating to the said amount were made entirely by his wife from her bank accounts. The affidavits of the assessee and his wife are

7 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya consistent on this aspect. The wife has not only accepted having made the payments but has also identified their sources as accumulated savings and capital withdrawals from her proprietary concern, Riddhi Siddhi Corporation. The bank statements and payment schedule furnish prima facie support to this explanation. At the same time, it is an admitted position that the complete evidence explaining the immediate and ultimate sources of these payments, particularly the capital withdrawals from the proprietary concern, was not examined by the Assessing Officer. Since these documents go to the root of the addition and are necessary for determining whether any investment made during the relevant year can at all be attributed to the assessee, they are admitted as additional evidence. However, elementary fairness requires that the Assessing Officer be afforded an opportunity to verify them. 8. Accordingly, the issue is restored to the file of the Assessing Officer for the limited purpose of verifying the source and bank trail of the three payments aggregating to ₹19,53,300 made during Financial Year 2009–10. The Assessing Officer shall verify whether the payments of ₹2,00,000 and ₹13,08,300 were made from capital withdrawn by Smt. Kavita Varaiya from her proprietary concern, Riddhi Siddhi Corporation, and whether the payment of ₹4,45,000 was made out of the pre-existing balance or accumulated savings in her bank account. He may, for this limited

8 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya purpose, examine the relevant bank statements, capital account, books or other supporting records of the proprietary concern and the receipts or ledger confirmation of M/s Runwal Developers Pvt. Ltd. The scope of the restored proceedings shall remain confined to ₹19,53,300 and the Assessing Officer shall not reopen or re-examine the balance addition of ₹28,27,950, which stands deleted since the corresponding investments were made in subsequent financial years. 9. If, upon verification, it is found that ₹19,53,300 was paid by Smt. Kavita Varaiya from her own explained and identifiable sources, no addition shall survive in the hands of the assessee. Any addition in the assessee’s hands can be sustained only to the extent that positive material establishes that any part of the said payment in fact emanated from him or represented his investment routed through the account of his wife. Mere joint ownership of the property, by itself, would not justify attribution of the wife’s independently sourced investment to the assessee. The assessee shall furnish the requisite documents and extend due cooperation, and the Assessing Officer shall decide this limited issue after granting an adequate opportunity of being heard. Thus, out of the total addition of ₹47,81,250, the addition of ₹28,27,950 is deleted, whereas the issue relating to ₹19,53,300 is restored solely for verification in the terms indicated above.

9 ITA No.6291/Mum/2026 Javadsha hasmukray Varaiya 10. In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order pronounced on 26th September, 2026.

Sd/- Sd/- (MAKARAND VASANT (AMIT SHUKLA) MAHADEOKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 26/09/2026 KARUNA, sr.ps

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//

BY ORDER,

(Asstt. Registrar) ITAT, Mumbai