MRS. PURNIMA PAUL,THANE vs. INCOME TAX OFFICER, WARD 3(2), THANE , THANE

Appellant by : Shri Satyaprakash Singh Respondent by : Mr. Virabhadra S. Mahajan (Sr. DR) Date of Hearing 03.07.2025 Date of Pronouncement 22.07.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s 144 r.w.s. 144B of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 11.03.2024 for the Assessment Year [A.Y.] 2015-16.

A.Y. 2015-16 Mrs. Purnima Paul 2. The grounds of appeal are as under:

1. The order dated 27/03/2025 bearing No.ITBA/NFAC/S/250/2024- 25/1075124129[1] passed by the Honourable CIT[Appeal], NFAC, Delhi, is excessive, unreasonable, arbitrary, against the provisions of Income Tax Act, 1961 and therefore liable to be quashed.

2. On facts and circumstances of the case and in law, the Honourable C.I.T.(A) has erred in confirming the addition of Rs.98,00,000/- made by the Assessing Officer being capital gain in respect of sale of two residential properties ignoring the facts that:- a) The name of the Appellant was added for sake of convenience and future uncertainty and the Appellant neither received any amount not contributed anything for the said residential properties. b) Husband of the Appellant has declared the capital gain on sale of property and has also claimed deduction under section 54 of Income Tax Act, 1961 as new property was acquired by him. Necessary evidence i.e. ITR, Computation of total income, Sale Agreement, Notary Public etc. was furnished before CIT(A). c) All the sale proceeds as well as TDS in respect of property sold were claimed and paid by husband of the Appellant only.

3. Without prejudice to the above, without admitting documents furnished, addition on account of capital gain is not in accordance with the law and facts of the case due to the following: - a] As mentioned in order the Appellant was joint owner of property and therefore whole of sale proceeds/ capital gain cannot be treated as her income. b] No deduction in respect of cost of acquisition in respect of property sold was given to the Appellant and whole of sale proceeds taken as capital gain and added as income. c] The new property was also purchased in the joint name of the husband of the Appellant and therefore deduction under section 54 prorata may kindly allowed to the Appellant.

A.Y. 2015-16 Mrs. Purnima Paul 3. As per the assessment order, the assessee is an individual. She had not filed her return of income u/s 139(1) of the Act, despite making huge transactions during the relevant year. There was information in the possession of the department that the assessee had sold two immovable properties totalling Rs. 98,00,000/- during the year. Further, the assessee had also received interest income of Rs. 33,082/-. Subsequently, notice u/s 148 of the Act was issued to the assessee. However, the assessee did not file any return of income. In absence of cost and indexed cost of the property, the total sale consideration of the properties amounting to Rs. 98,00,000/-was proposed to be considered as undisclosed short term capital gains liable to be added to the total income of the assessee. In response, she submitted the copy of acknowledgement of return filed by her husband for A.Y. 2015-16 and computation of income of the same. On verification of computation of income submitted by the assessee of Shri Narayan Paul it was found that he had shown income from capital gain Rs. Nil. The assessee had submitted the capital gain computation of her husband without any documentary evidences. Therefore, the transactions made by her husband remains unexplained Accordingly, the AO proceeded to finalize the assessment ex-parte u/s. 144 of the Act on the basis of the facts on record.

A.Y. 2015-16 Mrs. Purnima Paul 4. During the appeal proceedings before ld.CIT(A), the assessee reiterated her stand that the agreement for sale was joint with her husband, Shri Narayan Paul, being the first holder, her husband had declared the entire sale transaction in his return of income and has paid taxes accordingly. The assessee also furnished the following documents in support of her claim, which are available on record:

1. 1. Sale agreement of both the properties. 2. Copy of Notary public. 3. Copy of Computation of Income of Shri Narayan Paul.

4. Copy of return of income of Shri Narayan Paul. 4.1 The ld.CIT(A) observed that on verification of the computation of income of her husband submitted by the assessee, that he had shown Nil income under the head Capital Gain and claimed exemption u/s 54 of the Act. However, no evidence in respect of the same had been furnished. As this is a joint property, it was the bounden duty of the appellant to explain the nature and source for the transaction she has undertaken. Accordingly, he held that the assessee failed to prove that the addition made by the AO is wrong in absence of any cogent documentary evidences. Therefore, the addition made by the AO was sustained and the grounds were dismissed.

A.Y. 2015-16 Mrs. Purnima Paul 5. Before us, the ld.DR relied on the orders of the authorities below. Per contra, the ld.AR vehemently contested the addition claiming that no addition could be made in the hands of the assessee as the impugned property was purchased by her husband from his own funds and it was only for the sake of future issues, her name had been included as joint owner. She had no separate source of income. As such, no returns are being filed. In support of the contention the ld.AR has also furnished ITR details of her husband, computation of income, copy of agreement etc. explaining that the sale/purchase of said properties have been duly reflected in the return filed by her husband Sri Narayan Paul. It is submitted that neither the AO nor the ld.CIT(A) took cognizance of such apparent facts duly presented before them.

5.1 We have duly considered all the relevant facts of the case and find that the addition has been made by the AO and upheld by the ld.CIT(A) without proper examination of the details submitted. The ld.CIT(A) has failed to appreciate the contentions of the assessee as also documentary evidences produced before him in correct perspective. Accordingly, the appellate order is set aside remitted back to him to examine all the relevant details pertaining to the assessment of her husband so as to arrive at a fair and just conclusion on the actual ownership of the impugned properties and act as per law. Needless to A.Y. 2015-16 Mrs. Purnima Paul state the assessee shall be accorded due opportunity of hearing in the matter.

Order pronounced in the open court on 22.07.2025.