ITO 34(1)(4), MUMBAI vs. HIMA B GHARAT, MUMBAI

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:

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.