DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), MUMBAI, MUMBAI vs. MANISHA KAMAL KHETAN, MUMBAI

ITA 7891/MUM/2025Status: DisposedITAT Mumbai20 February 2026AY 2023-2416 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order on all issues. Regarding the advance rent of Rs. 22,49,854/-, the Tribunal agreed that the source was explained as advance rent under a valid tenancy agreement and could not be treated as an unexplained cash credit under section 68. It affirmed the CIT(A)'s direction to tax it as house property income in AY 2023-24 on receipt basis and to make adjustments in AY 2024-25 to avoid double taxation, finding no infirmity. Concerning the addition of Rs. 7,31,35,963/- from foreign bank accounts, the Tribunal found that the accounts belonged to separate legal entities, M/s Skyways International Pte. Ltd. and M/s Parkland Investments Ltd. It held that mere signatory authority or beneficial interest through a trust does not ipso facto establish ownership, and section 68 applies to credits in the assessee's books. As the AO did not provide evidence to lift the corporate veil or show the funds represented the assessee's undisclosed income, the deletion by the CIT(A) was sustained. Similarly, for the notional rent of Rs. 1,51,27,315/-, the Tribunal concurred with the CIT(A) that the property was owned by M/s Parkland Investments Ltd., a separate corporate entity, and the assessee was neither the legal nor deemed owner under sections 22 and 27. In the absence of evidence to pierce the corporate veil, the addition was not sustainable. The Tribunal found the CIT(A)'s order to be reasoned and based on documentary evidence, with no perversity or need for remand.

What were the facts?

The Revenue appealed the order of the CIT(A) for Assessment Year 2023-24. The assessee, Manisha Kamal Khetan, declared total income of Rs. 1,20,18,620/-. The Assessing Officer (AO) noticed an increase in the peak balance of a Bank of Singapore account, which the assessee explained as rental receipts and advance rent for a jointly owned Dubai property. The AO added Rs. 22,49,854/- as unexplained cash credit under section 68 read with section 115BBE, as the advance rent was not offered to tax and bank statements were not furnished. The AO also noted increases in peak balances of foreign bank accounts held by M/s Skyways International Pvt. Ltd. and M/s Parkland Investments Ltd., where the assessee was a signing authority. The AO added Rs. 7,31,35,963/- under section 68 r.w.s. 115BBE, considering it unexplained cash credit. Additionally, the AO estimated notional rental income of Rs. 1,51,27,315/- for a villa owned by M/s Parkland Investments Ltd., in which the assessee claimed beneficiary interest, and added it to the total income.

What were the issues?

1. Whether the CIT(A) erred in holding that the advance rent of Rs. 22,49,854/- could not be treated as unexplained cash credit under section 68 of the Income-tax Act, 1961, and was instead liable to be taxed as income from house property in AY 2023-24, with appropriate adjustment in AY 2024-25 to avoid double taxation. - Assessee's contention: The advance rent pertained partly to AY 2023-24 and partly to AY 2024-25, and income was offered proportionately. The receipt was identifiable as advance rent under a valid tenancy agreement. - Revenue's contention: Not recorded. 2. Whether the CIT(A) erred in deleting the addition of Rs. 7,31,35,963/- made under section 68 r.w.s. 115BBE on account of increase in peak balances of foreign bank accounts, where the assessee was a signing authority and claimed beneficiary status through a trust. - Assessee's contention: She was merely a beneficiary of a family trust, not the owner of the companies or accounts. She was an authorized signatory for operational purposes only and had no ownership or beneficial interest. The amounts did not represent her income. - Revenue's contention: Not recorded. 3. Whether the CIT(A) erred in deleting the addition of Rs. 1,51,27,315/- towards notional rent on Villa No. K-25, Palm Jumeirah, where the property stood in the name of M/s Parkland Investments Ltd., and the assessee claimed beneficiary interest. - Assessee's contention: The property belonged to M/s Parkland Investments Ltd., a separate legal entity, and rental income was offered by the company in UAE. She was neither the legal nor deemed owner. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 250,Section 143(3),Section 23(1),Section 24(a),Section 22,Section 27

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Rakesh Joshi, Ld. AR
For Respondent: Shri Annavaram Kosuri, Ld. DR
Hearing: 19.02.2026Pronounced: 20.02.2026

PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal is filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals)-51, Mumbai [hereinafter referred to as “the Ld. CIT(A)”] under section 250 of the Income-tax Act, 1961 dated 17.09.2025, arising out of the assessment order passed by the Deputy Commissioner of Income Tax, Central Circle 3(4), Mumbai [hereinafter referred to as “the Assessing Officer” or “the AO”] under section 143(3) of the Act dated 31.12.2024 for the Assessment Year 2023-24.

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →