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Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI
Before: SHRI JOGINDER SINGH & SHRI ASHWANI TANEJA
O R D E R Per ASHWANI TANEJA, AM
This appeal has been filed by the revenue against the order of Commissioner of Income-tax (Appeals) [hereinafter called CIT(A)] dt 14- 10-2014 passed against the assessment order dt 28-3-2013 passed by the AO u/s 143(3) for A.Y. 2010-11 on the following grounds:
“1) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in law and on facts in deleting the addition made u/s. 69 ignoring the fact that the materials available was not sufficient to prove the creditworthiness of lender and donor, and thereby the investment made in purchase of flat remained unexplained. 2) 'On the facts and in the circumstances of the case and in law, the powers of the Ld. C 11(A) are co-terminus with that of the A.O. The Ld. C[T(A) has erred in law, in not curing the defects, if any, in the assessment order (including the Remand Report), when he was duty bound to do so as has been held in following judicial pronouncement i) CIT VS Kanpur Coal Syndicate, (1964) 53 ITR 225 (SC) ii) CIT vs Jay Textile (1981) 128 ITR 480 (Punj. & Har.) iii) Subramania lyer vs. CIT (1978) 113 hR 685 (Kerala) 3) "On the facts and in the circumstances of the case and in law, the Ld. C 11(A) has erred in Law and on facts in accepting the sources of funds for loans and gifts taken by the assesse for investment in flat amounting to Rs.22,00,000/- & Rs. 26,00,000/- respectively by simply relying on the second remand report of the Assessing Officer and not arriving at independent conclusion particularly when the additional evidence filed before him by the assesse was not proof enough to explain the sources of loan and gift and also the fact that the assesse mad irreconcilable contradictory claims before the A.O. at the time of assessment and at the time of second remand report.
4) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in law and on facts, in deleting the addition of Rs.50,24600/- on account investment in purchase of flats u/s. 69 of the l.T. Act, 1961.”
During the course of hearing, ld.DR relied upon the assessment order whereas the ld.counsel of the assessee relied upon the order of Ld.CIT(A). All the grounds relate to common issue of addition made by the Assessing Officer u/s 69 aggregating to Rs.50,24,600 on account of investment in purchase of flats u/s 69 of the Act, which was deleted by the Ld. CIT(A) in the first appeal. Being aggrieved, the revenue filed appeal before the Tribunal.
The brief background and facts of the case are that the assessee, an individual, was asked to explain the source of investment in the flat purchased by her for Rs.62 lakhs during the course of assessment proceedings. The assessee explained that the total investment in the house property was Rs.65,24,060 including registration charges, etc. It was further explained that the said investyment was made out of the following sources:- Housing loan 15,00,000 Loan from Mr. Vanmali 22,00,000 Loan from Provident Funds 2,79,500 Gift from father 26,00,000 65,79,500
Out of the above, the Assessing Officer accepted the sources to the extent of Rs.15 lakhs only and the balance amount of Rs.50,24,060 was treated as unexplained investment. Being aggrieved, the assessee filed appeal before the Ld.CIT(A) where exhaustive submissions were filed along with further evidences to explain the sources. Accordingly, the Ld CIT(A) sent the above said submissions and evidences to the Assessing Officer for his examination and remand report. The Assessing Officer examined the submissions, details and evidences furnished by the assessee to justify and substantiate the aforesaid sources of investment in the flat purchased by the assessee and furnished remand report dt 16-09-2014; relevant portion of which is reproduced hereunder: “In remand proceeding, the representative of assessee submitted the sources / payment of funding for investment in immovable property, the details of which are as under .• Mr. Pravin Vanmali paid R. 10,00,000/- directly to the builder on behalf assessee on 01-02-2010 details of cheque payment is mentioned in property agreement. Further, Mr. Pravin Vanmali paid Rs. 12,00,000/- directly to the builder on behalf of assessee on 16-02-2010 details of cheque payment receipt enclosed. The assessee stated that an amount of Rs. 22,00,000/- received from Mr. Pravin Vanmali is unsecured loan taken during the year. In this regard, assessee furnished loan confirmation letter from Mr. Pravin Vanmali alongwith copy of bank statement and copy of IT return. Further, notice u/s. 133(6) is issued to Mr. Pravin Vanmali for cross verify the said loan transaction. In response to the said notice, Mr. Pravin Vanmali filed letter dated 15-07-2014 in which he confirmed the loan transaction between him and assessee. 2.Assessee, further furnish that sources payments of Rs. 24,99,000/- from his own A/cs and rest payment of Rs. 15,00,000/- is from housing loan taken by assessee during the year. In this regard, assessee furnished her bank a/c. maintained with Municipal Co-op Bank in which payments were made to builder is reflected. Further, assessee submitted that her father Bhalchandra Gharat has given gift of Rs. 26,00,000/- during the year under consideration. Assessee furnished copy of gift confirmation letter from her mother since her father is expired without making any gift deed and furnished copy of bank statement of late Bhalchandra Gharat. The aforesaid loan transaction is appearing in bank statement of late Bhalchandra Gharat as well as assessee's bank statement. Further, assessee submitted sources of fund of her father is sale proceeds of agricultural land submitted copy of sale agreement of agricultural land by her father. Further, assessee has withdrawn Rs.2, 79,500/- GPF A/c and furnished copy of GPF Application and copy of ECS certificate in respect of amount paid. In view of the above, case may be decided on merit of the case."
The Ld CIT(A) considered the remand report and also considered the evidences furnished by the assessee and found that the assessee had discharged its onus under the law to substantiate the source of investment and accordingly, he deleted the addition made by the Assessing Officer with the following observations:
“ I have considered the submission of the Authorised Representative and the order of the Assessing Officer as well as the remand report. It is seen that the total expenditure towards purchase of property, including stamp duty and registration charges comes to Rs.65,24,060/-, which has been financed as under:
Application for purchase Purchase cost of the property 62,00,000 Stamp Duty 2,93,000 Registration 31,060 65,24,060
Housing loan 15,00,000 Loan from Mr. Vanmali 22,00,000 Loan from Provident Funds 2,79,500 Gift from father 26,00,000 65,79,500 The Assessing Officer has already considered and accepted in the assessment order the housing loan of Rs. 15.00,000/-. In respect of the payments made by Shri Vanmali of Rs.22,00,000/-, the Assessing Officer found that payments of Rs. 10,00,000/- and Rs. 12.00,000/- were made by him directly to the builder, on behalf of the assessee. Confirmation has been filed by Mr. Vanmali before the Assessing Officer alongwith copy of bank statement and copy of Income Tax Return. No adverse view / inconsistency has been found by the Assessing Officer in respect of this claim. Accordingly, loan of Rs.22,00,000/- from Mr. Vanmali has to be accepted as a source of purchasing immovable property by the assessee. Similarly, the gift of Rs.26,00,000/given by the assessee's father to the assessee and GPF withdrawal of Rs.2,79.500/- has also been verified by the Assessing Officer during assessment proceedings and no adverse comment has been made by him in the Remand Report dated 16-09-2014. The Assessing Officer has mentioned that the transaction appears in the bank statement of assessees father as well as that of assessee's. The sources of the gift are stated to be sale proceeds of agricultural land. in respect of which relevant documents were furnished before the Assessing Officer. It has been stated by the Authorised Representative that the case of assessee's father has been reopened to further verify the taxability of sale of agricultural land and other issues. Thus, since the identity of the donor and the genuineness of the transaction has been established the gift of Rs 26 00 000/- has to be accepted as valid for the purposes of the sources of purchase of the immovable property. Even if the sale of agricultural land has not been offered to tax by assessee's father, necessary action would lie in his hands, for which steps have already been initiated by the Assessing Officer. In view of all the above, the sources of finance for the purchase of immovable property stand duly explained. The Assessing Officer is, therefore, directed to delete the addition of Rs. 50,24,060/- made in the assessment order in this regard.”
We have gone through the evidences shown to us by the ld.counsel of the assessee as enclosed in the paper book and also the orders passed by the lower authorities. It is noted by us that all the evidences were duly examined by the AO also during the course of remand proceedings and nothing adverse has been noted therein. It appears that addition was made in the assessment order for want of proper evidences. The required evidences have been furnished by the assessee before the Ld.CIT(A) which were duly examined by the AO as well as Ld.CIT(A) and accordingly, the addition was deleted by the Ld.CIT(A). Thus, taking into account the totality of facts and circumstances of the case, we find that assessee has been successfully able to substantiate the sources of investment made in the flat. The assessee has duly explained the transaction and substantiated the transaction of receiving unsecured loans as well as amount of gift from her father. In our view, the addition was not sustainable in view of facts of this case and, therefore, it was rightly deleted by the Ld.CIT(A). We do not find any need for interference in the order of Ld.CIT(A) and, therefore, the same is hereby confirmed. Accordingly, grounds raised by the revenue are dismissed.
As a result, appeal filed by the revenue is dismissed.
Order pronounced in the court on this19th day of Aug, 2016.