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Facts
The assessee's investment of Rs. 10.50 lakh in a flat was questioned, leading to an addition for unexplained investment under reassessment. The assessee claimed the funds were borrowed from Mr. Umesh D. Shinde, who made the payment via demand draft directly to the housing society. The assessee was unable to produce Mr. Shinde for verification, and the CIT(A) upheld the addition.
Held
The Tribunal found that the investment was made through banking channels by Mr. Umesh D. Shinde, acting as the financier. Since the source of the payment to the housing society was explained through banking transactions, whether paid directly by Shinde or by the assessee (from Shinde's funds), Section 69 of the Act was not applicable. The Tribunal set aside the CIT(A)'s finding and deleted the addition of Rs. 10.50 lakh.
Key Issues
Whether the addition for unexplained investment of Rs. 10.50 lakh was justified when the payment was made by a third-party financier through banking channels directly to the housing society.
Sections Cited
Section 250, Section 143(3), Section 148, Section 131, Section 132, Section 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
Assessee by : None Shri Vishwajit Shinde Revenue by : Date of hearing : 20.01.2026 Date of pronouncement : 03.02.2026 आदेश / ORDER The captioned appeal at the instance of assessee pertaining to the Assessment Year 2007-08 is directed against the order dated 23.07.2025 of Addl/JCIT(A), Prayagraj passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 16.03.2015 passed u/s.143(3) r.w.s.148 of the Act.
When the case called for, none appeared on behalf of the assessee despite due service of notice of hearing. Even on the previous date of hearing fixed on 27.10.2025 there is no one to represent the assessee. I therefore proceed to adjudicate the appeal with the assistance of ld. Departmental Representative and available material on record.
2 Raghunath Maruti Bhosale
Facts of the case in brief are that the assessee is an individual and filed the return of income manually for A.Y. 2007-08 on 05.10.2007 declaring income of Rs.1,04,768/-. Cases selected for scrutiny on the basis of the information about the investment by the assessee in the purchase of flat at Adarsha Cooperative Housing Society. After serving valid notices, reassessment proceedings were carried out. Assessee is a Teacher in a Vidyapeet High School, Kolhapur and derives income from salary. Information was regarding investment of Rs.52,11,500/- towards purchase of flat at Adarsha Cooperative Housing Society and the said investment was spread across from A.Y. 2003-04 to A.Y. 2010-11. So far as the issue under consideration, it is noticed that assessee has made payment of Rs.10,50,000/-. During the course of assessment proceedings, assessee submitted that the flat was booked in A.Y. 2002-03 when the cost intimated was Rs.12.00 lakh. The Chairman Mr. Umesh D. Shinde has provided him finance from time to time. The investment made during the year was from the borrowings from Mr. Umesh D. Shinde who has given the payment through demand draft directly to Adarsha Cooperative Housing Society. Ld. Assessing Officer has also accepted the fact that the payments have been received through banking channel. Statement of the assessee u/s.131 of the Act was also recorded wherein also he made the same statement that he had taken the alleged sum from Mr. Umesh D. Shinde who had directly drawn demand draft in favour of Adarsha Cooperative Housing Society. The assessee expressed his inability to produce Mr. Umesh D. Shinde before the 3 Raghunath Maruti Bhosale Assessing Officer. As the assessee was unable to prove the nexus between the cash stated to be disclosed by Mr. Umesh D. Shinde during the search proceedings u/s.132 of the Act and further the assessee was unable to furnish details of the person who prepared the demand draft at Mumbai and Pune, addition of Rs.10.50 lakh has been made in the hands of assessee and income assessed at Rs.11,54,770/-.
Against the assessment order dated 16.03.2015 assessee preferred appeal before ld.CIT(A) and the same was dismissed vide order dated 06.06.2018. Thereafter, assessee preferred appeal before this Tribunal and vide order dated 14.06.2019 this Tribunal has restored the issue back to the file of ld.CIT(A). However, during the course of fresh proceedings carried out by ld.CIT(A) upon the direction of this Tribunal, six hearings were granted but there was no compliance from the side of assessee. Accordingly, ld.CIT(A) confirmed the addition made by the Assessing Officer. Now the assessee is in appeal before this Tribunal.
Ld. Departmental Representative vehemently argued supporting the order of ld.CIT(A) as well as the Assessing Officer.
I have heard the ld. Departmental Representative and perused the record placed before me. This is the second round of litigation before this Tribunal and the short issue for my consideration is whether ld.CIT(A) is justified in confirming the addition of Rs.10.50 lakh for unexplained investment alleged to be made by the assessee making investment towards purchase of flat at Adarsha Cooperative 4 Raghunath Maruti Bhosale Housing Society. From perusal of the assessment order and more particularly in para 4 it transpires that the assessee made total investment of Rs.52,11,500/- and the information was received by the Assessing Officer about this investment. Perusal of the same indicates that the payments have been made from A.Y. 2003-04 to A.Y. 2010-11 and the same reads as under : Sr.No. Amount Asst. Year Cumulative Assessment invested Rs. Investment done u/s. 1 50,000 2003-04 50,000 2 7,50,000 2005-06 8,00,000 143(3) 3 -- 2006-07 8,00,000 4 10,50,000 2007-08 18,50,000 In progress 5 13,50,000 2008-09 32,00,000 143(3) 6 11,00,000 2009-10 43,00,000 In progress 7 9,11,500 2010-11 52,11,500 143(3)
The instant appeal under consideration is for A.Y. 2007- 08 wherein the amount invested is shown at Rs.10.50 lakh. Assessee has reiterated the submissions that the alleged sum has been paid by Mr. Umesh D. Shinde, chairman of the Adarsha Housing Cooperative Society through banking channel. This fact has also been admitted by the Assessing Officer that the alleged sum has been received by way of demand draft from Mr. Umesh D. Shinde. However, assessee was unable to produce Mr. Umesh D. Shinde for confirming this transaction. I find that assessee has provided the details of source of investment made during the year. Investment has been made through banking channel and the name of person stated as Mr. Umesh D. Shinde who has also been subjected to search. It is also not in dispute that the alleged sum has not been paid from the bank account of the assessee 5 Raghunath Maruti Bhosale but has been paid through demand draft directly to the Adarsha Housing Cooperative Society by Mr. Umesh D. Shinde, who is stated to be the financier of the assessee.
Now the fact remains that either Mr. Umesh D. Shinde has made payment of behalf of the assessee or that the assessee has made the payment directly to Adarsha Housing Cooperative Society. In both the situations, the source of investment stands explained. Therefore, I am of the considered view that section 69 of the Act has no application under the given facts and circumstances of the case. I would like to make it clear that decision has been arrived specifically on the peculiar facts of this case only and it should not be taken as a binding precedent in other cases. Finding of ld.CIT(A) is set aside and the impugned addition of Rs.10.50 lakh is deleted.
In the result, the appeal of the assessee is allowed as per terms indicated hereinabove.