SOWMYA BELLUR KUMARASWAMY ,BANGLAORE vs. ITO,INTL. TAXATION WARD -1(2), BENGALURU

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ITITA 261/BANG/2025Status: DisposedITAT Bangalore15 September 2025AY 2016-176 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal accepted the assessee's application to admit additional evidence, including bank statements from State Bank of India and HDFC Bank, email communications, RTGS challans, and cheque copies, as the documents were received after the lower authorities' orders. The Tribunal noted that the assessee's husband transferred Rs. 20,00,000/- on 21/07/2015 to the assessee's HDFC account, and on 22/07/2015, the assessee paid Rs. 20,02,382/- by cheque to the builder. The RTGS was initiated from the husband's State Bank of India NRE account, authorized by the mother-in-law. The Tribunal found that the RTGS amount was utilized for payment to the builder. Since these documents were not available before the AO or DRP, the Tribunal remitted the issue back to the AO for consideration of the additional evidence. If found in order, the addition of Rs. 20,02,382/- under Section 69 would be deleted. The appeal was partly allowed.

What were the facts?

The assessee, Smt. Sowmya Bellur Kumaraswamy, an NRI, is in appeal before the ITAT against the final assessment order dated 17/12/2024 for Assessment Year 2016-17. The Assessing Officer (AO) made an addition of Rs. 20,02,382/- as unexplained investment under Section 69 of the Income Tax Act, 1961. The AO had information that the assessee invested in property without providing details. The assessee claimed the investment was funded by her husband working in the USA and her mother-in-law. The AO treated the amount from the mother-in-law as unexplained. The Dispute Resolution Panel (DRP) directed the AO to obtain a remand report on additional evidence. The AO accepted sources for part of the amount but not for Rs. 20,02,382/-, as the bank statement was not filed. The bank did not respond to a notice under Section 133(6). The DRP upheld the addition.

What were the issues?

1. Whether the addition of Rs. 20,02,382/- as unexplained investment under Section 69 of the Income Tax Act, 1961, is justified, considering the assessee's claim that the funds originated from her husband's bank account. - Assessee's contention: The source of Rs. 20,02,382/- was from the assessee's husband's bank account, supported by RTGS slips and cheque leaves, with bank confirmation. The AO erred in misinterpreting signatures and ignoring submissions. The AO also disregarded his own findings in the remand report regarding the husband's bank account. The DRP proceedings were concluded without a reasonable opportunity for the assessee and the bankers. - Revenue's contention: The appeal should be dismissed, relying on the orders of the lower authorities. 2. Whether the AO erred in not exercising reasonable inquiries and failing to appreciate the procedure under Section 148 and 148A of the Act, leading to a perverse order. - Assessee's contention: The AO failed to conduct proper inquiries under Sections 148 and 148A, resulting in an erroneous addition. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 144C,Section 133(6),Section 148,Section 148A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.

For Appellant: Shri Siva Nagaraju S, CA, Smt. Suganthamala T M

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE

BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

IT(IT)A No. 261/Bang/2025 Assessment Year : 2016-17

Smt. Sowmya Bellur Kumaraswamy, CA S V Narasaiah, The Income Tax No. 54, Beside Balaji Hall, Officer, 1st Floor, 1st Main, International 1st Cros, Taxation 1(2), Vysya Bank Layout, Bangalore. Vs. BTM 2nd Stage, Bangalore – 560 076. PAN: AMDPK8869N APPELLANT RESPONDENT

Assessee by : Shri Siva Nagaraju S, CA : Smt. Suganthamala T M, Revenue by CIT-DR

Date of Hearing : 19-06-2025 Date of Pronouncement : 15-09-2025

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the final assessment order of the AO dated 17/12/2024 in respect of the A.Y. 2016- 17 and raised the following grounds: “1. The order of the learned Assessing Officer/Respondent is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Addition of Rs. 20,02,382/- as Income from unexplained investments U/s.69 of Income-tax Act,1961

Page 2 of 6 IT(IT)A No. 261/Bang/2025 A. The learned Assessing Officer failed to appreciate the source of Rs. 20,02,382/- was from Appellant husband's bank account bearing A/c. No. 10005062082 held with State Bank of India, Thyagarajanagar and the same was supported by a copy of RTGS Slip and Cheque Leaf with due confirmation from bank. B. The learned assessing officer erred in confirming the said addition by misinterpretation of signature and the name on the cheque leaf and ignored the appellant's submission and the material on record. C. The learned assessing officer failed to appreciate the fact that the above said bank account bearing A/c. No. 10005062082 is of Mr. Krishnamurthy Vivek N (Appellant's husband) by disregarding his own findings in remand report. D. The learned assessing officer and Hon'ble Dispute Resolution Panel concluded the remand proceedings without providing reasonable opportunity to the appellant and the bankers. E. The appellant prays that the order passed under section 147 r.w.s. 144C be quashed and the impugned addition of Rs. 20,02,383/- be deleted. 3. The Learned Assessing Officer ought to have exercised reasonable inquiries a :thereby failed/erred to appreciate the procedure and the provisions as per section 148 and 148A of the Act and consequently erred in adding income of Rs. 20,02,382/- and consequently passed a perverse order on the facts and circumstances of the case. 4. The Appellant craves leave of this authority to add, alter, delete or substitute any or all of the above grounds as may be necessary at the time of hearing. 5. The Appellant craves leave of this authority to produce additional evidence as may be necessary at the time of hearing. 6. Wherefore the Appellant prays before this authority that the appeal may be allowed for the advancement of substantial cause of justice and equity.” 2. The assessee is a non-resident Indian (NRI) and the AO had specific information that she had invested in a property but no details were filed by her before the authorities. Notice u/s. 142(1) was issued on various dates

Page 3 of 6 IT(IT)A No. 261/Bang/2025 and the assessee submitted that the investments in the immovable property was made out of the amounts transferred by her husband who is employed in USA and from the amount received from her mother-in-law. The assessee had not furnished any evidences about the amounts received from her mother-in-law. Therefore the AO had treated the said investment as unexplained investment u/s. 69 of the Act insofar as the amounts received from her mother-in-law. On that basis, a draft assessment order was made u/s. 144C of the Act for which the assessee filed objections before the Ld.DRP. Before the Ld.DRP, the assessee had filed additional evidences. The Ld.DRP directed the AO to send a remand report based on the additional evidences filed by the assessee. In the remand report, the AO had accepted that the assessee had submitted sources of funds for an amount of Rs. 18,96,704/- out of the proposed addition of Rs. 38,64,101/-. The AO had not accepted the documents filed in support of the balance amount of Rs. 20,02,382/- for the reason that the bank statement was not filed before him. Further, the AO issued a notice u/s. 133(6) of the Act to State Bank of India, Thyagrajnagar Branch and sought for the copy of the bank statement of the assessee’s husband. The said bank had not responded to the said notice and therefore the AO had not accepted the said explanation and made the addition of Rs. 20,02,382/-.

3.

Based on the said report, the Ld.DRP had passed directions stating that the assessee had not established the sources of funds for an amount of Rs. 20,02,382/- and therefore directed to treat the same as unexplained investments u/s. 69 of the Act.

4.

The AO based on the directions given by the Ld.DRP had concluded that the assessee had not submitted any details in respect of the investment made in the immovable property for a sum of Rs. 20,02,382/- and made the final assessment accordingly.

5.

As against the said final assessment order, the assessee is in appeal before this Tribunal.

Page 4 of 6 IT(IT)A No. 261/Bang/2025 6. At the time of hearing, the assessee filed an application to admit the additional evidences such as the bank statement from the State Bank of India, HDFC Bank and email communications made between the assessee and the State Bank of India and also the copies of the RTGS challan and the cheque issued for transferring the amount through RTGS. The assessee submitted that the said bank details were received by her after the order has been passed and therefore prayed to admit the said additional evidences filed before this Tribunal and thereafter decide the appeal. We have considered the said application and the additional evidences and accepted the reasons stated by the assessee for not producing the said documents before the lower authorities and therefore in the interest of justice, we admit the said additional evidences for deciding the said appeal.

7.

The Ld.AR submitted that the property has been purchased from the monies transferred by the assessee’s husband who is working in USA and therefore the allegation that the said amount of Rs. 20,02,382/- as unexplained investment u/s. 69 is not correct. The Ld.AR also draw our attention to the RTGS challan, the cheque given for the said RTGS and the bank statements of the State Bank of India and the HDFC Bank to show that the amount was transferred by way of RTGS from the assessee’s husband’s account to the assessee’s account at HDFC Bank and thereafter the payment was made to the builder by way of cheque and therefore prayed that the appeal may be allowed.

8.

The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.

9.

We have heard the arguments of both sides and perused the materials available on record.

10.

As seen from the additional evidences filed by the assessee that the assessee’s husband had transferred an amount of Rs. 20,00,000/- on 21/07/2015 into the bank account of the assessee and later on, on

Page 5 of 6 IT(IT)A No. 261/Bang/2025 22/07/2015, the assessee had paid a sum of Rs. 20,02,382/- by way of cheque to the builder M/S Prestige Altavista. We have also perused the bank statement given by the State Bank of India in support of the said transactions. We have also gone through the RTGS challan dated 21/07/2015 and the State Bank of India NRE account cheque of the assessee’s husband for transferring the money through RTGS. Admittedly, the RTGS cheque was issued from the State Bank of India account of the assessee’s husband which was signed by the assessee’s mother-in-law as the authorised signatory for operating the said NRE account. We have also perused the RTGS challan in which the account number of the assessee in the HDFC Bank has been mentioned and the RTGS is also in favour of the assessee. Therefore from the said documents, we came to know that the assessee had received a sum of Rs. 20,00,000/- by way of RTGS from the account of the assessee’s husband on 21/07/2015 and thereafter the said RTGS amount was utilised for paying to the builder M/s. Prestige Altavista on 22/07/2015.

11.

The said documents were not made available before the AO or before the Ld.DRP and therefore in order to give an opportunity to the AO, we are remitting this issue to the file of the AO for considering the additional evidences now filed by the assessee and if the same are found to be in order, delete the addition made u/s. 69 of the Act insofar as the amount of Rs. 20,02,382/- is concerned.

12.

In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 15th September, 2025.

Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member

Bangalore, Dated, the 15th September, 2025. /MS /

Page 6 of 6 IT(IT)A No. 261/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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