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Facts
The assessee, a salaried doctor, was subjected to scrutiny assessment for AY 2016-17 concerning property investment. The Assessing Officer made additions for a difference in property value under Section 56(2)(vii)(b) and for unexplained investment under Section 69. The CIT(A) partly reduced the addition under Section 56(2)(vii)(b) and confirmed a portion of the unexplained investment under Section 69 for payments made in FY 2015-16, leading the assessee to appeal before the ITAT.
Held
The Tribunal found that the assessee had explained the source of funds for the property purchase and registration charges from her salary account, supported by bank statements and details of payments through banking channels. Concluding that the source of investment was established, the Tribunal directed the deletion of both additions made by the lower authorities.
Key Issues
Whether the additions under Section 56(2)(vii)(b) for difference in property value and Section 69 for unexplained investment were justified when the assessee provided bank statements to explain the source of funds from her salary account.
Sections Cited
142(2), 142(1), 271(1)(b), 143(3), 56(2)(vii)(b), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2016-2017 Nibedita Deb Barma,……………….…………..…Appellant 30/7B, Doctor Lane, Taltala, Kolkata-700014 [PAN:ADIPD1863D] -Vs.- Income Tax Officer,…………………..…………..Respondent Ward-60(2), Kolkata, 169, A.J.C. Bose Road, Bamboo Villa, Kolkata-700014 Appearances by: Shri Ankit Jalan, A.R., appeared on behalf of the assessee Shri Susanta Saha, Sr. D.R., Addl. CIT, appeared on behalf of the Revenue Date of concluding the hearing: June 25, 2025 Date of pronouncing the order: August 27, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Additional/ Joint Commissioner of Income Tax (Appeals)-11, Delhi dated 24.01.2025 passed for Assessment Year 2016-2017.
Brief facts of the case are that the assessee is an individual and salaried Doctor, who filed her original return of income in ITR 2 for the assessment year 2016-17 on 15.07.2016 declaring total (A.Y. 2016-2017) Nibedita Deb Barma income of Rs.15,48,730/-. Subsequently the case was selected for scrutiny through CASS under limited category on the issue of ‘whether the investment and income relating to properties are duly disclosed’. Thereafter, notice under section 142(2) of the Act was issued on 03.07.2017 and duly served on the assesese through system. Notice under section 142(1) dated 22.06.2018 along with questionnaire was also served on the asseessee. In the notice, the assessee was asked to furnish the copy of Conveyance Deed, if any, made during the FY 2015-16 and in response thereto, the assessee replied that she had not purchased any property during FY 2015- 16 relating to assessment year 2016-17. The assessee was asked to furnish the complete details of information sought under section 142(1) notice but the asseessee did not bother to furnish the requisite details of information. Thereafter, a show-cause notice under section 271(1)(b) was initiated against the assessee regarding the source of investment in the property. Getting no satisfactory reply from the side of assessee, the taxable income of the assessee was assessed by the ld. Assessing Officer under section 143(3) at Rs.34,83,880/-. The additions to the returned income were made on two points, i.e. (i) difference of Rs.8,14,164/- between consideration value and value for the purpose of stamp duty subject to the findings of the DVO and (ii) the source of investment to the tune of Rs.11,20,984/- being unexplained.
Being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. Addl./JCIT(Appeals) firstly reduced the addition under section 56(2)(vii)(b) from Rs.8,14,164/- as made by the ld. Assessing Officer in the assessment order to Rs.1,23,156/- (A.Y. 2016-2017) Nibedita Deb Barma , mentioning in his appellate order that the difference between the set forth value and the market value for stamp duty purposes was lower than initially estimated, therefore, the difference of Rs.1,23,156/- remained the taxable amount under section 56(2)(vii)(b). Ld. Addl./JCIT(Appeals) was of the view that the provision explicitly states that where the stamp duty value of a property exceeds the consideration paid by the purchaser and the difference exceeds Rs.50,000/-, the excess amount shall be deemed as income in the hands of purchaser under the head “income from other sources”, therefore, made the addition of Rs.1,23,156/- in the hands of assessee instead of Rs.8,14,164/-.
3.1. Regarding the addition for unexplained investment made under section 69 of the Act to the tune of Rs.11,20,984/-, the ld. Addl./JCIT(Appeals) observed that payment for the property amounting to Rs.6,17,494/- was made in FY 2011-12 by the assessee and the balance amount of Rs.5,03,490/- was paid for the property in FY 2015-16. The ld. Addl./JCIT(Appeals) was of the view that since section 69 applies only to investments made in the financial year immediately preceding the relevant assessment year, the payments made in FY 2011-12 cannot be taxed under this Section. However, the payments made in FY 2015-16 remained unexplained, as the assessee failed to conclusively establish the sources and not submitting the bank statements during appellate proceedings, the addition be made under section 69 to the tune of Rs.5,03,490/- as unexplained investment.
(A.Y. 2016-2017) Nibedita Deb Barma 3.2. Resultantly, the ld. Addl./JCIT(Appeals) partly allowed the appeal of the assessee being addition made to Rs.1,23,156/- under section 56(2)(vii)(b) of the Act and unexplained payment made by the assessee to Rs.5,03,490/- during FY 2015-16 relevant to the AY 2016-17 to the taxable income of the assessee.
On being aggrieved, the assessee preferred an appeal before the ITAT on the following ground:- (1) For that on the facts and in the circumstances of the case, the Ld. CIT(A) is wrong and unjustified in confirming the addition to Rs.5,03,490/- made by the Ld. A.O. invoking the provision of section 69 of the Income Tax Act, 1961, in light of rule 46A treating the submission of the appellant as additional evidences whereas the relevant documents were submitted before the Ld. A.O. at the time of assessment proceedings. Relief Claimed: the addition of Rs.5,03,490/- should be deleted. (2) For that on the facts and in the circumstances of the case, the Ld. CIT(A) is wrong and unjustified in confirming the addition to Rs.5,03,490/- made by the Ld. A.O. invoking the provision of section 69 of the Income Tax Act, 1961, whereas the appellant had explained the source of investment made during the year. Relief Claimed: the addition of Rs.5,03,490 should be deleted. (3) For that on the facts and in the circumstances of the case, the Ld. CIT(A) was vehemently wrong and unjustified in confirming the addition made by the Id. A.O. amounting to Rs. 1,23,156/- invoking the provision of section 56(2)(vii)(b) of the Income Tax Act, 1961 even though the same is not applicable in the present case. Relief claimed: the addition of Rs. 1,23,156/- is unjustified and is liable to be deleted.
(A.Y. 2016-2017) Nibedita Deb Barma 5. I heard both the sides. It was the submission of the ld. Counsel for the assessee that the ld. Addl./JCIT(Appeals) has confirmed the additions made by the ld. Assessing Officer for an amount of Rs.5,03,490/- and Rs.1,23,156/- saying that the assessee has not explained the source for payments made for the property. He further submitted that the assessee has filed additional evidence before the ld. Addl./JCIT(Appeals) as per Rule 46A of the Income Tax Rules, 1962. Since the assessee failed to produce the said additional evidence before the assessment proceedings but the ld. Addl./JCIT(Appeals) has ignored the additional evidence filed by the assessee saying that it was not filed according to the Rules. The additional evidence filed by the assessee is only Bank statement, which clearly establishes the source for payment of purchase of the property. He further submitted that he also filed paper book before the ITAT showing the source for the payment made for the property. Therefore, he pleaded to set aside the orders passed by the lower authorities and delete the additions made by the ld. Addl./JCIT(Appeals).
On the other hand, the ld. Departmental Representative submits that since the assessee failed to establish the source for payment of the purchase of property with documentary evidences, the ld. Addl./JCIT(Appeals) confirmed the additions made by the ld. Assessing Officer. Therefore, he pleaded to confirm the orders passed by the lower authorities.
I have perused the material available on record. So far as the addition of Rs.5,03,490/- is concerned, the contention of the ld. (A.Y. 2016-2017) Nibedita Deb Barma Counsel for the assessee is that the source for the said amount is from her salary account and she has placed the Bank Statement of the salary account by way of paper book in page no. 4, Column no.
Upon perusal of the Bank Statement, it is clear that the assessee made the payment through banking channel and also the assessee paid for registration charges through banking channel for an amount of Rs.2,25,244/-. The said details also placed by way of paper book at page no. 8, where it clearly shows the issuance of Demand Draft. The assessee’s Bank statement clearly establishes the cash withdrawals from the Bank account. Therefore, considering the facts and circumstances of the case and entries made in the Pass Book are crystal clear that the assessee has paid the amount through Bank from her salaried account. Therefore, I have no hesitation to come to the conclusion that the assessee has explained the source for payment of purchase of property and payment of registration charges. Therefore, I am of the confirmed view that she has established the source for purchase of property. Hence, the grounds raised by the assessee are allowed. The ld. Assessing Officer is directed to delete the additions of Rs.5,03,490/- and Rs.1,23,156/-.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 27/08/2025.