PRALHAD VASANTRAO MULICK,PUNE, MAHARASHTRA vs. THE ITO, (IT) WARD-3, PUNE, PUNE, MAHARASHTRA

ITA 452/PUN/2025Status: DisposedITAT Pune05 May 2025AY 2015-20168 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was a non-resident during the relevant period, and the impugned income did not accrue or arise in India. It was an admitted fact that the entire payment for the property was made through a Standard Chartered Bank NRE Account, and the deposits in this account originated from inward remittances from Malaysia. The Tribunal noted that the appointment letters clearly demonstrated the assessee was working outside India and earning salary income there. The DRP's confirmation of the addition solely on the basis of the non-submission of a Malaysian bank account copy was disagreed with, as other evidence like appointment orders, passports, and the NRE account statement clearly indicated the source of funds was outside India and constituted salary income. Respectfully following judicial precedents, the Tribunal opined that the AO erred in making the addition. Accordingly, the Tribunal directed the deletion of the addition of Rs. 1,09,78,640/-. The grounds of appeal raised by the assessee were allowed.

What were the facts?

The assessee, Prahlad Vasantrao Mulick, is an appellant before the Income Tax Appellate Tribunal (ITAT), Pune Bench, challenging an assessment order dated 24.12.2024 for Assessment Year 2015-16. The order was passed by the Income Tax Officer (ITO), Ward-3, Pune, under section 147 read with section 144C(13) of the Income Tax Act, 1961. The assessee, a non-resident during the relevant period, had not filed a return of income. Information regarding the purchase of immovable property led to a show cause notice under section 148A(b) and subsequent proceedings. The ITO made an addition of Rs. 1,09,78,640/- under section 69 for unexplained investment in immovable property. The assessee's objections before the Dispute Resolution Panel (DRP) were confirmed, leading to the present appeal.

What were the issues?

1. Whether the addition of Rs. 1,09,78,640/- under section 69 of the Income Tax Act, 1961, as unexplained investment in immovable property, is sustainable in law and on facts, considering the assessee's non-resident status and the source of funds. Assessee's contentions: The assessee argued that they were a non-resident working in Malaysia during the period. All payments for the property were made through a Standard Chartered Bank NRE Account, with deposits originating from foreign inward remittances from Malaysia. The assessee contended that the source of money was outside India and therefore not taxable in India. They relied on the passport copies, appointment letters, and the fact that the Assessing Officer (AO) admitted the source of funds in the remand report. The assessee also cited Nitin Mavji Vekariya Vs. ITO, Shri Vinodkumar Hiralal Raja Vs. ITO, Vijaykumar Kanaiyalal Matta Vs. ITO, and ITO Vs. Madhav Vasant Dalvi. Revenue's contentions: The Revenue relied on the order of the Dispute Resolution Panel (DRP).

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 144C(13),Section 139(1),Section 148A(b),Section 148A(d),Section 148,Section 5,Section 6,Section 10(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “C” :: PUNE

Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE

PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the assessee is against the Assessment Order of Income Tax Officer(IT) Ward-3, Pune, passed under section 147 r.w.s 144C(13) of the Income Tax Act, 1961; dated 24.12.2024for Assessment Year 2015-16. The assessee has raised the following grounds of appeal :

“1. The learned Assessing Officer acting under directions of leaned Dispute Resolution Panel erred both on facts and in law in confirming the addition of Rs.1,09,78,640 u/s 69 of the Act alleging unexplained investments made by the assessee by holding

The order continues below.

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