MANNU BHATIA,DUBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIVIC CENTRE

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ITITA 3121/DEL/2025Status: DisposedITAT Delhi31 July 2025AY 2016-20173 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee has not provided sufficient documentary evidence to establish the source of funds for the purchase of the properties. Specifically, the e-sanction letter from ICICI Bank was deemed insufficient as it did not clearly indicate whether the loan was granted for the property in question, nor was a loan agreement exhibiting the property's address filed. Furthermore, details regarding mutual fund investments were also lacking. However, acknowledging that an assessee should not suffer due to the mistake of their counsel, the Tribunal decided to allow the appeal for statistical purposes to provide a fresh opportunity. The AO was directed to grant a meaningful opportunity to the assessee to file relevant documents, including the loan agreement and supporting evidence for mutual fund investments, before passing a fresh order. The Tribunal expressly left undecided the ultimate merits of the assessee's claim regarding the source of funds.

What were the facts?

The assessee, Mannu Bhatia, is in appeal against the order of the Assessing Officer (AO) dated March 31, 2025, for Assessment Year 2016-17. This is the second round of litigation. Previously, the ITAT had restored the matter to the Dispute Resolution Panel (DRP) to consider evidence regarding the source of funds for purchasing two properties in Sector-112, Gurgaon. The DRP, in its subsequent order, noted that the assessee had only provided an e-sanction letter from ICICI Bank, which did not clearly link the loan to the specific property. The DRP also observed a lack of details regarding mutual fund investments. The assessee's counsel acknowledged before the Tribunal that a loan agreement, specifying the property address, was not filed, and similar deficiencies were noted regarding mutual fund investment evidence.

What were the issues?

1. Whether the assessee has provided sufficient evidence to establish the source of funds for the purchase of two properties in Sector-112, Gurgaon, specifically regarding the loan disbursed by ICICI Bank and the nexus with the properties, as required under the Income Tax Act, 1961? Assessee's contention: The assessee's counsel reiterated submissions made before lower authorities and acknowledged that the loan agreement was not filed by a previous counsel. The assessee also sought liberty to file supporting evidence for mutual fund investments. Revenue's contention: The revenue, through the DRP's order, contended that the e-sanction letter from ICICI Bank was insufficient to establish the loan's purpose and its link to the specific property. The DRP also noted the absence of details regarding mutual fund investments.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’: NEW DELHI

Before: SHRI PRAKASH CHAND YADAV & SHRI NAVEEN CHANDRA

For Appellant: Shri Ruchesh Sinha, Adv. &, Shri Tarun Rohtagi, CA
For Respondent: Shri Nikhil Kumar Govila, CIT-DR
Hearing: 17/07/2025Pronounced: 31/07/2025

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’: NEW DELHI BEFORE SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER IT(IT)A No.3121/Del/2025 (ASSESSMENT YEAR 2016-17) Mannu Bhatia, ACIT, 1704, Mesk Tower, Civic Centre, AL Marsa Road, Dubai Vs. New Delhi. PAN-AFNPB4279A (Appellant) (Respondent) Assessee by Shri Ruchesh Sinha, Adv. & Shri Tarun Rohtagi, CA Department by Shri Nikhil Kumar Govila, CIT-DR Date of Hearing 17/07/2025 Date of Pronouncement 31/07/2025 O R D E R PER PRAKASH CHAND YADAV, JM: The present appeal of the assessee is arising out from the order of Ld. Assessing Officer dated 31st March, 2025 having DIN/Letter No. ITBA/COM/F/17/2024-25/1075358904(1) and relates to Assessment Year 2016-17. 2. This is second round of litigation. In the first round, the Co-ordinate Bench in ITA No.819/Del/2023 has restored the matter to the DRP and directed the DRP to pass order afresh after considering the evidences filed by the assessee with respect to the explanation of the source of money utilized by assessee in purchasing of house. The assessee has purchased two properties in Sector-112 of the Gurgaon. One is Unit No.1002 and other one is WW-02, Sector-112, Gurgaon. The lower authorities had asked for the source of money utilized by assesse in purchase of these houses. In response the assesse filed certain additional evidences before the DRP, which were not admitted by the DRP. And hence the matter has been restored by the ITAT.

3.

After receiving the directions of the ITAT, the DRP passed the fresh order and concluded that in this round also the assesse has only filed e-

2 ITA No.3121 /Del/2025 Mannu Bhatia vs. ACIT sanction letter of ICICI, from this letter it is not discernable as to whether the loan was granted for the same property which the assesse is contending. Similarly, the Ld. DRP has observed that the assessee has not submit any details with respect to the investment made in mutual fund.

4.

Aggrieved with the order of the AO/ DRP assessee has come in appeal before us. Ld. Counsel for the assessee while arguing the matter reiterated the submissions made before the lower authorities.

4.1 Ld. DRP has relied upon the order of the lower authorities. 5. We have heard the rival submissions and perused the material available on record. During the course of hearing, we have asked the assessee counsel as to whether the copy of loan agreement, exhibiting the address of the property, issued from ICICI Bank, has been filed by the assessee. Ld. Counsel for the assesse submitted that some other counsel was handling the matter before the lower authorities who did not file the copy of loan agreement. Even before us the counsel for the assessee has failed to file any such evidence which would show that the assessee has actually taken loan for the two properties. Further there is also no clarity with respect to the addresses of the property number-1 and 2. In such circumstances the assessee wont deserve any relief. However, it is the settled position of law that the an assessee would not suffer on account of mistake of his counsel. Therefore, in the interest of justice we are of the considered opinion that the matter requires fresh consideration at the end of AO. We order accordingly.

6.

Before parting we would direct the assessee to file the relevant documentary such as loan agreement and any other supporting documents which would show the nexus of loan disbursed with the address of the properties. Similarly, the assessee will have liberty to file supporting evidence with respect to the investments made in mutual funds. Needless to say, that AO will grant meaningful opportunities to the assessee before passing any order.

3 ITA No.3121 /Del/2025 Mannu Bhatia vs. ACIT 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 31/07/2025.

Sd/- Sd/- (NAVEEN CHANDRA) (PRAKASH CHAND YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31/07/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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