JANKI NIPUL SAVLA ,MUMBAI vs. INCOME TAX OFFICER INTERNATIONAL TAXATION WARD 4(2)(1), MUMBAI

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ITA 982/MUM/2025Status: DisposedITAT Mumbai27 June 2025AY 2022-23Bench: Shri Rahul Chaudhary (Judicial Member), Shri Omkareshwar Chidara ( (Accountant Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the appellant was non-compliant, the lower authorities did not provide a full opportunity to explain the investments. The Tribunal decided to remit the matter back to the AO to allow the appellant to provide documentary evidence and explain the source of investments.

What were the facts?

The appellant, an NRI based in Kenya/USA, is contesting an adhoc addition of Rs. 29,03,20,568/- for unexplained investments and an addition of Rs. 3,15,014/- for undisclosed short-term capital gains. The Assessing Officer (AO) made these additions after the appellant failed to comply with notices and explain the source of funds.

What were the issues?

Whether the additions made by the AO are justified without providing the appellant sufficient opportunity to explain the source of investments, especially considering the appellant is an NRI. Whether the non-compliance by the appellant warrants ex-parte additions without considering evidence submitted later.

Which sections of the Income-tax Act were involved?

Section 69,Section 144,Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Mumbai “I” Bench, Mumbai.

Before: Shri Rahul Chaudhary (JM) & Shri Omkareshwar Chidara (AM)

For Appellant: Shri Krishna Kumar
Pronounced: 27/06/2025
2.

From the assessment order, it is observed that the appellant is NRI based in Kenya/USA during period of consideration. Notices under section 142(1) and 143(2) of the I.T. Act were served upon the appellant through e- mail from time to time on ITBA portal. The Ld. AO has got information about various investments of appellant in Fixed Deposits and mutual funds and accordingly notice was issued to the appellant to explain source of the same. As no reply was submitted a final show-cause notice was issued by the Ld.

2 Janki Nipul Savla AO which says that in case of non-compliance of this notice, assessment would be completed under section 144 of Act as best judgment assessment on the basis of material available on record. As the appellant failed to comply with the notices dated 12.8.2023, 13,2,2024 and 24.2.2024 and a show- cause notice dated 21.3.2024 and no requisite details were furnished and hence the Ld. AO made addition under section 69 of the Act.

3.

Aggrieved by the addition made by the Ld. AO, an appeal was filed before Ld. DRP. From the order of Ld. DRP, it is observed that there is no compliance by the appellant and hence all the additions made were confirmed by this first appellate authority.

4.

Aggrieved by the addition of the Ld. AO as well appeal order of Ld. DRP, present appeal is filed before the Bench with grounds of appeal mentioned in first page of this order.

5. Case was fixed for hearing on 12.6.2025 and on that date Ld. AR of the appellant filed a paper book comprising of documents viz., ICICI bank statement, date-wise transaction report of mutual fund, capital gain statement to demonstrate all these deposits and investments were out of salary and savings of earlier years. Admittedly, all these evidences were not filed before the lower authorities.

6. Ld. DR has argued that the despite several notices issued by the Ld. AO and DRP, appellant remained non-compliant and hence additions made by the Ld. AO should be confirmed.

7. After hearing both sides and perusing the paper book filed by the appellant, it is decided to remit the matter back to the file of Ld. AO because all these documentary evidences were not filed before the Ld. AO/DRP. The Bench decided to give one more opportunity to appellant to explain the source of all these investments by taking a lenient view that the appellant was not residing in India during the period under consideration. In view of 3 Janki Nipul Savla the same, all the issues of investments, deposits and levy of short term capital gains are remitted to the file of Ld. AO for fresh consideration and passing a speaking order after giving effective opportunity to the appellant.

8. The appeal of appellant is allowed for statistical purposes.

Order pronounced in the open Court on 27/06/2025.

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