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Facts
The assessee purchased an immovable property for Rs. 2.8 Crores, but initially failed to provide the source of funds. The AO added the entire amount under Section 69. The NFAC deleted Rs. 2.1 Crores as it was explained as a loan from ICICI Bank, but confirmed the addition of Rs. 70 lakhs, as the assessee could not provide evidence for this alleged loan from Mr. Hosadurgam Nigamanthan Varadarajan.
Held
The Tribunal admitted additional evidence filed by the assessee, including bank statements and an affidavit from the deceased lender's heirs, as these documents were not available earlier. The Tribunal decided to remit the issue back to the lower authorities to examine these new documents and provide an opportunity for hearing to the assessee.
Key Issues
Whether the addition of Rs. 70 lakhs towards the purchase of immovable property is justified when the assessee provided additional evidence after the original assessment and first appellate proceedings, especially considering the death of the alleged lender.
Sections Cited
69
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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC for the assessment year 2015-16 dated 18.12.2023. The assessee raised following grounds of appeal: 1. “The impugned Appellate order dated 18.12.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi in so far as it is prejudicial to the interest of the appellant is opposed to law, facts and circumstances of the case.
2. The NFAC erred in law and on facts in not appreciating the fact that the appellant had explained the source of investment amounting to Rs.70,00,000/-
3. The NFAC erred in law and on facts in not appreciating the fact that the appellant had furnished details of bank statement of the creditor from whom the appellant had borrowed a sum of Rs.70,00,000/- to purchase an immovable property and as such the order passed without verifying the veracity of the transaction/details is bad in law and is liable to be deleted.”
Sri Aubin Sanyal, Bangalore Page 2 of 4 2. Facts of the case are that in this case there was a payment of Rs.2.8 Crores towards purchase of immovable property. Before the ld. AO, the assessee has not furnished source of payment of the impugned amount of R.2.8 Crores. Hence, the ld. AO made addition of Rs.2.8 Crores u/s 69 of the Income Tax Act, 1961 (in short “The Act”). Against this assessee went in appeal before NFAC. Before NFAC, assessee explained that an amount of Rs.2.1 Crores being loan from ICICI Bank and explained the source of payment to that extent. Accordingly, NFAC deleted that addition. However, the balance amount of Rs.70 lakhs alleged to be borrowed by assessee from one Mr. Hosadurgam Nigamanthan Varadarajan. However, the assessee was not able to adduce any evidence to support this loan. Hence, the addition of Rs.70 lakhs was confirmed by NFAC. Against this assessee is in appeal before us. 2.1 Before us, ld. A.R. filed additional evidence as follows:
Sri Aubin Sanyal, Bangalore Page 3 of 4 2.2 The assessee also filed a petition for admission of additional evidence stating that assessee has borrowed Rs.70 lakhs from Mr. Hosadurgam Nigamanthan Varadarajan during the financial year 2014-15 and he was passed away on 4.11.2021. Therefore, assessee was not able to produce any confirmation letter from the said party. Later after much effort, assessee able to procure the above document and prayed that the same may be admitted in the interest of justice under Rule 29 of ITAT Rules, 1963.
The ld. D.R. strongly opposed the argument of ld. A.R. for admission of additional evidence.
We have heard the rival submissions and perused the materials available on record. As seen from the application filed by assessee for admission of additional evidence, it is a fact that Mr. Hosadurgam Nigamanthan Varadarajan was expired on 4.11.2021 and these documents were not available with the assessee at the time of assessment or proceedings before first appellate authority (NFAC). Hence, in the interest of justice, we admit these additional evidences since these additional evidences were first time filed before this Tribunal and the ld. AO has no occasion to examine these additional evidences on earlier occasion. Hence, in the interest of justice, we remit the entire issue in dispute to decide the same in the light of Sri Aubin Sanyal, Bangalore Page 4 of 4 above documents after giving an opportunity of hearing to the assessee. 5. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 1st May, 2024