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Facts
The assessee jointly purchased a residential flat with her husband. The Assessing Officer (AO) made an addition for the difference between the property purchase value and the loan amount, treating it as unexplained income. The CIT(A) confirmed the addition.
Held
The Tribunal held that the assessee had provided sufficient evidence to explain the source of her share of investment in the property. The AO had ignored the fact that the assessee was a co-owner and had treated her as the sole owner.
Key Issues
Whether the addition made by the AO for the unexplained investment in the property is justified, considering the assessee's co-ownership and explained sources for her share.
Sections Cited
250, 147, 144, 149(1)(b), 148A, 151, 69, 115BBE, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2018-19 Mrs. Snehal Sameer Bhujbal, V The Income Tax Officer, Sanswadi, Nagar Road, s Ward-13(2), Pune. Pune – 412208. Maharashtra. PAN: BLCPB5495C Appellant/ Assessee Respondent / Revenue Assessee by Shri Bhuvanesh Kankani – AR Revenue by Shri Sandeep P Sathe – JCIT(DR) Date of hearing 17/07/2025 Date of pronouncement 21/07/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC],passed under section 250 of the Income Tax Act, 1961 for the A.Y.2018-19 dated 16.05.2025, emanating from order u/s.147 r.w.s 144 of the Income Tax Act, 1961, dated 19.01.2024. The Assessee has raised following grounds of appeal :
1. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') it be held that the addition of Rs. Rs.23,00,771/- so made by Ld. AO and that upheld by Ld. CIT(A), NFAC is incorrect and not in accordance with the provisions of the Act. Accordingly, the addition so made be kindly deleted and Appellant be granted just and proper relief in this respect.
2. Without prejudice to other grounds and on the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') it be held that the case so re- opened is against the provisions of section 149(1)(b) of the Act since the income alleged to have been escaped from assessment is below Rs.50,00,000/-. Accordingly, the assessment proceedings so initiated and completed be kindly quashed and Appellant be granted just and proper relief in this respect.
3. Without prejudice to other grounds and on the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') it be held that the dismissal of appeal by Ld. CIT(A) is against the principle of natural justice and also against the provisions of the Act. Accordingly, the order u/s 250 of the Act dismissing the Appeal be kindly set aside and Appellant be granted just and proper relief in this respect.
4. On the facts and circumstances prevailing in the case and as per provisions and scheme of the Income-tax Act, 1961 ('the Act') Appellant be kindly allowed to produce additional evidence, if required, in the interest of justice.
5. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
Additional Ground of Appeal : “On the facts and circumstance prevailing in the case and as per provisions and scheme of the Act it be kindly held that Assessment Proceedings so initiated u/s 147 of the Act on the basis of proceedings u/s 148A of the Act are invalid since the same are initiated on the basis of incorrect information and by non-application of mind by the Ld.AO and even by the approving authority u/s 151 of the Act. Further, approving authority has mechanically and without even checking the case record has granted approval u/s 151 of the Act. Thus, the Assessment Proceedings so initiated be kindly held to be invalid and be kindly quashed.”
Submission of ld.AR : 2. Shri Bhuvanesh Kankani – Advocate appeared for the Assessee. He filed Vakaltnama duly signed. Ld.AR vehemently argued the case on legal grounds and merits. Ld.AR filed a written submission during the proceedings which are reproduced as under : “Written Synopsis of the case A. Facts in brief
1. Appellant along with her husband purchased residential flat for Rs.1,40,30,100/- plus stamp duty & reg. exp of Rs.8,74,100/-, totalling to Rs. 1,49,04,200/- in the year under consideration.
2. Case was re-opened in the amended provisions of sec. 147 r.w.s 148A of the Act on the ground that Appellant has purchased properties worth Rs. 2,10,45,150/- (please refer pg. no 25-29 of paper book which contains notice u/s 148A(b) of the Act).
During the course of Assessment, Appellant submitted the fact to the Ld. FAO that she is a joint owner and property has been brought using loan funds. Appellant also submitted the property purchase deed and loan document (Please refer pg. no 2-5 of paper book).
4. Ld. FAO made the addition of Rs.23,00,771/-, being the difference between total property purchase value and loan amount of Rs.1,26,01,329/-.
Before CIT(A):
Appellant along with form 35, submitted the facts of the case and the supporting evidences to proove that to the extent of ownership of Appellant (i.e., 50%) loan funds were used and remaining amount, over and above the loan amount, was paid by her Husband's sources and Savings.
6. However, Ld. CIT(A) without perusing the documents filed with him dismissing the appeal on ground that Appellant did not respond to the notices issued by him.
B. Our Submission before your Honour's:
Firstly, on Merits
1. It is an undisputed fact that Appellant is a joint owner of the property, even the Ld. AO has stated this fact in Assessment Order (para no. VI at page no.6 of the Assessment order).
2. Accordingly, Appellant is to be treated as only 50% owner of the property i.e.. for Rs. 74,52,100, being 50% of 1,49,04,200/-. And accordingly, Appellant is liable to proove source only upto her share i.e., of Rs. 74,52,100/-
3. Appellant during the course of Assessment proceedings and even before Ld.. CIT(A) has proved with evidence (loan sanction letter- pg. no 8 of paper book) her source relating to her share in the property.
4. However, Ld. AO and Ld. CIT(A) has totally ignored the basic fact that Appellant is a co-owner in the property and treated her to be 100% owner and made the addition.
5. Further, for sake of your honour's verification, the fact that balance amount was paid by Appellants husband's sources is also submitted herewith, please refer to page no. 1 of paper book, which is chart of source of money please refer to page no. 9-21 which are bank statements demonstrating that balance money has been paid using the sources of Appellants husband.
(Please note: bank statements of husband are submitted herewith to simply reassure Your Honour's that Appellant had rightly proove her part of source which was loan only. These bank statements are not additional evidences, rather these are documents to further proove that evidences submitted earlier by Appellant were complete and sufficient to proove the source of Appellant's part of ownership).
6. In view of above, it is humbly submitted that the addition of Rs.23,00,771/-so made in the hands of Appellant is totally incorrect and same deserves to be deleted in the interest of justice.
Our Submission on legality of re-opening (non-application of mind/ mechanical approval)
1. Since, this ground was not directly raised in form no. 36, an additional ground of appeal on this aspect has been raised.
2. At page no. 26 to 34 of the paper book, is the notice issued u/s 148A(b), order passed u/s 148A(d) and sanction u/s 151 of the Act.
3. It can be observed from these documents that, Ld. AO has sought to initiate proceedings on the information that Appellant has purchased property worth Rs. 2,10,45,150/-, the bifurcation of which is as under [reproduced from 148A(b)).
Information Description Amount code TDS- TDS Statement – Payment for purchase 14030100 194IA(P) of immovable property (Section 194IA) SFT-012(B) Purchase by any person of immovable 7015050 property 21045150/-
It can be apparently observed that, the information shared with the AO is from SFT data and another from TDS data. And since Appellant is co-owner, SFT information has provided 50% part of Appellants ownership. That is to say, both the information lines are pertaining to one and same transaction.
5. Had the Ld. AO applied his independent mind before merely copying the information received by him, he could have understood that the information received is nothing but triplication of the actual amounts.
Moreover, the approval has been granted by Ld. Pr. CCIT, and while granting the approval Ld. Pr. CCIT has also not observed this very apparent error and has granted the approval. Had the approving authority verified the file/ case records just once, he could have easily understood the factual error and asked the Ld. AO to get the correction and seek fresh approval.
7. However, it appears that none of the authorities, neither the Ld. AO nor the Ld. Pr. CCIT nor the authorities through whom case file would have been passed, has applied their mind.
8. In similar scenario, where sanctioning authorities have not applied their minds, Hon'ble Bombay High Court, in following cases, has quashed the notices issued u/s 148 of the Act a. Teleperformance Global Service (P.) Ltd Vs. ACIT [2024] 161 taxmann.com 258 (Bombay)
In this case, the quantum of income escaped assessment was different in approval form and draft order. Revenue explained it to be a typographical error. However, Hon'ble Court held that none of the authorities have bothered to read the request of approval and had they done so, such discrepancy would have been certainly noticed and would have refused the request of approval. Resultantly, 148A(d) and 148 quashed. (para 7 of the order)
Further, Your Honour's, this decision has been affirmed by Hon'ble Supreme Court by dismissing the SLP also by observing that 'we see no reason to interfere with the impugned order passed by the High Court'].
Ld.AR for the assessee relied on following case laws :
1. Teleperformance Global Servic (P.) Ltd. Vs. ACIT [2024] 161 taxmann.com 258 (Bombay)
Kartik Sureshchandra Gandhi Vs. ACIT [2023] 154 taxmann.com 193 (Bombay)
3. Bhavesh Maganlal Dhaord Vs. ITO [2023] 155 taxmann.com 335 (Bombay) - Delhi ITAT Submission of ld.DR: 3. The ld.DR for the Revenue relied on the order of the Assessing Officer(AO) and ld.CIT(A). Ld.DR filed copies of the documents generated on the ITBA to demonstrate the flow of approval issued by Competent Authority.
Findings & Analysis : 4. We have heard both the parties and perused the record placed before us. In this case, Assessee had not filed Return of Income for A.Y.2018-19. Therefore, Assessing Officer-ITO, Ward-13(2), Pune issued a notice u/s.148A(b) of the Act, for A.Y.2018-19 on 19.12.2022, based on the information received on “Insight Portal” of the Income Tax Department. The Screenshot of the said information of the Insight Portal is as under :
5. The Assessee failed to file any reply in response to notice u/s.148A(b) of the Act. The Assessing Officer-ITO, Ward-13(2), Pune passed an order u/s.148A(d) of the Act, on 30.01.2023 for A.Y.2018-19 with the approval of Principal Chief Commissioner of Income Tax, Pune. The final paragraph 5 of the said order is reproduced here as under : “5. Findings of the AO:- As the assessee has failed to furnish any explanation/submission, it appears that the assessee has nothing to explain in this matter. Hence, sources of investment in purchase of immovable property of Rs.21045150/-, which is more than Rs.50 lakhs and represented in the form of asset remains unexplained and has thus escaped assessment within themeaning of section 147 of the I.T.Act, 1961. In view of these facts, the undersigned is of the opinion that this is a fit case for issue of notice u/s 148 of the Income Tax Act, 1961.”
5.1 Then, the Assessing Officer issued a notice u/s.148 of the Act, dated 30.01.2023 for A.Y.2018-19. The Assessee filed a Return of Income in response to notice u/s.148 of the Act, on 13.02.2023 declaring total income at Rs.120/-. During the re-assessment proceedings, assessee filed submission along with the copies of the relevant bank statements and loan documents. The Assessing Officer noted in the assessment order that assessee along with her husband i.e.Sameer Bhujbal had jointly purchased Flat No.A-1103 in Tuscan Estate for a consideration of Rs.1,40,30,100/- on which Stamp Duty of Rs.8,42,000/- and registration charges of Rs.30,000/- have been paid by the assessee. In the assessment order, Assessing Officer has also noted that “Assessee has financed amount of Rs.1,26,01,329/- for purchase of Flat No.A-1103 on 11th Floor at Tuscan Estate by borrowing loan from “India Bulls Housing Finance Ltd. It is also noted by the Assessing Officer that account statement of India Bulls Housing Finance Limited was duly submitted.
However, in the assessment order in the concluding paragraph, Assessing Officer has mentioned as under : “In the instant case the assessee has made investment in immovable property amounting to Rs.1,40,30,100/- during the financial year 2017- 18 out of which Rs.1,26,01,329/- was fianced through India Bulls Housing Finance Ltd. The Assessee has failed to furnish the source of balance investment amounting to Rs.23,00,771/-. Therefore, the unexplained investments amounting to Rs.23,00,771/- is treated as deemed income of the assessee for the F.Y.2017-18 as per provision of section 69 of the Act and is subjected to tax as per provisions of section 115BBE of the Act.
6. Aggrieved by the assessment order, Assessee has filed appeal before the ld.CIT(A). Assessee has made an elaborate submission before ld.CIT(A). However, ld.CIT(A) confirmed the addition.
6.1 In this case, the ld.AR for the Assessee also filed copy of the impugned aggrement for sale dated 16.01.2018 which is between Tuscan Real Estate Private Limtied and Mrs.Snehal Samir Bhujbal along with Mr.Samir Uttam Bhujbal. In the agreement, PAN numbers of both these Individuals have been mentioned. This fact is also recorded in the assessment order by the Assessing Officer. Thus, admittedly, the impugned Flat No.A-1103 has been jointly purchased by two individuals i.e.Mrs.Snehal Samir Bhujbal along with Mr.Samir Uttam Bhujbal. Therefore, when the specific share is not mentioned, it is presumed that each one has 50% share in the property. Thereofre, Assessee’s share of investment would have been 50% of the total sale consideration. The Assessing Officer in the assessment order has mentioned that total amount including Stamp Duty and Registration Charges was Rs.1,49,02,100/-. Since assessee is 50% owner of the impugned Flat, Assessee’s share in the investment would have been Rs.74,51,050/-. Assessing Officer in the assessmetn order has admitted that Assessee has obtained Loan of Rs.1,26,01,329/- from India Bulls Housing Finance Ltd. Therefore, Assessee had explained the source of investment qua Rs.74,51,050/-. Hence, there was no reason for the Assessing Officer to make an addition u/s.69 of the Act.
6.2 However, the Assessee Mrs.Snehal Bhujbal had explained the source of entire amounts. The Chart filed is reproduced here as under : Housing loan from Indiabulls Housing Rs.1,22,30,100 Copy of loan document at Finance Ltd S.No.4 of paper book Amount paid by Mr.Sameer Bhujbal Rs.18,00,000 Bank statement & ITR Ack. (Husband of Appellant) of Assessee’s Spouse at S.No.7 and 8 of paper book. Amount paid by Mrs.Snehal Bhujbal – Rs.8,74,300 Bank statement of Appellant (Appellant) which is sourced from and Husband of Appellant is Husband at S.No.5 and 6 of paper book Total Rs.1,49,04,400
As far as the amount of Rs.18,00,000/- is concerned, the said amount is also appearing in Schedule-3 of the impugned agreement wherein, Cheque Number, Name of the Bank, date of the cheque is clearly mentioned. Thus, had the Assessing Officer read the agreement for sale carefully, along with the copies of the bank statement, Assessing Officer would have easily understood the source of investments and would have understood that there was no need to make any addition u/s.69 of the Act. Ld.DR for the Revenue has not raised any objection qua any submission of the ld.AR for the Assessee.
7.1 In these facts and circumstances of the case, for all the reasons discussed above, we are convinced that Assessee had explained the soruce of investments. Accordingly, Assessing Officer is directed to delete the addition of Rs.23,00,771/- made u/s.69 of the Act. Accordingly, Ground No.1 of the Assessee is allowed.
7.2 It was observed that in the order u/s.148A(d), the Assessing Officer has stated that Investment in Purchase of Immovable Property of Rs.2,10,45,150/- represented in the form of Asset remains unexplained and has escaped assessment within the meaning of Section 147 of the Act. The said order u/s.148A(d) has been approved by ld.Pr.CCIT, Pune. We have already reproduced the Screenshot of the Insight Portal of Income Tax Department for ready reference. Thus, Assessing Officer has merely totalled the figures appearing in the Insight Portal without application of mind. Had the Assessing Officer analyzed the information appearing in the Insight Portal, he would have understood easily that same information has been uploaded by two different sources i.e.1) from the TDS and 2) from SFT. Unfortunately, Assessing Officer had no time to analyze these basic facts. Had the Assessing Officer obtained the copy of the impugned purchase agreement from the Sub-Registrar concerned, who has uploaded information, Assessing Officer would have easily understood that the impugned property is in the name of two individuals.
Since we have elaborately discussed the Ground No.1 raised by the Assessee regarding merits of the addition and allowed it, hence, we leave remainig all legal ground open. Accordingly, Ground Nos.2, 3, 4, 5 and Additional Ground are dismissed as unadjudicated.
In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 21 July, 2025.