Loading judgment…
Facts
The assessee, a non-resident Indian (NRI), purchased an immovable property for Rs. 32 lakhs. The Assessing Officer (AO) made an addition of Rs. 14.70 lakhs as unexplained investment, considering funds routed through the assessee's mother. The assessee provided documentary evidence to explain the trail of these funds, sourced from overseas earnings.
Held
The Tribunal found that the assessee had adequately explained the source of funds used for the property purchase, including the amount routed through his mother. The documentary evidence supported the explanation of the trail of funds, and the relationship between the assessee and his mother was also established.
Key Issues
Whether the addition of Rs. 14.70 lakhs as unexplained investment, based on funds allegedly routed through the assessee's mother for the purchase of immovable property, is justified.
Sections Cited
69, 115BBE, 147, 144C(13), 144C(5), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “I” BENCH MUMBAI
Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the final assessment order passed by the Assessing Officer u/s.147 r.w.s. 144C(13) of the Act dated 28.08.2025, pursuant to the direction issued by the ld. Dispute Resolution Panel – 1, Mumbai vide order dated 28.07.2025 vide order no. ITBA/DRP/F/144C(5)/2025-26/1078981626(1) dated 28.07.2025 u/s. 144C(5) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for AY 2017-18.
Grounds taken by the assessee are reproduced as under:
Johnson Praveen Quadros, AY 2017-18 1.0 On the facts and circumstances of the case, the Dispute Resolution Panel, Mumbai has grossly erred in dismissing the appellant's objections on mere presumptions and without thoroughly examining the facts and evidence presented, and confirming the proposed variations in the draft assessment order with addition of Rs. 14,70,000/- to the income of the appellant u/s 69 r.w.s. 115BBE of the Income Tax Act, 1961. 2.0 The appellant craves this Hon'ble Tribunal to provide stay of recovery of demand till the conclusion of this appeal. 3.0 The appellant craves leave to add or alter any ground of appeal at any time up to the final decision of the appeal, and to educe additional evidence, if so required while prosecuting the appeal.
3. The only issue involved in the present appeal is in respect of addition of Rs.14,70,000/- u/s 69 of the Act as unexplained investment. Brief facts of the case are that assessee is a non-resident Indian (NRI) in the year under consideration. Return of income was not filed for the year. Based on the information available regarding purchase of immovable property by the assessee amounting to Rs.32 lakhs, proceedings u/s 148 were initiated. It was gathered that assessee had purchased an immovable property for consideration of Rs.32 lakhs in respect of which details of payments with supporting documents and evidence were called for.
3.1. Assessee explained before the ld. AO that since 2011 when he became NRI, had been regularly transferring money to his blood relatives in India out of his earnings overseas. This accumulation was invested through his relatives for purchasing the immovable property in India. Assessee had made part payment directly through his bank account also. Date wise description of payments made towards investment in the immovable property both, directly by the assessee and through his mother is tabulated below. For the investment through the mother of the assessee, trail of funds amounting to Rs.14.70 lakhs is also explained which was sourced by the assessee
Johnson Praveen Quadros, AY 2017-18 from his overseas earnings. Assessee has placed on record corroborative documentary evidence to explain the trail of funds invested through his mother as under:
Ld. AO had no doubt on the investment component directly made by the assessee. What is under contest is the amount of Rs. 14.70 lakhs which has been made through the account of mother of the assessee. This trail of funds into the account of mother of assessee is backed by corroborative documentary evidence and adequately explained before us by the Ld. Counsel of the assessee. Assessee has Johnson Praveen Quadros, AY 2017-18 also established the relationship of mother through whose account part of these payments were made by placing copy of his passport. Assessee has also demonstrated that the initial money transferred to his mother were invested by her in term deposits with bank which over a period got matured and were then utilized for making investment in the immovable property under consideration.
We have perused the documents placed on record and also given thought to the considerations to the submissions made. The above stated factual position remains uncontroverted as nothing contrary has been brought on record. Assessee has adequately explained the source of payments made for the purchase of immovable property, part of which was added as unexplained investment. Accordingly, the addition so made of Rs. 14.70 lakhs u/s 69 by the ld. AO is deleted. Grounds raised by the assessee in this respect are allowed.
In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 17 February, 2026 Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member Accountant Member Dated:17 February, 2026 Ankit, Sr.P.S. Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,
(Dy./Asstt.Registrar) ITAT, Mumbai