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Facts
The assessee purchased an immovable property. The Assessing Officer (AO) reopened the assessment alleging escapement of income as the assessee had not filed a return. The assessee claimed the investment was funded by her deceased husband, a non-resident Indian (NRI), and her name was added as a joint owner due to his NRI status. The AO was not convinced and added a portion of the investment as unexplained.
Held
The Tribunal found that the assessee had consistently stated that the investment was made by her deceased husband and provided documentary evidence, including bank statements and the husband's income tax return showing rental income from the property. The Tribunal concluded that the source of investment was satisfactorily established and the AO failed to identify any other source of income.
Key Issues
Whether the addition made under section 69 of the Act for unexplained investment in property is justified when the assessee claims the funds were provided by her deceased husband and supports it with documentary evidence.
Sections Cited
69, 147
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MAKARAND VASANT MAHADEOKAR
(Assessment Year: 2013-14) Rita Anil Kapoor National Faceless Assessment Rowhouse No. 6, Grand Paradi, Centre, Delhi August Kranti Marg, Kemps Corner, Vs. [present jurisdiction Income-tax Mumbai-400 036 Officer Ward 19(2)(4)-Mumbai] PAN/GIR No. ATVPK 7073 K (Appellant) : (Respondent) Appellant by : Shri M. P. Lohia Respondent by : Shri Annavaram Kosuri Date of Hearing : 18.02.2026 Date of Pronouncement : 23.02.2026 O R D E R
Per Saktijit Dey, Vice President:
The present appeal by the assessee, arises out of order dated 19.08.2025 passed by National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short) 2013-14.
The solitary issue on merit is concerning the addition of an amount of Rs.6,60,37,500/- u/s. 69 of the Act, representing alleged unexplained investment in purchase of immovable property.
Briefly, the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee did not filed her return of income, since, she did not have any reportable income.
Rita Anil Kapoor vs. NFAC 4. Subsequently, the Assessing Officer (‘A.O.’ for short) received information that in the year under consideration, the assessee had purchased an immovable property investing huge amount. Whereas, she had not filed any return of income. Alleging escapement of income, the A.O. reopened the assessment u/s. 147 of the Act. In course of assessment proceeding, the A.O. called upon the assessee to explain the source of investment made in purchase of immovable property. In response to the query raised by the A.O., the assessee furnished the details of the property purchased. While explaining the source, the assessee submitted that the entire fund for purchase of property was contributed by her husband Shri Anil Kapoor (now deceased), out of his own savings and assessee has not invested even a single penny. The assessee explained that assessee’s name was merely added as a joint owner while executing the sale agreement considering the fact that assessee’s husband was a non-resident India (NRI). The assessee further intimated the A.O. that her husband had died prior to initiation of assessment proceedings and copy of death certificate was furnished before the A.O. To demonstrate that the funds have been sourced from her husband, the assessee furnished relevant bank statements depicting movement of fund. The A.O., however, was not convinced with the submissions of the assessee. After verifying the bank account, the A.O. observed that amount of Rs.5,01,00,000/- paid through three cheques of Rs.1,67,00,000/- even from BNP Paribus Short Term Income Fund, stood explained. Whereas, according to the A.O., the balance payment of Rs.12,34,00,000/- towards purchase of house and stamp duty of Rs.86,72,000/- remained unexplained. The assessee being joint owner of the property, the A.O. added an amount of Rs.6,60,37,800/-, being 50% of the aggregate amount of Rs.13,20,75,000/-, at the hands of the assessee by treating it as ‘unexplained investment’ u/s. 69 of the Act.
Before us, ld. Counsel appearing for the assessee drew attention to the copy of the sale deed placed in the paper book and submitted that since the husband was NRI, assessee’s name was added as joint owner while executing the sale deed. Drawing our attention to the schedule of payment mentioned in the sale deed, ld. Counsel submitted, the entire payment was sourced through assessee’s husband Late Anil Kapoor. In this context, he drew our attention to copy of joint bank account in the name of the assessee and her husband, as also the bank statement of assessee’s husband. He also drew our attention to the fund flow statement with source. He submitted, without factually verifying the contentions made and the documents furnished before him, the A.O. arbitrarily made the additions. Whereas, ld. First appellate authority has sustained the additions mechanically, merely repeating the observations of the A.O. Thus, he submitted, the addition has to be deleted. In support, ld. Counsel for the assessee relied upon the decision of Hon'ble Jurisdictional High Court in case of Hetal Vipul Shah vs. ITO [2025] 177 taxmann.com 470 (Bom).
The ld. Departmental Representative (‘ld. DR for short) strongly relied upon the observations of the A.O. and ld. First appellate authority.
We have given thoughtful consideration to rival contentions and perused the materials on record. We have also gone through the judicial precedent cited before us by ld. Counsel appearing for the assessee. Undisputedly, from the stage of assessment proceeding itself the assessee had consistently taken the stand that the entire investment in Rita Anil Kapoor vs. NFAC purchase of the house property was made by her deceased husband. Such claim of the assessee was backed by documentary evidences including bank statements. On perusal of the sale deed, we found that the property has been purchased jointly in the name of assessee’s husband Late Anil Kapoor and the assessee. The sale deed enumerates the details of payment of sale consideration of Rs.17,35,00,000/-. In fact, in course of assessment proceeding, the assessee had furnished the entire break up of payments with source along with the copies of bank statements. The source of investment has been explained as under:
From the details furnished, it can be seen that the entire payment was made through cheque and no payment in cash is involved. Even, the assessee had explained the source of such investment by reconciling with the bank statements. On perusal of bank statements placed before us, it is noticed that an amount of Rs.5,01,00,000/- has come from BNP Paribus Short Term Income Fund, whereas, Rs.8,38,50,000/- was paid through the joint
Rita Anil Kapoor vs. NFAC account held by the assessee and his husband in HSBC Bank, having been transferred from fixed deposits standing in the name of Late Anil Kapoor for an amount of USD 15 lacs. Another amount of Rs.9 crores has been credited to the said bank account out of the withdrawal. Thus, the entire source of investment in the purchase of property stands explained through the bank accounts alone. Admittedly, all these documentary evidences were furnished before the departmental authorities. It is also a fact that assessee’s husband Late Anil Kapoor had died prior to commencement of assessment proceeding. Thus, when assessee’s husband had died prior to commencement of assessment proceedings, his confirmation could not have been furnished by the assessee. However, all other documentary evidences including income tax return, copy of husband’s death certificate were filed before the A.O. On perusal of the return of income filed by Late Anil Kapoor, copies of which are placed in the paper book, it is noticed that he had offered the rental income from the very same property in A.Ys. 2014-15 and 2015-16. While, in A.Y. 2014- 15, he has offered an amount of Rs.40 lacs, in A.Y. 2015-16 it has increased to Rs.60 lacs. All these evidences available on record undeniably demonstrate that the investment in purchase of the house property was entirely funded by assessee’s husband through legitimate source and banking channel. The allegation of the A.O. that the assessee could not furnish supporting evidences to explain the source of investment does not stand to reason, keeping in view the evidences available on record.
Learned first appellate authority has merely parroted the version of the A.O. stating that specific details required by the A.O. were not furnished. We fail to understand what more specific details could have been furnished by the assessee to satisfy the A.O. Keeping in view the factual matrix and the evidences available on record, we have no hesitation in Rita Anil Kapoor vs. NFAC holding that the assessee had satisfactorily establish the source of investment in purchase of the house property. Hence, no addition u/s. 69 of the Act is called for. More so, when the A.O. has failed to identify any source of income of the assessee. The judicial precedent relied upon by the ld. Counsel for the assessee supports the view taken by us. Accordingly, we direct the A.O. to delete the addition made u/s. 69 of the Act.