GRACE JAYANTHI RANI, REP. BY JCD PRABHAKAR,CHENNAI vs. ITO, CORPORATE CIRCLE-1(1), CHENNAI
आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई
IN THE INCOME TAX APPELLATE TRIBUNAL
‘A’ BENCH, CHENNAI
ŵी जॉजŊ जॉजŊ के, उपाȯƗ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ के समƗ
BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.:523/Chny/2025
िनधाŊरण वषŊ / Assessment Year: 2016-17
Grace Jayanthi Rani,
Represented by J C D Prabhakar,
No.1, 4th Avenue, Harrington Road,
Chetpet, Chennai – 600 031. vs.
The Income Tax Officer,
Corporate Circle 1(1),
Chennai.
[PAN:AEPPC-1579-R]
(अपीलाथŎ/Appellant)
(ŮȑथŎ/Respondent)
अपीलाथŎ की ओर से/Appellant by : Shri. S. P. Chidambaram, Advocate
ŮȑथŎ की ओर से/Respondent by : Shri. Kumar Chandan, J.C.I.T.
सुनवाई की तारीख/Date of Hearing
:
18.06.2025
घोषणा की तारीख/Date of Pronouncement
:
09.07.2025
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
This appeal is filed by the Assessee against the order of the Learned
Commissioner of Income Tax, NFAC, Delhi, [ld.CIT(A)] dated 14.10.2024 for AY
2016-17. 2. At the outset, we find that there is a delay of 55 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that during the proceedings before the CIT(A), the assessee passed away on 24.09.2023 and as such the order dated 14.10.2024 passed by the CIT(A) was inadvertently overlooked due to unavoidable circumstances and necessary action could not be taken on time. Only upon receiving a telecon from the :-2-:
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juri ictional Assessing Officer in the first week of February, 2025, he became aware about the order passed by CIT(A). Immediately, he approached the legal counsel for taking further course of action and based on discussions, the appeal was decided to be filed. Accordingly, he filed the appeal against the order before this Tribunal.
Hence, there was a delay in filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication.
The assessee has raised the following grounds of appeal:-
The Appellant objects to the order dated 14.10.2024 issued under Section 250 read with section 251 of the Income Tax Act, 1961 ('Act') by the Commissioner of Income Tax (Appeal) on the following grounds:
The impugned order is contrary to law, facts and circumstances of the case.
The CIT(A) ought to have considered that the reopening of the Assessment is without juri iction and as such unsustainable in law.
The CIT(A) ought to have appreciated that the reopening is barred by limitation.
The CIT(A) ought to have appreciated that there is no change of opinion and as such reassess is unsustainable in law.
Without prejudice to the above technical grounds, the Appellant raises the following grounds on merits
The CIT(A) erred in confirming the addition of Rs.8,01,88,500/- made by AO under section 69A r.w.s 115BBE of the Act.
The CIT(A) failed to consider that despite the Appellant has furnished the details with respect to additions made, the AO erred in making the addition.
The CIT(A) ought to have appreciated that the M/s. Golden Star Promoters Pvt Ltd. ("the Company") has made payment to M/s. Futura
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Polyesters Limited and no payment has been made from the account of the Appellant.
The CIT(A) failed to consider that the investment made in the immovable property has been duly accounted in the books of the M/s. Golden Star Promoters Pvt Ltd during FY 2018-19 and as such additions made in the hands of the Appellant is invalid.
The CIT(A) failed to appreciate resolution dated 01.09.2013 is passed by the Company authorizing the Appellant to transact on behalf of the Company.
The CIT(A) failed to appreciate that the ownership of immovable property belongs to the M/s. Golden Star Promoters Pvt Ltd and it merely registered in the name of the Appellant for the sake of convenience.
Without further prejudice, the Appellant prays that directions be given to grant all such relief arising from the grounds of appeal mentioned supra as also all consequential relief thereto.
The Appellant craves leave to add, alter, amend, substitute, rescind, modify and/or withdraw in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal.
The brief facts of the case are that the assessee is a Director of M/s.Golden Star Promoters Private Limited (M/s.GSPL). This Company is into real estate business. During the A.Y.2016-17, the assessee filed her return of income on 25.03.2017 by declaring a total income of Rs.7,22,740/-. Based on verification of registered sale deed dated 05.11.2015 for purchase of property for Rs.8,01,88,500/-, the AO issued a notice u/s.148 of the Act to the assessee and in response the assessee filed the return on 31.07.2021 declaring the same income. On receipt of statutory notices from the AO for reassessment, the assessee submitted that the Company M/s.GSPL had entered into a Memorandum of Understanding with ‘Futura Polyesters Ltd’ for purchase of land and advanced monies over a period of time from May 2013 to Sept 2013. Later, under instructions and based on the specific Board resolution passed by M/s.GSPL, the assessee bought a portion of the land in her name on behalf of the Company. The AO held that since the property is registered in :-4-: ITA. No:523/Chny/2025
the individual Assessee’s name instead of M/s.GSPL, the assessee is required to explain the source of investment and since according to the AO the Assessee has not explained the source and made addition of entire purchase consideration to the tune of Rs.8,01,88,500/- u/s.69 of the Act by passing an order u/s.143(3) r.w.s. 147
r.w.s.144B of the Act dated 28.09.2021. 5. On appeal filed by the assessee against the order of the AO, the ld.CIT(A),
NFAC, Delhi, held that the property was shown under the head current investments in the books of M/s.GSPL but according to him though it is used for business purpose of the said company, but the title to the property is still with the assessee and therefore the assessee can only be considered as owner of the property until it is transferred by her in favour of M/s.GSPL. The ld.CIT(A) also observed that the assessee did not have source to purchase the property. Further, the ld.CIT(A) also observed that the Company has not shown the purchase of property as loan to assessee nor has it paid remuneration to assessee to enable her to purchase the property, as it would have resulted in taxation in the hands of the M/s.GSPL u/s.2(22)(e) or remuneration would be taxed in the hands of the assessee. The ld.CIT(A) also concluded that resolution passed by the company M/s.GSPL cannot override the provisions of the Act and therefore the source of the transaction in the hands of the assessee remains as unexplained investment u/s.69 of the Act and confirmed the addition by passing an order dated 14.10.2024. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us.
Before us the Learned Authorised Representative of the Assessee (ld.AR) contended that the transaction of purchase of the property took place in A.Y.2015-16 as the Sale deed was dated 11.12.2014 and the company M/s.GSPL has also :-5-: ITA. No:523/Chny/2025
recorded the same in its books as investment in A.Y.2015-16. Therefore, it was vehemently contended by Ld.AR that the entire assessment in A.Y.2016-17 is void in law. Further, the Ld.AR pointed out that it is an undisputed fact that company
M/s.GSPL passed a Board resolution authorising the assessee to purchase the property in her name and it is recorded in its books of accounts as investment. In this regard, the Ld.AR has furnished various documents to substantiate the fact that the property was bought and held by the assessee only in a fiduciary capacity and the source of investment is based on the payments made by M/s.GSPL to Futura
Polyesters Ltd. Therefore, it is the contention of the Ld.AR that addition u/s.69 of the Act cannot be made when the source of the investment is overwhelmingly proved.
Further, the ld.AR submitted a paper book of 269 pages containing the details of statutory notices and responses filed before the AO as well as the ld.CIT(A), Return of income filed, Board Resolution of the company, Bank statements of the Company to show that the payments towards consideration for purchase of impugned property made by the Company to the vendor, Audited financials of the Company M/s.GSPL for the financial year ending 31.03.2015, 31.03.2016, MOU between the Company
M/s.GSPL and vendor M/s.Futura Polyster ltd, Sale deed in favour of the assessee,
Sale deed made by the assessee in favour the buyer subsequently on 19.09.2018, etc.
Further, the ld.AR submitted that the assessee had purchased the impugned property on behalf of the company and held it as a custodian and sold as per the instructions of the company during the assessment year 2019-20 and handed over the sale consideration to the Company M/s.GSPL. In support of these transactions the ld.AR submitted all the related documents and stated that both the AO as well as the ld.CIT(A) misunderstood the transactions and brought to tax in the hands of the :-6-: ITA. No:523/Chny/2025
assessee even though entire source had been explained. Hence, prayed for deleting the impugned additions by allowing the appeal of the assessee.
The Ld.DR on the contrary submitted that though the Sale deed is dated 11.12.2014 it was actually registered on 05.11.2015 only in A.Y.2016-17 and therefore the transaction has been rightly dealt with in AY 2016-17. Further, the Ld.DR submitted that since the title of the property was in the name of the assessee it is her duty to explain the source and since the source as explained by the assessee is not acceptable, the addition was rightly made u/s.69 of the Act and confirmed by the ld.CIT(A).
We have considered the rival submissions perused the material available on record and gone through the orders of the lower authorities. There are two main issues to be adjudicated viz., First, the year of the transaction and second, the source of investment by the Assessee for investment in the impugned asset. As far as the first issue is concerned, we have perused various documents filed by the assessee and undisputedly, the Sale deed was executed on 11.12.2014 and presented for registration but the sub-