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Facts
The assessee, an individual, declared an income of ₹3,23,150 for A.Y. 2018-19. Reassessment proceedings resulted in the disallowance of ₹1,50,000 under section 80C and an addition of ₹12,27,400 under section 69C for unexplained expenditure relating to a motor car purchase. The CIT(A) upheld these additions, prompting the assessee to appeal to the Tribunal.
Held
The Tribunal observed that the assessee had presented a prima facie case with sufficient details and supporting documents for both the section 80C deduction and the source of funds for the car purchase. However, as these details were not verified by the lower authorities, the Tribunal remitted the case back to the Jurisdictional Assessing Officer for thorough verification and re-adjudication on merits.
Key Issues
Whether the disallowance of deduction u/s 80C and addition for unexplained expenditure u/s 69C for motor car purchase were justified, given the assessee's submission of supporting documents; and whether the NFAC order violated principles of natural justice by not considering evidence.
Sections Cited
147, 144B, 80C, 69C, 250(6)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2018-19 is directed against the order dated 23.09.2025 framed by National Faceless Appeal Centre (NFAC), Delhi arising out of Assessment Order dated 24.03.2023 passed u/s.147 r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).
2. At the outset, ld. Counsel for the assessee submitted that the impugned additions are uncalled for because in support of the claim of deduction u/s.80C of the Act assessee has filed the copies of LIC premium receipts and other documents to prove the correctness of claim made u/s.80C of the Act.
3. So far as issue of unexplained expenditure is concerned, he submitted that the said addition has been made for not explaining the source of investment. He submitted that the alleged unexplained expenditure relates to purchase of Vehicle at ₹14,75,436. Source of said purchase is mainly the finance from Mahindra & Mahindra Financial Services Ltd. at ₹9.00 lakh and ₹6.30 lakh received from sale of old Renault Dustar Car. He stated that all these facts are duly mentioned in the statement of facts filed in Form No.35 as well as Form No.36.
4. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).
5. We have heard the rival contentions and perused the record placed before us. We observe that the assessee is an individual and income of ₹3,23,150 declared in the return filed for A.Y. 2018-19. Subsequently, based on the information received from Risk Management Strategy, the reassessment proceedings in the case of assessee were carried out. Certain details were submitted by the assessee during the course of reassessment proceedings. However, ld. Assessing Officer concluded the proceedings disallowing the claim of deduction u/s.80C of the Act at ₹1,50,000 and also made addition for unexplained expenditure u/s.69C of the Act at ₹12,27,400 towards purchase of Motor Car. Income assessed at ₹19,40,540. Aggrieved assessee preferred appeal before ld.CIT(A) and filed all necessary details but failed to succeed. Now the assessee is in appeal before this Tribunal.
6. Before us, ld. Counsel for the assessee has made reference to the facts mentioned along with the grounds of appeal No.1 and 2 and the same reads as under :
A. STATEMENT OF FACTS
1. The appellant is an individual residing at Nashik. For Assessment Year 2018-19, and filed the return of income declaring total income of ₹5,63,140.
2. The assessment was reopened under section 147 read with section 144B (DIN-ITBA/AST/S/147/2022-23/1051275777(1) Dated 24/03/2023. The Assessing Officer completed the reassessment making the following additions: (a) Disallowance of deduction under section 80C of ₹1,50,000; (b) Addition of ₹12,27,400 treating the purchase of a motor car as unexplained expenditure under section 69C.
During the relevant previous year, the appellant made genuine eligible investments under section 80C such as Life Insurance premium. The motor car purchased for ₹14,75,436 was financed 4. substantially through a loan from Mahindra & Mahindra Financial Services Ltd. The balance amount was sourced from sale proceeds of the appellant's old car and personal savings.
5. The appellant filed an appeal before CIT (A)/NFAC using Form 35 (ARN-188853940310523) dated 31/05/2023. The appeal was filed belatedly, and along with Form 35 the appellant submitted all necessary supporting evidence, including and reason for condonation also stated in appeal: a) Grounds of Appeal b) LIC premium receipts, c) Motor car invoice, d) Car Loan Statement e) Car sale confirmation letter, f) Bank statement showing amount of money received from sale of old car from the purchaser. g) Challan of Pre-deposit Tax paid. h) Filed form
35. All documents were duly attached along with the appeal.
The NFAC passed an order under section 250 (DIN & Order NoITBA/NFAC/S/250/2025-26/1081048111(1) dated 23 September 2025, dismissing the appeal on the following grounds:
•Delay in filing not condoned; • Disallowance under section 80C confirmed: • Addition under section 69C confirmed.
7. The impugned NFAC order does not contain any "points for determination", any discussion of the appellant's submissions or facts, nor any reasons for confirming the additions. The order is therefore contrary to the mandatory requirements of section 250(6) of the Income-tax Act, which requires every appellate order to state:
(a) Points for determination; (b) decision thereon; and (c) reasons for such decision.
Therefore the order is purely confirmatory and non-speaking.
8. The order also violates principles of natural justice since no effective or meaningful opportunity of hearing was granted and no consideration of documentary evidence was made.
Being aggrieved, the appellant prefers this appeal before the Hon'ble Income Tax Appellate Tribunal.
“That the appellant respectfully submits that all relevant and material documentary evidence supporting both the claim of deduction under section 80C as well as the explanation of the source of investment for the purchase of the motor car were duly furnished at the time of filing Form 35 before the learned CIT(A)/NFAC. The LIC premium receipts, loan sanction letter and disbursement documents, loan account statement, sale documents of the old Duster car, and corresponding bank credits were all specifically annexed with the appeal. Despite the complete availability of these primary evidences on record, the appellate order proceeds on the erroneous premise that 'substantial documentary evidence was not submitted', which is contrary to the factual position and renders the findings perverse in law. It is a settled legal position that once cogent and verifiable documents are already placed on record, the appellate authority is duty-bound to consider and adjudicate the same. The failure to appreciate the evidences already filed vitiates the impugned order, making it unsustainable.
The appellant further submits that these grounds have been comprehensively explained again before this Hon'ble Tribunal, along with all supporting documents, for proper appreciation and adjudication.
1. Ground on Disallowance of Deduction Under Section 80C (LIC Premiums)
a) The learned CIT (A)/NFAC erred in law and on facts in confirming the disallowance of ₹1,50,000 claimed under section 80C. The details of LIC premium paid is as under :
Sr. Policy Policy Holder Amount of Date of No. Number Premium receipt 1 960022459 Sudhakar Bajirao Shisode 6,004.00 11/11/2017 2 960022462 Sudhakar Bajirao Shisode 6,004.00 11/11/2017 3 961189126 Gunjan Sudhakar Shisode 44,115.00 20/12/2017 (Daughter) 4 963885214 Gunjan Sudhakar Shisode 12,134.00 11/11/2017 (Daughter) 5 960260900 Gunjan Sudhakar Shisode 7,281.00 28/08/2017 (Daughter) 6 961341748 Gunjan Sudhakar Shisode 67,722.00 16/08/2017 (Daughter) Total Premium paid 1,43,260.00 b) The appellant had made genuine and eligible investments in LIC policies during the previous year relevant to AY 2018-19 of ₹1,43,260/-. All LIC premium receipts pertaining to the deduction claimed were duly submitted in the Form 35 appeal before the CIT (A)/NFAC and are again attached with this appeal. The disallowance of amount ₹1,43,260/- is unjustified and contrary to law, and hence liable to be deleted. Amount of disallowance of ₹6,740/- is accepted and will be paid according to the direction of income tax department.
Ground on Addition Under Section 69C - Motor Car Purchase (₹14,75,436) a) Source of Purchase - The vehicle was purchased for ₹14,75,436, and the source of payment is fully explained as follows: 1. ₹9,00,000 - Financed through Mahindra & Mahindra Financial Services Ltd. 2. ₹6,30,000 - Received from sale of old Renault Duster car. b) Loan Evidence: Following documents are enclosed with the appeal. Out of which loan account statement and invoice of car were already submitted along with appeal form 35 in first appeal proceedings.
1. Loan disbursement letter indicating loan of ₹9,00,000.
2. Loan account statement.
3. Bank statement showing EMI repayments.
4. Invoice of New car purchased (Creta) c) Sale of Old Duster Car : The appellant owned a Renault Duster car which was sold for ₹6,30,000. The supporting documents attached are: 1. Invoice copy of original Duster Purchase showing appellant (Sudhakar Shisode as the Owner)
2. Car sale confirmation letter from owner (Sudhakar Shisode) to purchaser (Chabu Buvaji Patil).
3. Updated RC Book Showing transfer of ownership of duster car.
Bank statement of purchaser showing payment ₹3, 00,000 NEFT on 07/12/2017 and ₹3,30,000 NEFT on 13/12/2017 from jalgaon Dist. Central Co-op Bank Ltd.
Bank statement of seller (Sudhakar Shisode ) showing receipts of ₹3,00,000 and ₹3,30,000 total amounting to ₹6,30,000. Hence on basis of above discussion when the source of expenditure is reasonably explained with documentary evidence, section 69C cannot be invoked.
From perusal of the above details mentioned by the assessee, we note that the assessee has made a prima-facie case that it has sufficient details to explain the correctness of claim of deduction u/s.80C of the Act and has also furnished the details for the source of purchase of Motor Car. However, since these details were not furnished before the ld. Jurisdictional Assessing Officer and necessary verification could not be made, we deem it appropriate to remit all the issues raised on merits to the file of ld. JAO who shall verify the proof of LIC premium payments and other documents furnished by the assessee for claiming deduction u/s.80C of the Act, Secondly, ld. JAO shall also verify the source of purchase of Motor Car which the assessee has stated to have received Rs.9.00 lakh from finance through Mahindra & Mahindra Financial Services Ltd. and Rs.6.30 lakh from sale of Old Renault Dustar Car. Ld. JAO shall carry out the proceedings only for the limited purpose of adjudicating these two issues and if the same are found to be correct, then shall decide in accordance with law. Impugned order is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 06th day of January, 2026.