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Facts
The assessee purchased vacant land for Rs. 50 lakh, incurring a total investment of Rs. 57,69,830/- (including stamp duty). While Rs. 48 lakh of the investment's source was explained, the Assessing Officer (AO) and subsequently the CIT(A) treated the remaining Rs. 9,69,830/- as unexplained investment under Section 69 of the Income Tax Act due to insufficient evidence. The appeal challenges this addition.
Held
The Tribunal found that the assessee failed to substantiate the source of the remaining Rs. 9,69,830/- despite claiming funds from a brother and cash withdrawals. No concrete evidence was presented to connect the alleged sources to the specific unexplained amount or to counter the findings of the lower authorities. Consequently, the addition made by the AO and upheld by the CIT(A) was confirmed.
Key Issues
Whether the addition of Rs. 9,69,830/- as unexplained investment under Section 69 of the Income Tax Act was justified, given the assessee's inability to provide cogent evidence for the source of funds for property acquisition.
Sections Cited
250, 143(3), 147, 148, 69, 131
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI BALAKRISHNAN SSHRI SANDEEP SINGH KARHAIL
Date of Hearing – 18/09/2025 Date of Order - 27/10/2025
O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 26/02/2025, passed under section 250 of the Income-tax Act, 1961 (“the Act”), by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2013-14.
During the hearing, despite service of notice on the assessee, no one appeared on behalf of the assessee, nor was any application seeking adjournment filed. Therefore, we proceed to decide the present appeal on the basis of the material available on record and after considering the submissions of the learned Departmental Representative (“learned DR”).
In this appeal, the assessee has raised the following grounds:- “
1. The learned CIT(A) erred in by not considering the copy of the sale agreement as additional evidence submitted before him which undermines the fairness and thoroughness of the appellate process.
2. Order of the learned CIT(A) merely represents a procedural lapse and diminishes the evidentiary foundation of the CIT(A)'s decision.
3. CIT(A) did not adequately consider or challenge the AO's argument, overlooking the fact that the remittances and the registration align with the standard property transactions, especially given the complexities and timelines involved in property registration matters.
4. The Appellant craves leave to amend, alter, add or delete all or any of the above grounds of appeal as may be urged at the time hearings. The Appellant pray the hon'ble Tribunal to delete the addition of Rs.9,69,830 under section 69 or any other relief which the Tribunal may deem fit and proper in the nature and circumstances of the case.”
4. We have considered the submissions of the learned DR and perused the material available on record. The brief facts of the case are that the assessee is an individual and for the year under consideration filed her return of income on 27.08.2014, declaring a total income of Rs.3,60,000/- and agricultural income of Rs.5 Lakh. The return filed by the assessee was selected for scrutiny, and vide order passed under section 143(3) of the Act, the scrutiny assessment proceedings were concluded, disallowing a certain sum of agricultural income and deduction claimed under section 80TTA of the Act. Subsequently, from the assessment record, it was noticed that the assessee purchased a vacant land admeasuring 0.53 cents at Kommadi, Visakhapatnam, for a consideration of Rs. 50 lakh vide sale deed dated 14.02.2013 and also paid stamp duty of Rs. 7.70 lakh. As the documents furnished by the assessee in support of the source of payment of the sale consideration were either unsatisfactory or incomplete, notice under section 148 of the Act was issued to the assessee on 23.03.2018 and proceedings under section 147 of the Act were initiated. Subsequently, in response to the statutory notices, the assessee submitted that the consideration of Rs.40 Lakh was paid in cash. It was further submitted that part of the consideration was paid by her father, and some part of the money was also received from her brother. In this regard, the assessee furnished a copy of the cashbook of her father in support of the submission that an amount of Rs. 28 Lakh was received from her father. Further, to substantiate the balance payment, the assessee submitted that she availed a gold loan of Rs.10 Lakh and also withdrew money from her overdraft account to an extent of Rs.12 Lakh. The assessee also submitted that from the year 2011 to 2013, the assessee received an amount of Rs.7,21,068/- from her brother, which was also used for payment of sale consideration for purchasing the aforementioned plot of land in Vishakhapatnam. After considering the submissions of the assessee, the following show cause notice was issued, asking the assessee to explain the source of payment of Rs. 19,69,830/-: - “In respect of sources for purchasing of the property, you have stated one of the sources from your brother Sri Suresh Varma who transferred sums through the bank channels. It is seen from the HDFC Bank Account No.2021 submitted by you that a sum of RS.3,15,718/- credited on 15-09-11 and Rs.4,05,350/- credited on 18-10-2011. There is cash withdrawal of Rs.11,00,000/- on 20-11-2011. Your attention is drawn to the following: - There is no confirmation letter from Sri Suresh Varma, your brother - The said transaction is not reflecting in the statement of affairs (B/S) submitted by you. - Vide your letter dt. 19.7.2018, you have stated that the reasons for time gap between foreign remittance and registration of said property as a) to evict the unauthorized occupants and b) resolution of dispute as to the plinth area. However, no supporting documentary evidences were furnished.
- The nexus between the sums received from the brother and the cash payments made on the date of registration is not proved. To sum up, The investment made in purchasing the property: Rs.50,00,000/- Stamp duty paid Rs. 7,69,830/- Total Rs.57,69,830/- Out of the above sources stated are Cash Received from father : Rs. 28,00,000/- Gold loan credited to OD And DDs issued Rs. 10,00,000/- Hence Balance cash paid towards purchase of property: Rs. 19,69,830/-(brothers loan of Rs. 11 lakhs was not evidenced as per the reasons mentioned above) You are requested to show cause as to why the amount of Rs. 19,69,830/-should not be treated as unexplained investment. Your objections to the above with valid and supporting evidences may be filed on or before 10-09-2018, falling which the assessment will be completed in the aforesaid manner, as per the information available on record without giving any further notice.”
In response, the assessee submitted that Rs.15 Lakh were received from her father on 13.02.2013, and another amount of Rs.15 Lakh was received from father on 14.02.2013. Thus, the assessee submitted that out of the aforesaid amount, the assessee paid Rs. 28 Lakh for the acquisition of the property, and the balance cash was utilised elsewhere. It was further submitted that an amount of Rs. 10 Lakh were received from the gold loan, and the amount was credited on 13.02.2013 in her bank account. Further, it was submitted that from the overdraft bank account maintained with Punjab National Bank, an amount of Rs.12 Lakh was withdrawn.
The Assessing Officer (“AO”), vide order dated 29.10.2018 passed under section 147 of the Act, after considering the submissions of the assessee and details filed, accepted the contention of the assessee that Rs.28 Lakh paid in respect of the purchase of the plot of land was received by the assessee from her father. Further, the AO also accepted the contention regarding the gold loan of Rs.10 Lakh availed by the assessee. As regards the cash withdrawal of Rs. 12 Lakh by the assessee from her overdraft bank account, the AO noted that on 13.02.2013, the assessee redeposited Rs.2 Lakh in the same bank account. Therefore, the AO held that only Rs.10 Lakh out of said cash withdrawal from the overdraft bank account can be said to be for the purpose of purchase of the property. Accordingly, the AO agreed with the contention of the assessee regarding the source of payment to an extent of Rs. 48 Lakh in respect of the purchase of a plot of land. However, in respect of Rs.9,69,830/-, the AO was still not convinced with the submissions of the assessee, as the assessee withdrew Rs.11 Lakh on 20.11.2011 from her bank account in which her brother deposited Rs.7,21,068/- in two instalments on 15.09.2011 and 01.10.2011. Accordingly, the AO during the assessment proceedings, issued summons under section 131 of the Act to the vendor calling for relevant details in connection with his confirmation letter, namely sources of income, link document copy, evidences for receipt of cash from the assessee, details of utilization of amount so received, details of encroachment of the property and the time of eviction, etc. with specific evidences. In response, the vendor appeared and recorded his sworn statement. It was submitted that he was merely a GPA holder of the impugned land and only got a commission of Rs. 1,80,000/- for facilitating the GPA and further sale to the assessee. The vendor further submitted that the cash payment relating to the sale of land to the assessee was made by her father through another person from the year 2011 to 2013 in 15 or so instalments. Accordingly, the AO after considering all the evidences and material available on record, including the statement recorded under section 131 of the Act as noted above, held that out of the total investment of Rs.57,69,830/-, a sum of Rs.48 Lakh has only been explained by the assessee and the balance sum of Rs.9,69,830/- is unsubstantiated due to lack of cogent evidence. Accordingly, the AO made an addition of Rs.9,69,830/- under section 69 of the Act as an unexplained investment in the acquisition of the immovable property.
The CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the addition of Rs.9,69,830/- made by the AO under section 69 of the Act. Being aggrieved, the assessee is in appeal before us.
Having considered the submissions and perused the material available on record, it is evident that out of the total investment of Rs.57,69,830, the Revenue only treated the amount of Rs.9,69,830/- as unexplained, as the assessee could not substantiate the source of payment of the said sum for the purchase of the property. In respect of the balance payment of Rs.48 Lakh, as noted above, the assessee furnished evidence during the assessment proceedings, which has been duly accepted by the AO. From the record, it is evident that it is the consistent plea of the assessee that she received Rs. 3,15,718/- on 15.09.2011 and Rs. 4,05,350/- on 01.10.2011 from her brother and the said sums were credited in her bank account maintained with HDFC Bank. However, from the perusal of the record, it is further evident that the AO recorded a categorical finding that out of the same bank account, on 20.11.2011, the assessee withdrew Rs. 11 Lakh in cash. No material has been brought on record by the assessee contrary to the aforesaid findings available on record. It is pertinent to note that if the Revenue has doubted the utilisation of funds by the assessee, then only the assessee can prove to the contrary by furnishing necessary evidence, which in the present case is completely absent. It is also pertinent to note that even though the assessee withdrew cash of Rs. 11 Lakh in the year 2011, the sale transaction only concluded in the year 2013. As noted above, in the statement recorded pursuant to the summons issued under section 131 of the Act, the vendor also claimed that the cash payment relating to the sale of land was made by the assessee’s father from the year 2011 to 2013. Therefore, considering all the material placed on record, we are of the considered view that the assessee failed to substantiate the source of payment of Rs.9,69,830/- for the purchase of the plot of land in Visakhapatnam. Accordingly, we do not find any infirmity in the impugned addition made by the AO under section 69 of the Act and upheld by the learned CIT(A). Therefore, the impugned addition is upheld. Accordingly, Grounds no.3 and 4 raised in assessee’s appeal are dismissed.
Insofar as Grounds no. 1 and 2, raised in the assessee’s appeal, are concerned, no material has been placed on record to support the contentions raised in these grounds. Accordingly, the said grounds are also dismissed.
In the result, the appeal by the assessee is dismissed. Order pronounced in the Open Court on 27/10/2025