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Facts
The assessee, an individual, purchased an immovable property for ₹7,060,024/-. The Assessing Officer (AO) initiated proceedings under Section 147A and later passed an assessment order under Section 147 r.w.s. 144B, determining the assessee's total income at ₹2,436,423/- due to unexplained investment.
Held
The Tribunal held that the addition made by the AO invoking Section 69A of unexplained investment was not proper. The evidence indicated that the payment for the property was made by the assessee's son, which was supported by his bank account statements and was also partly funded by the assessee's husband.
Key Issues
Whether the addition made by the AO on account of unexplained investment in the purchase of immovable property is sustainable when the source of funds is demonstrably from the assessee's son and husband.
Sections Cited
147, 148, 148A, 144B, 133(6), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Ms. Neeta Chaudhary (the assessee/appellant) for the assessment year 2016-17 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 05.08.2025 wherein the appeal filed by the assessee against the assessment order passed u/s. 147 r.w.s. 144B of the Income-tax Act, 1961 [the Act] dated 21.2.2024 by the Assessment Unit, Income Tax Department was dismissed.
The assessee is aggrieved with the same and is in appeal before us challenging that the appellate order passed against the assessee is opposed to law, ignorance of evidence, probabilities, facts, and circumstances of the case and therefore it should be quashed.
We have noted the facts stated before us and recorded in the assessment order and the appellant order. Assessee is an individual, she did not file income tax return. It was noted that the assessee has purchased an immovable property for ₹ 7,060,024/–, therefore, the learned assessing officer issued a notice on 17th of March 2023 under section 148A (d) requiring the assessee to show cause why notice under section 148 should not be issued.
Assessee furnished reply on 23/3/2023 wherein it was stated that Assessee has purchased a flat, source of which has come from her husband who was working with NTPC and his son who is also working.
The learned assessing officer passed an order under section 14 8A (d) on 28/3/2023 by issuing a notice under section 148 of the Act. The assessee filed her return of income in response to that notice on 15/4/2023 at Rs. Nil. Ld AO issued a show cause notice on 16/1/2024 which was not complied with. The learned assessing officer obtained information from the seller of the immovable property by issuing notice under section 133 (6) of the Act. The seller provided the copy of agreement as well as the payment details. The learned AO noted that the assessee along with two other persons namely Mr Mishri Lal
Chaudhary and Shishir Chaudhry executed agreement to sale with the above company for purchase of the flat. The details of the cost of the flat along with the payments made by the assessee was amounting to ₹ 7,064,996. The seller also stated that the amount is received by cheque and tax of ₹ 70,600/– was also deducted at source.
The learned AO noted that based on the above information that assessee has paid a sum of ₹ 6,636,423/– during the financial year 2015 – 16 for purchase of flat. As the assessee has failed to explain the source of the funds the same remains unexplained. Therefore, a show cause notice was issued on 8/1/2024.
The assessee replied on 14/1/2024 and 19/1/2020 submitting the copy of the income tax return for assessment year 2016 – 17 of Shri Mishri Lal Chaudhary, bank statement with ICICI bank Ltd in the joint name of assessee along with her husband and the copy of the sale agreement. Therefore, the assessee explained that she has purchased the property in the joint name with her husband. The assessee was also granted an opportunity of personal hearing on 5/2/2024. On examination of the details the learned assessing officer was of the view that sale deed was executed on 26 November 2016 and the property was transferred in favour of assessee, wife of Shri Mishap Lal and his son Shri Shamir Chaudhary along with receipts. Perusal of the bank statement of Mr Mishri Lal Chaudhary, it is noted that during the year ₹ 42 lakhs has been paid to the builder however evidence in respect of payment of ₹ 2,436,423 would not be found. During the videoconferencing, the assessee explained that sum of ₹ 42 lakhs was paid by her husband Shri Mishri Lal Chaudhary and ₹ 2,436,423 was paid by his son Shri Shishir Chaudhary. She also promised to submit the bank statement of a sum but ld. AO noted that it was not submitted and therefore the learned assessing officer held that a sum of ₹ 2,436,423/– paid for purchasing this immovable property is from unexplained sources and passed an assessment order under section 147 read with section 144B of the Act determining the total income of the assessee at ₹ 2,436,423/–.
The assessee aggrieved with the assessment order preferred an appeal before the learned CIT – A stating that she is a female homemaker not having any business or profession or any other source of income. Her husband and along with her purchased the residential apartment wherein he decided to make assessee as the first owner in the purchase documents himself as well as her son as the joint owner. The documentary evidence was produced before the learned assessing officer in the form of the bank statement and return of income of the husband of the assessee. Further on 9 February 2024, the assessee also submitted before the learned assessing officer the transaction details of the son of the assessee along with bank statement and return of income filed by the son. The learned assessing officer did not consider the same.
The ld CIT (A) decided the issue as under: -
“During the course of appellate proceedings, the appellant has filed the written submission and the same is being perused by the undersigned. The appellant has argued that the flat was purchased jointly by the appellant and her husband and son, and the source of investment is from her husband and son. The appellant has explained the source in the hands of her husband by submitting bank account statement. Further, the appellant has argued that Rs.24,36,423/- is received from her son. The AO has requested to appellant to furnish the bank account statement of her son whereas the same was not submitted before the AO. During the appellate proceedings also, the appellant has not furnished any supporting documents for explaining the source of investment of Rs.24,36,423/-. In view of the above-mentioned facts and discussions, in the absence of supporting documents for explaining the source of investment of Rs.24,36,423/-, the undersigned does not find any reason to interfere with the addition made in the assessment order. The appellant has raised the objection on the addition of Rs.24,36,423/- through ground nos. 1 & 2, therefore, ground nos. 1 & 2 are decided against the appellant.”
Therefore, assessee is in appeal before us. The assessee reiterated the submissions made before the learned lower authorities and explained that the house is purchased by the assessee along with her husband and her son. The complete details of payments are supported by the bank account of son of the assessee and the return of income was also submitted on 09, February 2024, before the learned assessing officer. The learned AO as well as the learned CIT – A stated that no information is submitted before them. It was submitted that the copy of the Online E acknowledgement form of the statement of the return of income and the bank statement of the son of the assessee was submitted. The learned authorised representative further referred to the details of payment made by the son. In view of this it was submitted that there is no unexplained income earned by the assessee and the addition made by the learned lower authorities is not correct.
The learned authorised representative also submitted the photocopy of the details as well as a small paper book along with the note which was considered.
The learned departmental representative vehemently supported the orders of the learned lower authorities and stated that when the assessee could not submit the details before them, the addition has been made. With respect to the details now submitted by the learned authorised representative in the form of the acknowledgement that information was already submitted by the lower authorities, it was his submission that the matter may be restored to the file of the learned lower authorities for verification of the same.
We have carefully considered the rival contentions and perused the orders of the learned lower authorities. The facts are stated clearly hereinabove. The only issue involved is the addition to the extent of ₹ 2,436,423 out of this total sum of Rs. 65,65,823 paid by the assessee for purchase of house property. On verification of details, we find that Sri Shishir Chaudhary, Son of the Assessee through his bank account issued a cheque of ₹ 1,141,405 by cheque number 157055 which got cleared on 6/10/2025 and a further sum of ₹ 5,224,418 was issued to the builder by cheque number 36623 on 17/11/2015. The details of those cheques are shown by the seller of the property in the statement submitted under section 133 (6) of the Act which is reproduced by the learned assessing officer at page no. 3 of the assessment order. In view of the above facts, the flat purchased by the assessee of ₹ 7,064,966/–
was paid by the cheque no. 157055 on 1/10/2015 and a further balance of ₹ 5,224,418/– by cheque no. 36623 on 14/11/2015 as recorded by the seller of the property. Out of the above payments a sum of Rs 42 lakhs paid on 31/8/2015 by Shri Mishrilal Chaudhary to the account of Shishir Chaudhary who made the complete payments. Balance sum is TDS etc. Therefore, the complete sum of ₹ 7,064,966/– is paid by the bank account of the son of the assessee. Shri Mishri Lal Chaudhary, husband of the assessee was also working with the National Thermal Power Corporation Ltd and who deposited money in the bank account of the son to the sum of Rs 40 /- lakhs. This source of this fund was accepted by the Assessing officer. In view of the above facts, the addition of ₹ 2,436,423 made in the hands of the assessee is paid by the son of the assessee which is also supported by the bank account of the son of the assessee.
The information has already been submitted before the learned lower authorities in the form of bank statement of the son of the assessee with ICICI bank where the complete details of the cheque issued to the seller of the property are mentioned before the time given by the learned AO. This fact was also submitted before the learned CIT – A but no cognizance was taken of this information and the appeals were decided against the assessee.
Thus, addition made by the learned assessing officer by invoking the provisions of section 69A of unexplained investment is not proper and therefore the orders of the learned lower authorities are reversed, and the addition made is directed to be deleted. In the result ground no.2 of the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Pronounced in the open court on this 6th day of October, 2025.