SELLAMUTHU JYOTHI,KARUR vs. ITO, WARD-1,, KARUR

Brief facts are as under: The case of the assessee was reopened vide notice u/s 148 dated 31.03.2019 for AY 2012-13 for the reason that the assessee has purchased an immovable property for a consideration of Rs.2,61,51,311/- and the same has been registered on 10.06.2011 vide document No.1520/2011. The assessee filed return of her income pursuant to the notice u/s 148 of the Act only declaring total income at Rs.44,910/- u/s 44AD of the Act which was treated by the AO as invalid. During the course of the assessment proceedings assessee submitted computation of income, P&L A/c, Capital A/c, Balance Sheet and copy of the purchase deed in regional language and in English also. However, the AO made an addition of Rs.6,87,612/- on account of non-furnishing of source of investment made in the property to the tune of Rs.6,87,612/- being ‘Land and Improvement’ @ Chita Cottage @ Kodaikanal, D.No.1520/201-(2.60%). The ld. CIT(A) upheld the order of the AO on merits. Now, assessee is in further appeal before us.

We have gone through the orders of lower authorities and submissions addressed by the parties before us. Before us the ld. Counsel for the assessee filed cash flow statement for the FY 2011-12. Having perused the cash flow statement, we find that the assessee has total receipts including opening cash balance of Rs.9,22,585/- as on 01.04.2022 was Rs.14,86,418/- and total payments were Rs.8,55,649/- which includes Rs.6,87,612/- as Land & Improvement. The assessee had sufficient cash balance as on 01.04.2011. Therefore, we are of the considered view that the assessee has successfully explained the source of expenses relating to the Land and Improvement. Hence, we delete the addition of Rs.6,87,612/- made by the AO. Since, we have allowed the appeal of the assessee, hence we do not dwelled upon the legal grounds raised and the same are infructuous.