VENKATESH,TIRUNELVELI vs. ITO, TIRUNELVELI

Brief facts of the case are as follows: For the assessment year 2019-20, assessee had not filed the return of income. Based on the information received through the Insight Portal regarding purchase of an immovable property for a consideration of Rs.25,00,000/-, the AO initiated proceedings u/s.148A of the Act. The assessee, in response to the notice issued u/s. 148A(b) of the Act, had stated that the property was purchased partly through a bank loan and partly from personal savings, gifts and borrowings from relatives. However, the assessee did not file the return of income nor complied with the statutory notices issued during the course of reassessment proceedings. The AO observed that assessee had availed housing loan of Rs.13,50,000/- from TN Mercantile Bank, which was confirmed by the letter from bank. Consequently, the AO completed the assessment on best judgment basis and considered the balance sum of ITA No.889/CHNY/2026 & SA No.67/CHNY/2026

Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). Before FAA also, the assessee did not respond to the hearing notices and hence, the appeal was decided ex-parte confirming the addition made by the AO.

Aggrieved, assessee filed appeal before the Tribunal. Before us, the Ld. AR submitted that the source of investment was out of gifts received from the assessee’s mother and sister, wherein a sum of Rs.7,00,000/- was received through banking channel from his mother and Rs.4,50,000/- was received in cash from his sister and subsequently deposited into the bank account of the assessee. It was pleaded that due to lack of proper representation before the lower authorities, the relevant evidences supporting the source of investment could not be furnished and therefore the matter may be restored to the file of the AO for fresh examination.

The Ld.DR submitted that adequate opportunities were provided from the offices of the AO and the FAA and there is no ITA No.889/CHNY/2026 & SA No.67/CHNY/2026

We have heard rival submissions and perused the materials on record. It is observed that the assessment was completed by the AO on best judgment basis treating a sum of Rs.11,50,000/- as unexplained investment u/s.69 r.w.s.115BBE of the Act on account of purchase of immovable property, since the assessee neither filed the return of income nor complied with the statutory notices issued during the course of reassessment proceedings. It is further noticed that even before the First Appellate Authority the assessee did not respond to the hearing notices and the appeal was decided ex-parte confirming the addition made by the AO. Before us, the Ld.AR submitted that the source of investment was out of gifts received from the assessee’s mother and sister and requested that one more opportunity may be granted to substantiate the claim by furnishing necessary documentary evidences. Considering the facts and circumstances of the case and in the interest of justice and fair play, we deem it appropriate to restore the issue to the file of the AO for fresh examination, with a direction to the assessee to produce all necessary evidences to explain the source of investment. The AO shall examine the ITA No.889/CHNY/2026 & SA No.67/CHNY/2026

In the result, the appeal filed by the assessee is allowed for statistical purposes and the stay application filed by the assessee is dismissed.

Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Madurai 4. ͪवभागीय ĤǓतǓनͬध/DR

गाड[ फाईल/GF.