NEETA CHAUDHARY,BENGALURU vs. INCOME TAX OFFICER, WARD 4(1)(3), BENGALURU

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: -

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/–

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.