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Facts
The assessee, a housewife, received a re-assessment notice under Section 148 for Assessment Year 2013-14 concerning an alleged unexplained investment of Rs. 54,00,000/- in an immovable property. She contended that the property, valued at Rs. 1,00,00,000/-, was purchased jointly with her husband, and all funds originated from her husband's income and a bank loan in his name, with supporting documents provided. The Assessing Officer made the addition under Section 69, which the CIT(A) upheld, despite an earlier CIT(A) order deleting a penalty under Section 271F on similar grounds.
Held
The Tribunal found that the source of funds for the property purchase was adequately explained by the husband's bank statements and loan documents. Given that an earlier CIT(A) order had already accepted the husband as the source by deleting a penalty for non-filing of return by the assessee, the Tribunal concluded that no addition could be made in the hands of the assessee.
Key Issues
1. Whether the addition of unexplained investment under Section 69 for a jointly owned property was justified. 2. Whether the source of funds for the property was adequately explained by the assessee's husband.
Sections Cited
147, 144, 148, 69, 139(1), 271F
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Income Tax Appellate Tribunal, ‘C’ BENCH
Before: SHRI AMIT SHUKLA & SMT RENU JAUHRI
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 04/10/2024 passed by NFAC, Delhi for the quantum of assessment passed u/s.147 r.w.s. 144. 2. The assessee in the grounds of appeal has challenged the validity of notice u/s.148 and addition of Rs.54,00,000/- made u/s.69 as unexplained investment.
Pallavi Avadhut Dhage 3. The facts in brief are that assessee is a house wife and she did not have any taxable income and therefore, she was not filing her return of income.
In this case, based on the Non-filers Monitoring System, data available with the ld. AO through ITBA module, ld. AO noticed that assessee had made some transaction of purchase of immovable property for Rs.54,00,000/-. Since assessee had not filed her return of income for A.Y.2013-14, a notice u/s.148 was issued on 09/03/2020. During the course of assessment proceedings in response to one of the notice dated 16/09/2021 assessee stated as under:- “ I am a house wife. There is no income of my own. In the said year my husband had purchase a property. My husband name is AVADHUT DHAGE. His pan card is AFOPD9938F. For the purpose of registering only, the property was registered in joint name. All payment for the property is done by my husband from his own income. I don't have any income and I have not paid for that property. I understand that it is normal for husbands to register property with his wife in joint name."
As regards the earlier notices it has been stated before us that due to Pandemic Covid-19 phase and notices being sent at old address which was rented out and she was not informed therefore, earlier notices could not be complied with. Despite assessee has given the information that property was purchased by her husband Shri Avadhut Dhage from his own source and Pallavi Avadhut Dhage also gave his PAN, the ld. AO proceeded to make the addition of Rs.54,00,000/- in the hands of the assessee.
Before the ld. CIT(A), assessee pointed out that her husband, Shri Avadhut Dhage had purchased a property valued at Rs.1,00,00,000/- and not Rs.54,00,000/- as mentioned in the assessment order and the said property was in the joint name of her husband, Shri Avadhut Dhage and assessee herself, Mrs. Pallavi Avadhut Dhage. Copy of sale deed was also filed before the ld. CIT (A) wherein the property has been purchased under the joint name for sum of Rs.1,00,00,000/- and in the sale deed the details of cheque numbers were mentioned stating that Rs.40,00,000/- had come from assessee’s husband, Shri Avadhut Dhage and balance Rs.60,00,000/- was out of loan taken from HDFC bank. All these details alongwith bank statements of Shri Avadhut Dhage was filed before the ld. CIT(A). However, the ld. CIT (A) without even examining these documents and despite noting all these details in his order has rejected the assessee’s contention holding as under:- “7. I have perused facts of the case Assessment order of the AO submission of the appellant and the documents available on record. On perusal of the record it is seen that the only addition made is in respect unexplained investment in the purchase of immoveable property in joint name, and 50% of the total investment has been treated as unexplained investment being the share of the appellant. The documents filed with the submission are not verifiable. Nothing has been brought on record to show that the joint holder of the property's return was subjected to scrutiny or not and whether the investment has wholly been owned up by the other joint holder In absence of this basic information, the submissions of the appellant remain mere Pallavi Avadhut Dhage assertions and can not take the shape of documentary evidence In view of the above discussion, I am of the considered opinion that the AO has rightly made the addition of Rs.54,00,000/- being the unexplained investment in the purchase of property. Accordingly this ground of appeal is rejected and the appeal is dismissed.”
7. After hearing both the parties and on perusal of the material placed on record, it is seen that the entire basis for issuing notice u/s.148 that assessee had purchased an immovable property for Rs.54,00,000/-. First of all there was no such property purchased for Rs.54,00,000/-, albeit, assessee had purchased one property for Rs.1,00,00,000/- under the joint name of her husband Shri Avadhut Dhage and herself and in the said sale deed it was clearly mentioned that the flat was purchased for a price of Rs.1,00,00,000/- and three cheques were given from that bank account of Shri Avadhut Dhage wherein details of cheques were mentioned and also sum of Rs.60,00,000/- which was received from HDFC bank through house loan through cheque dated 08/01/2013 of Rs.60,00,000/- The details of funding done by her husband Shri Avadhut Dhage as stated before CIT(A) is as under:- Total Property Price - RS. 1,00,00,000/- • Funded by Avadhut Dhage (PAN No AFOPD9938F) - Rs. 40,000,00 – (as per details below) towards Part Payment of the Property. • Funded by HDFC BANK as House Property Loan in the name of Avadhut Dhage (PAN No AFOPD9938F) - Rs.60,000,00.00 - with loan disbursement cheque details showing beneficiary as Sonu Surjit Singh Vasan - Seller.
Pallavi Avadhut Dhage The Part Payment of the Property has been paid by Mr. Avadhut Dhage (PAN No -AFOPD9938F) as follows: Date Bank Branch First Cheque Amount To Annexure Holder Number (Rs.) wards 12/11/2012 HDFC Mohamed Avadhut 491509 51,000/- Sonu Bank All Road Dhage Surjit Statement Singh -Annexure Vasan 4 15/11/2012 HDFC Mohamed Avadhut 491510 25,00,000/- Sonu Bank Ali Road Dhage Surjit Statement Singh -Annexure Vasan 4 26/1 1/2012 HDFC Mohamed Avadhut 491513 14,49,000/- Sonu Bank Ali Road Dhage Surjit Statement Singh -Annexure Vasan 4 Total 40,000,00/-
It was further submitted before the ld. CIT (A) that all these funding have been done by her husband and also given his PAN number and the details of his return of income filed on 28/07/2013 for the A.Y.2013-14. The said return of income was also enclosed before the ld. CIT (A). Another important fact which has been pointed out that ld. AO had levied penalty u/s.271F for non-filing of return of income and in the first appeal ld. CIT(A) has deleted the penalty after observing as under:- “I have perused the records and all other related information and found that the contention of the appellant is true, and that the purchased property in contention was done by Mr. Avadhut Dhage, the husband of the appellant For the year under Pallavi Avadhut Dhage consideration, the appellant is not liable to file income tax return u/s 139(1) of the Income Tax Act, 1961 since she did not have any taxable income. Hence, the question of imposition of penalty u/s.271F do not arise.
Thus, once ld. CIT(A) vide order dated 29/04/2022 has deleted the penalty holding that purchase property and contention was done by Shri Avadhut Dhage, the husband of the assessee, therefore, she was not required to file the return of income; and on the other hand, another CIT(A) vide order dated 14/10/2024 has rejected the contention despite noting this fact at page 5 of the order that earlier ld. CIT(A) has made categorical observation by deleting the penalty u/s.271F. Once all these details were furnished and the source of funds for purchase of the property has been explained in the hands of her husband Shri Avadhut Dhage which is clearly borne out from his bank statement placed in the paper book before us at page 17 and also cheque from HDFC outsourcing home loan in the name of Shri Avadhut Dhage, then, we do not find any reason as to why any kind of an addition can be made in the hands of the assessee. Accordingly, the addition made by the ld. AO and as confirmed by the ld. CIT(A) is deleted.
In the result, appeal of the assessee is allowed.
Order pronounced on 7th January, 2025.