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Facts
The assessee, who is a housewife, had not filed her return of income for AY 2013-14. Reassessment proceedings were initiated based on information regarding on-money payments in the sale of flats. The Assessing Officer made additions of Rs. 53,87,000/- as unexplained investment and Rs. 3,37,000/- as unexplained on-money payment.
Held
The CIT(A) partly allowed the appeal, sustaining an addition of Rs. 14,74,000/- and granting relief for the rest. The Tribunal observed that the housing loan of Rs. 42,50,000/- was substantiated, but the balance of Rs. 14,74,000/- claimed from savings was not supported by evidence. However, the Tribunal noted that similar transactions and sources of funds were accepted in the case of the assessee's spouse for the same assessment year.
Key Issues
Whether the addition of Rs. 14,74,000/- on account of unexplained investment and Rs. 3,37,000/- on account of on-money payment is justified, especially when similar transactions were accepted in the spouse's case.
Sections Cited
147, 148, 144, 142, 144B, 69
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Income Tax Appellate Tribunal, “D” BENCH MUMBAI
आदेश / ORDER
PER MAKARAND VASANT MAHADEOKAR, AM:
This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”], dated 16.10.2025, for Assessment Year 2013-14, arising out of the assessment order passed by the Assessing Officer under section 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961[hereinafter referred to as “the Act”] dated 06.03.2022. Facts of the Case 2. The assessee had not filed return of income for A.Y. 2013- 14. Information was received from ACIT, Central Circle-1(3), Mumbai in connection with search and survey action conducted on 15.10.2018 in the case of M/s Bhagwati Developers and its group concerns. The Assessing Officer recorded that the group was engaged in receiving on-money in respect of sale of flats and commercial units. Based on post-search investigation and seized material, it was observed that the assessee had allegedly purchased a flat for Rs. 53,87,000/- and had made on-money payment of Rs. 3,37,000/-.Accordingly, reassessment proceedings were initiated under section 147 and notice under section 148 was issued. Since the assessee did not file return in response to notice and allegedly did not comply with notices under section 142(1), the assessment was completed under section 144.The Assessing Officer held that: - The entire consideration of Rs. 53,87,000/- represented unexplained investment. - The alleged cash payment of Rs. 3,37,000/- was also unexplained. - Total addition of Rs. 57,24,000/- was made as unaccounted income.
The assessee preferred an appeal before CIT(A) contended that contended that the flat was purchased jointly with her husband for Rs. 53,32,000/- and Rs. 42,50,000/- was funded through housing loan from HDFC Bank. It was also submitted that Rs. 10,82,000/- was paid from past savings of her husband and no cash payment of Rs. 3,37,000/- was made. It was also submitted that the detailed submissions along with documentary evidences were uploaded on 15.03.2022 but the assessment order was passed without considering such submissions by the Assessing Officer.
The learned CIT(A), while adjudicating the appeal, recorded that the assessee is a housewife and had not filed her return of income for the relevant assessment year. It was noted that reassessment proceedings were initiated on the basis of alleged unexplained investment in immovable property and alleged on- money payment. The learned CIT(A) further took cognizance of the fact that in the case of the assessee’s spouse, an assessment order dated 17.03.2022 had been passed under section 147 read with section 144 and section 144B of the Act, wherein no addition was made in respect of the same property transaction. The assessee had placed on record a copy of the assessment order of her spouse and also furnished bank statements evidencing housing loan of Rs. 42,50,000/- obtained from HDFC Ltd. The bank statement reflected that the assessee was a joint borrower in respect of the said housing loan.
The learned CIT(A) observed that the assessment order passed by the Assessing Officer did not mention the specific details of the information initially received on the basis of which reassessment was initiated. On examination of the investment in question, it was held that out of the alleged total investment of Rs. 57,24,000/-, the amount of Rs. 42,50,000/- claimed to have been funded through housing loan stood substantiated. However, the balance amount of Rs. 14,74,000/- claimed to have been sourced from past savings was not supported by any documentary evidence during the appellate proceedings. The learned CIT(A) further noted that in the assessment order of the spouse, there was no explicit satisfaction recorded regarding the acceptance of such balance consideration.
In view of these findings, the learned CIT(A) partly allowed the appeal and sustained the addition to the extent of Rs. 14,74,000/-, while granting relief in respect of the remaining addition.
Aggrieved by the order of CIT(A) the assessee is in appeal before us raising following grounds of appeal: A. Section 147: Invalid Reopening of Assessment: The learned NFAC erred in law and on facts in reopening the assessment u/s 147 without recording an independent “reason to believe” that income had escaped assessment. The reopening is based purely on borrowed satisfaction from information received from the Investigation Wing regarding M/s Bhagwati Developers, without any direct nexus with the appellant.
B. Section 148: No Independent Verification by AO: The AO failed to conduct any independent inquiry before issuing notice u/s 148 or framing the order, which violates the settled law that information alone cannot substitute belief. C. Section 142 r.w.s 144B: Non-consideration of Reply and Evidence (Sec. 142 & 144B): The AO failed to consider the appellant’s written submission dated 15.03.2022 and documentary evidence including bank statements and home loan proof, thereby violating Section 142(3) and Section 144B(1)(xvi), rendering the assessment void u/s 144B(9). D. Section 142(3): Non-supply of Adverse Material: The AO erred in not providing copies of the seized materials or statements relied upon (allegedly recovered from M/s Bhagwati Developers), and denied the right of cross-examination, contrary to Section 142(3) and the rule of natural justice. E. Section 69: Unexplained Investment i.e. Erroneous Sustenance of ₹14,74,000/- by CIT(A): The learned NFAC erred in sustaining ₹14,74,000/- as unexplained merely on procedural grounds, despite identical explanation being accepted in the assessment of the appellant’s spouse (order dated 17.03.2022). Such addition results in double taxation of the same source. F. Section 69: No Evidence of Cash Payment: The allegation of ₹3,37,000/- on-money payment is unsubstantiated by any seized document, statement, or corroborative evidence linking the appellant. The addition is purely conjectural and liable to be deleted. The appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal before or during the course of hearing.
8. The learned Authorised Representative (AR), during the course of hearing before us, submitted that the learned CIT(A) erred in sustaining the addition of Rs. 14,74,000/- under section 69 merely on procedural grounds, without appreciating the complete documentary evidence placed on record. It was contended that Rs. 42,50,000/- was funded through a duly sanctioned housing loan from HDFC Ltd., which has been accepted even by the learned CIT(A), and the balance amount was paid from the regular savings account of the assessee’s spouse through verifiable banking channels. Bank statements, payment details, cheque references and stamp duty challans were filed before the learned CIT(A). It was further submitted that in the case of the assessee’s spouse, assessment order dated 17.03.2022 passed under section 147 r.w.s. 144B for the same assessment year, the very same transaction and source of funds were examined and accepted, and no addition was made. With regard to the alleged on-money payment of Rs. 3,37,000/-, it was submitted that there is no seized material or corroborative evidence linking the assessee to any such cash payment, and that the same allegation was not sustained in the spouse’s case. It was therefore contended that the addition sustained by the learned CIT(A) is conjectural, unsupported by evidence, and liable to be deleted in toto.
The learned Departmental Representative, on the other hand, supported the orders of the Assessing Officer as well as the learned CIT(A).
We have carefully considered the rival submissions and perused the material available on record. At the outset, it is noted that though various legal grounds have been raised in the memorandum of appeal, the learned AR did not press the same during the course of hearing. Accordingly, such legal grounds are not adjudicated and the appeal is examined on merits of the additions sustained by the learned CIT(A).
The issue for consideration is confined to the sustenance of addition of Rs. 14,74,000/- under section 69 and the allegation of on-money payment of Rs. 3,37,000/-.
It is an admitted position that the total investment in the property was Rs. 57,24,000/- as considered by the Assessing Officer. Out of the same, Rs. 42,50,000/- was funded through housing loan from HDFC Ltd. The learned CIT(A) has accepted this component as duly substantiated. The dispute remains only with regard to the balance amount of Rs. 14,74,000/- which was claimed to have been sourced from the regular savings account of the assessee’s spouse.
The assessee has consistently contended that the entire balance consideration was paid through verifiable banking channels out of the spouse’s accumulated savings and that the necessary bank statements, cheque references and other supporting evidences were placed on record before the learned CIT(A). It is further an undisputed fact that in the case of the assessee’s spouse, assessment order dated 17.03.2022 passed under section 147 read with section 144B for the same assessment year, the very same property transaction and source of funds were examined by the Assessing Officer and no addition was made. The Revenue has not placed any material before us to demonstrate that the explanation regarding source of funds in the spouse’s case was rejected or found to be incorrect.
In these circumstances, sustaining the addition of Rs. 14,74,000/- in the hands of the assessee, when the identical transaction and source have been accepted in the hands of the spouse for the same assessment year, leads to an incongruous and inconsistent position. In the absence of any adverse material disproving the documentary trail furnished by the assessee, the addition cannot be sustained merely on the ground that the explanation was not found sufficient during appellate proceedings.
With regard to the alleged on-money payment of Rs. 3,37,000/-, we find that no seized document, statement or corroborative evidence directly linking the assessee to any such cash payment has been brought on record. The addition appears to have been made on general information relating to the builder group without establishing a specific nexus with the assessee. Furthermore, the same allegation was not sustained in the spouse’s case. In the absence of independent and cogent evidence, such addition cannot be upheld.
In view of the above facts and circumstances, we hold that the addition of Rs. 14,74,000/- sustained by the learned CIT(A) is not justified. The addition on account of alleged on-money payment of Rs. 3,37,000/- is also unsustainable for want of corroborative evidence.
Accordingly, the additions are deleted and the appeal of the assessee is allowed.
Order pronounced in the open court on 13.02.2026.