ABDUL SALAM SHAIK,PILER vs. INCOME TAX OFFICER, WARD-1(1), TIRUPATI

The assessee has raised the following grounds of appeal: 1. The learned Commissioner of Income Tax (Appeals), NFAC, Delhi has erred in law and on facts in upholding the assessment order passed u/s 143(3) of the Income Tax Act, 1961, wherein the Assessing Officer made an addition of 21,02,28,860/- under section 69 treating the investment in immovable property as unexplained. 2. The learned authorities below failed to appreciate that the entire investment in the Bangalore property was made out of identifiable and explained sources, duly supported by sale deeds, registered documents, bank statements, loan documents, confirmations, and returns of income filed by the assessee and his family members. 3. The learned CIT(A) erred in not considering the detailed evidences of sources, including: a) Sale proceeds of immovable properties in the name of the assesse amounting to Rs. 5,05,000/-and his wife's name Rs. 25,63,000/-: b) Mortgage loan of ₹15,00,000/- obtained from Andhra Bank against deposit of title deeds; c) Loans received from relatives and friends duly routed through banking channels of Rs.7,50,000/- from Subhan Basha and NRE account transfers from Shri S. Khadar Basha of Rs.35,00,000/-; and d) Sale consideration of vehicle amounting to Rs. 3,28,000/- duly evidenced. e) Balance from accumulated savings of the appellant and his family members 4. The learned authorities erred in rejecting the evidences merely on technical grounds such as absence of loan sanction letters or immediate bank deposits, ignoring that confirmations, bank records, and supporting documents were furnished, thereby discharging the assessee's burden under sections 68 and 69 of the Act. 5. The learned CIT(A) erred in sustaining the additions without affording proper and adequate opportunity to the assessee, despite specific requests for time to furnish further documentary evidences, which is a violation of principles of natural justice. 6. The impugned addition is based on surmises and conjectures and not on any incriminating material or independent enquiry by the Assessing Officer. The rejection of genuine sale deeds, registered loan documents, and bank statements is arbitrary, unjustified, and contrary to settled judicial precedents. 7. The learned authorities failed to appreciate that once the identity of the lender, genuineness of the transaction, and Abdul Salam Shaik vs. ITO Page 3 of 18

The brief facts of the case are that the assessee is an individual who filed the return of income for Assessment Year 2017–18 on 09.03.2018 admitting total income of Rs.3,13,820/-. The case of the assessee was selected for limited scrutiny under CASS to verify the issues relating to (i) cash deposit and transaction in property and (ii) investment in immovable property. Accordingly, notices under section 143(2) as well as under section 142(1) of the Income Tax Act, 1961 (“the Act”) were issued by the Learned Assessing Officer (“Ld. AO”) to the assessee. During the course of assessment proceedings, the Ld. AO observed that the assessee had deposited cash of Rs.33,61,000/- in the State Bank of India and Rs.28,65,000/- in HDFC Bank. Thus, according to the Ld. AO, the assessee had deposited total cash of Rs.62,26,000/- in the bank accounts during the year under consideration. The Ld. AO further observed that the assessee had purchased a house property at Bangalore during the year for a consideration of Rs.1,05,05,000/- and had also paid stamp duty of Rs.6,93,860/-, aggregating to Rs.1,11,98,860/-. The assessee was therefore called upon to explain the source of the said investment. Not being satisfied with the explanation offered by the assessee, the Ld. AO treated the entire investment of Rs.1,11,98,860/- as unexplained investment and added the same to the income of the assessee. Accordingly, the assessment was completed by Ld. AO under section 143(3) of the Act on 03.12.2019 determining the total income of the assessee at Rs.1,15,12,680/-. 4. Aggrieved by the order of Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee, granted partial relief. 5. Against the order of the Ld. CIT(A), the assessee is now in appeal before this Tribunal. At the outset, the Learned Authorised Representative (“Ld. AR”) submitted that the Ld. AO has subsequently passed an order giving effect to the order of the Ld. CIT(A) under section 250 read with section 143(3) of the Act dated 29.07.2025 whereby an addition of Rs.9,70,000/- has been deleted. Accordingly, the issue that survives for adjudication before the Tribunal relates to the balance addition of Rs.1,02,28,860/-. The Ld. AR further submitted that the assessee had explained the entire source of investment in the house property before the lower authorities with supporting documentary evidence placed in the paper book. With regard to the sources of investment, the Ld. AR submitted that part of the investment was sourced from sale of land belonging to the wife of the assessee. It was submitted that the wife of the assessee had sold two parcels of land for Rs.10,13,000/- and Rs.15,50,000/- on 13.10.2016 and 15.11.2016 respectively and the amounts received from such transactions were utilised towards the investment in the house property. The relevant portion of the written submission of the assessee in this regard is reproduced as under: The Ld. AR further submitted that the assessee had obtained a housing loan of Rs.15,00,000/- from Andhra Bank on 30.11.2016 and the said loan was also utilised for the purchase of the property. The relevant portion of the written submission of the assessee in this regard is reproduced as under: The Ld. AR further submitted that the assessee had received a loan of Rs.35,00,000/- from one Mr. Khader Basha. In support of the said transaction, the assessee has placed on record the bank statement of the said person showing withdrawals corresponding to deposits in the bank account of the assessee along with confirmation letter and copy of passport of the lender. The relevant portion of the written submission of the assessee in this regard is reproduced as under: The Ld. AR further submitted that the assessee had sold a motor car during the year for Rs.3,28,050/- which amount was also utilised towards the investment. The relevant portion of the written submission of the assessee in this regard is reproduced as under: It was also submitted that the assessee had received a loan of Rs.7,00,000/- from his brother-in-law Mr. Suban Basha and copies of income tax return acknowledgements of the said person have been placed on record. The relevant portion of the written submission of the assessee in this regard is reproduced as under: 6. Per contra, the Learned Departmental Representative (“Ld. DR”) supported the orders of the lower authorities and submitted that the assessee had failed to substantiate the sources of the investment with reliable documentary evidence. The Ld. DR submitted that the explanations offered by the assessee regarding the loans and cash receipts were not supported by sufficient evidence establishing the genuineness of the transactions and the creditworthiness of the persons from whom the amounts were stated to have been received. The Ld. DR therefore prayed that the order of the Ld. CIT(A) be sustained. 7. We have heard the rival submissions and perused the material available on record including the documents placed in the paper book. From the material available on record (page nos. 118 to 131 of the paper book), it is observed that the assessee had purchased a residential property on 09.12.2016 for a total cost of Rs.1,11,98,860/- in the joint name of himself and his spouse. The initial contention of the assessee was that since the property was purchased in the joint names of the assessee and his spouse, any addition, if warranted, should be restricted to 50% in the hands of the assessee. However, on perusal of the material available on record, it is noticed that the entire consideration for purchase of the property was paid from the bank account of the assessee. With regard to the explanation of the assessee that the source of investment was partly from sale proceeds of land belonging to the wife of the assessee amounting to Rs.10,13,000/- and Rs.15,50,000/- arising from sale transactions dated 13.10.2016 and 15.11.2016 respectively, the lower authorities declined to accept the explanation on the ground that the deposits in the bank account of the assessee were made prior to the dates of the said sale deeds. Before us, the assessee has contended that the wife of the assessee had received advance from the purchasers prior to execution of the sale deeds and such cash was deposited in the bank account of the assessee. We have gone through the copies of the sale deeds placed at page nos. 52 to 69 and page nos. 77 to 94 of the paper book. On perusal of same, although it is found that both the properties had been sold in cash, however, no evidence has been brought on record to establish that the purchasers had paid any advance prior to execution of the sale deeds. Further, no confirmation from the purchasers has been placed on record to substantiate the claim of the assessee. In these circumstances, in the interest of justice, we deem it appropriate to restore this issue to the file of the Ld. AO for verification of the claim of the assessee after providing adequate opportunity of being heard. 7.2. With regard to the source of Rs.15,00,000/- explained to have been obtained as loan from Andhra Bank, we have gone through the loan account placed at page no. 99 of the paper book, which is to the following effect: On perusal of the above, it is noticed that the assessee had obtained a loan of Rs.15,00,000/- from Andhra Bank on 30.11.2016. Therefore, in our considered opinion, the source of this amount stands duly explained. Accordingly, the Ld. AO is directed to delete the addition of Rs.15,00,000/-. 7.4. With regard to the explanation of Rs.35,00,000/- stated to have been received as loan from Mr. Khader Basha, the assessee has placed on record the bank statement of the said person showing withdrawals of Rs.10,00,000/- each on 15.09.2016 and a withdrawal of Rs.5,00,000/- on 25.11.2016 (page nos. 101 and 102 of the paper book). On perusal of the bank statement of the Abdul Salam Shaik vs. ITO Page 16 of 18