MUTHKUMAR NAGARAJ SANDEEP KUMAR,BANGALORE, KARNATAKA vs. ITO, INTERNATIONAL TAXATION, WARD-1(2), BANGALORE

ITA 2018/BANG/2025Status: DisposedITAT Bangalore29 September 2026AY 2015-1611 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal considered the rival contentions and the orders of the lower authorities. The assessee had applied for the admission of additional evidence, including affidavits from his mother and spouse detailing their contributions from savings, and bank account records showing cash withdrawals. The assessee argued that if these sources were considered, the addition would be explained. The Tribunal noted that these details were not produced before the Assessing Officer. In the interest of justice, the Tribunal deemed it appropriate to restore the entire issue to the Assessing Officer. The assessee is directed to substantiate the sources of funds used for the property purchase, and the Assessing Officer is to examine the evidence and decide the issue afresh. The Tribunal explicitly stated that the appeal is allowed for statistical purposes, indicating that a final decision on merits has not been reached by the Tribunal itself but is being remitted for re-adjudication.

What were the facts?

The assessee, Muthukumar Nagaraj Sandeep Kumar, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, against the order dated 16 July 2025 passed by the Commissioner of Income Tax (Appeals) – 12, Bangalore. This order had dismissed the assessee's appeal against a reassessment order dated 23 March 2023 passed by the Income Tax Officer, International Taxation, Ward–1(2), Bangalore, under Section 147 of the Income-tax Act, 1961. The reassessment order pertains to Assessment Year 2015-16. The Assessing Officer made an addition of INR 23,07,520 as unexplained investment under Section 69 of the Act. The assessee had purchased immovable property for INR 70 lakh, with stamp duty and registration charges totaling INR 5,40,025, making the total expenditure INR 75,39,785. The Assessing Officer noted that INR 44 lakh was paid in cash to vendors, and an additional INR 65,520 towards stamp duty was also paid in cash, the sources of which were not adequately supported.

What were the issues?

1. Whether the addition of INR 23,07,520 as unexplained investment under Section 69 of the Income-tax Act, 1961, is erroneous, given the assessee's explanation of the sources of funds? (Question of law and fact, concerning Section 69). Assessee's Contention: The assessee argued that the addition was erroneous as the funds used for the property purchase were explained. These included INR 20,77,520 from family savings (mother and wife contributing INR 11 lakh and INR 12 lakh respectively from their pin money/savings), and the remaining amount from cash withdrawals from the bank, including earnings abroad. The assessee contended that Section 69 does not apply when a plausible source of funds is demonstrated through bank withdrawals, earnings history, and family savings. The assessee relied on judicial precedents: Shri Raj Kumar Kakrania vs. DCIT (ITAT Delhi), S.R. Venkata Ratnam vs. CIT (Karnataka High Court), Smt. P. Padmavathi vs. The ITO (Karnataka High Court), AICT vs. Baldev Raj Charla (ITAT Delhi), and Smt. Veena Awasthi (ITAT Lucknow). Revenue's Contention: The Revenue, through its standing counsel, strongly supported the orders of the lower authorities, implying that the addition made by the Assessing Officer and confirmed by the CIT(A) was justified.

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 143(3),Section 148A,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT This appeal has been filed by Muthukumar Nagaraj Sandeep Kumar against the appellate order dated 16 July 2025 passed by the Commissioner of Income Tax (Appeals), Bangalore–12 [the learned CIT(A)], for assessment year 2015–16. By that order, the learned CIT(A) dismissed the assessee’s appeal against the reassessment

ITA 201

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