PAYALBEN RAJESHBHAI MALVANIYA,AHMEDABAD vs. THE ITO, WARD-5(3)(2), AHMEDABAD

Whether, on facts and circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition amounting to Rs.1,76,250/- as unexplained cash credit u/s.68 of the act?

Whether, on facts and in circumstances of the case and in law, Ld. AO erred in making addition while passing the assessment order u/s.147 of the Act. Further, appellant craves leave to add, amend, alter or withdraw all or any grounds of appeal.

The assessee is an individual filed her return of income under Section 139(4) of the Act in Form ITR-2, declaring total income of ₹3,13,010 for the year under consideration. The assessee's sources of income included short-term capital gains from the purchase and sale of equity shares and income from other sources. The case was reopened on the basis of information regarding the purchase and sale of immovable property involving a transaction value of ₹1,90,00,000. In response to the notice issued under Section 148 of the Act, the assessee filed her return of income on 24.05.2021, declaring the same income as disclosed in the original return. During the reassessment proceedings, the Assessing Officer issued notices under Sections 143(2) and 142(1) of the Act and a show-cause notice. During the assessment proceedings, the assessee explained that the immovable property valued at ₹1,90,00,000 had been jointly purchased by eight co-owners. According to the assessee, a loan of ₹1,50,00,000 had been obtained from Aditya Birla Finance for the purchase of the property. Accordingly, the proportionate - 3– purchase consideration attributable to each co-owner was ₹23,75,000, against which the proportionate loan liability worked out to ₹18,75,000, leaving a balance of ₹5,00,000 per co-owner to be funded otherwise. The assessee furnished a copy of the purchase deed, the loan sanction letter issued by Aditya Birla Finance and her bank statement for the relevant financial year. However, the Assessing Officer observed that the assessee had not furnished the name and creditworthiness of the person who had paid the difference amount of ₹1,76,250. Accordingly, the Assessing Officer treated the amount of ₹1,76,250 as unexplained income under Section 68 of the Act and added the same to the total income of the assessee.

Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). During the appellate proceedings, the assessee contended that the amount of ₹1,76,250 had been paid by her relative, Shri Ashokbhai R. Malvaniya, and furnished his confirmation along with other supporting documents. The CIT(A), however, did not accept the assessee's explanation and confirmed the addition.

Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal.

The learned counsel for the assessee submitted that the property was jointly purchased by eight co-owners and that the source of the investment had been explained by furnishing the purchase deed, loan sanction letter and bank statement. It was further submitted that the - 4– amount of ₹1,76,250 had been paid by Shri Ashokbhai R. Malvaniya, a relative of the assessee, and that his confirmation had also been furnished before the CIT(A). The learned counsel accordingly contended that the addition was made without properly appreciating the explanation and supporting evidence furnished by the assessee and prayed that the addition be deleted.