CHANDRASHEKHAR RAMRAO SALUNKHE,THANE vs. ITO (IT), WARD 4(2)(1), MUMBAI

The present appeal by the Assessee is directed against the Final Assessment Orders, dated 27/12/2024, passed by the Assessing Officer under Section 147 read with Section 144C(13) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2016-2017 as per the directions issued by the Commissioner of Income Tax [Dispute Resolution Panel - 1], Mumbai- 2 [for short ‘DRP’], on 21/11/2024 under Section 144C(5) of the Act.

The Assessee has raised following grounds of appeal: (a) Ground No. 1 challenging the protective additions of INR.13,59,982/- made by the Assessing Officer in relation to investment in immovable property, and (b) Ground No.

The relevant facts in brief are that the Assessee, a non-resident individual, filed its return of income for Assessment Year 2016-2017 in response to a notice under Section 148 of Act and disclosed a taxable income of INR.2,86,719/-. Subsequently, the Assessing Officer passed a Draft Assessment Order under Section 144C(1) on 29/03/2024 proposing following additions to the income disclosed in the original return of income: (a) INR.2,53,000/- towards the income from house property (b) INR.33,119/-income from other sources (c) Addition under Section 69 INR.13,59,982/- towards investment in purchase of house property at Pune:- (d) Additions on account of un-explained sources for investment in mutual fund and securities for purchase of securities sources reg. INR.12,39,208

The Assessee filed objections before the DRP against the Draft Assessment Order. The DRP directed the Assessing Officer to delete 3 proposed additions while directing the Assessing Officer make addition of INR.13,59,982/- under Section 69 of the Act above on protective basis. Therefore, the Assessing Officer passed the Final Assessment Order under Section 144C(13) of the Act making protective addition of INR.13,59,982/- as aforesaid. Further, the Assessing Officer disallowed the benefit of deduction of INR.1,50,000/- under Section 80C of the Act and INR.9,198/- under Section 80TTA of the Act.

Being aggrieved, the Assessee has preferred the present appeal before the Tribunal challenging the above addition/disallowance.

We have considered the rival submissions and have perused the material on record.

By way of Ground No. 1 the Assessee has challenged the protective additions of INR.13,59,982/-. The aforesaid addition pertains to investment made towards purchase of residential property from Flagship Infrastructure Pvt. Ltd. at Blue Ridge Scheme, Hinjawadi, Mullshi, Pune.

Perusal of the record shows that an aggregate addition of INR.1,10,33,292/- was made vide Assessment Order, dated 15/05/2023, for the Assessment Year 2015-2016 whereby entire purchase consideration of INR INR.84,57,585/ was added in the hands of the Assessee as income for the Assessment Year 2015-2016. Admittedly, the Assessee has preferred appeal for the Assessment Year 2015-2016 which is pending adjudication before the Learned Commissioner of Income Tax Appeals. For the Assessment Year 2016- 2017, the Assessing Officer has made protective addition of INR.13,59,982/- being difference between the purchase consideration of INR.84,57,585/- and housing loan of INR.70,97,603/- availed by the Assessee from HDFC Ltd. The Assessee had placed on record copy of the Agreement for Sale, dated 02/04/2014 and Loan Agreement Dated 14/07/2014. Admittedly, the Assessing Officer has accepted that loan of INR.70,97,603/- was taken by the Assessee. The Assessee has also furnished the details of payments made by the Assessee directly towards the purchase of property which are as under: Sr. Date Amount Transaction Bank Sources of Funds Supporting No Paid Details Account documents 1 29/11/2013 11,000/- 1st payment City bank Appellants and his Citi Bank against purchase account no. spouse salary statement of property 5404545118 earned at USA November 2013 2 02/12/2013 92,090/- 2nd payment City bank Appellants and his Citi Bank against purchase account no. spouse salary statement of property 5404545118 earned at USA December 2013 3 04/12/2013 7,68,803/- 3rd payment City bank Funds borrowed Citi Bank against purchase account no. from the in-laws of statement of property 5404545118 appellant December 2013 4 20/12/2013 4,53,596/- 4th payment City bank Appellants and his Citi Bank against purchase account no. spouse salary statement of property 5404545118 earned at USA December 2013 5 08/01/2014 4,18,296/- 5th payment City bank i)Rs. 3,00,000/- Citi Bank against purchase account no. from In-laws and statement of property 5404545118 Rs. 1,18,296/- from January 2014 appellants and his spouse salary earned at USA 17/01/2014 67,000/- 6th payment City bank Appellants and his Citi Bank against purchase account no. spouse salary statement of property 5404545118 earned at USA January 2014 7 10/05/2014 10,000/- 7th payment State Bank Appellants and his State Bank of against purchase of India spouse salary India statement of property account no. earned at USA May 2014 3087922199 82 8 17/05/2014 1,55,000/- 8th payment State Bank Appellants and his State Bank of against purchase of India spouse salary India statement of property account no. earned at USA May 2014 3087922199 82 Total 19,75,785/- None of the above payments were made during the relevant previous year 2015-2016. Further, the Assessee has, in any case, explained that the funds were remitted from outside India through banking channel and the source of funds was the salary income earned by the Assessee and her spouse in United States of America. Therefore, the question of making any addition in the hands of the Assessee for the previous year 2015-2016 relevant to the Assessment Year 2016-2017 under Section 69 of the Act does not arise. Therefore, we delete the addition of INR.13,59,982/- made in the hands of the Assessee on protective basis. Thus, Ground No. 1 raised by the Assessee is allowed.

By way of Ground No. 2 the Assessee has challenged the disallowance of deductions claimed under Chapter VI-A of the Act aggregating INR.1,59,198/-. It has been claimed by the Assessee that deduction of INR.1,50,000/- claimed under Section 80C of the Act and deduction of INR.9,198/- claimed under Section 80TTA of the Act have been disallowed while computing tax liability. It has been contended that the said deduction were claimed in the original return of income. In order to redress the grievance of the Assessee, we deem it appropriate to remand this issue to the file of the Assessing Officer with the directions to verify the records and adjudicate upon Assessee’s claim for deduction of INR.1,50,000/- under Section 80C of the Act and deduction of INR.9,198/- under Section 80TTA of the Act afresh as per law after granting the Assessee a reasonable opportunity of being heard. Thus, Ground No.2 raised by the Assessee is allowed for statistical purposes.

In terms of the paragraph 7 to 8 above, appeal preferred by the Assessee is allowed

""थ"/ The Respondent. 3. आयकरआयु"/ The CIT

"धान आयकर आयु"/ Pr.CIT 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, मुंबई/ DR, ITAT, Mumbai 6. गाड" फाईल / Guard file.