2021 (7) TMI 8 - AT - Income Tax

Unexplained investment in purchase of the property - co-ownership - double addition - CIT-A deleted the addition - HELD THAT - CIT(A) has accepted the assessee's contentions inter alia that the impugned sum involved an amount had been invested by her husband than herself and therefore, the same ought not have been taxed in his hands only. It further transpires regarding the balance sum of ₹ 22,00,000/- that the assessee has sufficiently explained sources thereof by filing return for A.Y. 2015-16 along with balance sheet and other supportive evidences. Thus, lower appellate findings deciding the issue in assessee's favour has nowhere been rebutted from the department side. We thus see no merit in Revenue's instant sole substantive ground. The same stands rejected accordingly. Revenue's appeal is dismissed.

Summary

Issues:
Challenge to deletion of unexplained investment addition by Assessing Officer in the assessment order for A.Y. 2015-16.

Analysis:
The Revenue's appeal contested the correctness of the CIT(A)'s decision to delete an unexplained investment addition of ?1,76,00,000 made by the Assessing Officer in the assessment order for A.Y. 2015-16. The CIT(A) considered the facts, assessment order, and submissions by the appellant's Authorized Representative. The issue revolved around whether the Assessing Officer was justified in adding ?1,79,67,080 towards unexplained investment by the appellant in property acquisition. The Assessing Officer relied on seized material indicating the appellant and her late husband purchased properties. The CIT(A) noted discrepancies and directed the Assessing Officer to consider the investment in the hands of the late husband, not the appellant. The CIT(A) found the sources of the appellant's investment adequately explained and deleted the addition of ?22,00,000 representing her half share of the property. The CIT(A) also directed the deletion of the addition related to the late husband's investment, as he was separately assessed. Since the sources of funds were explained, the CIT(A) ruled against the addition of ?1,76,00,000. The lower appellate findings favored the assessee, and the Revenue's appeal was dismissed.

The CIT(A) thoroughly analyzed the appellant's submissions, the deceased husband's separate assessment, and the sources of funds for property acquisition. The CIT(A) correctly directed the Assessing Officer to consider the late husband's investments separately and not attribute them to the appellant. The CIT(A) found the appellant's sources of investment adequately explained through filed returns, balance sheets, and other supporting documents. The CIT(A) rightly deleted the addition of ?22,00,000 in the appellant's hands and the larger sum of ?1,76,00,000, as the funds' sources were clarified. The decision emphasized adherence to relevant provisions of the Income Tax Act and proper assessment procedures.

The lower appellate discussion highlighted the discrepancies in attributing the investments to the appellant instead of her late husband. The CIT(A) meticulously reviewed the appellant's financial statements, returns of income, and the circumstances surrounding the property acquisitions. The decision emphasized the importance of accurate assessment based on individual tax filings and proper consideration of investments made by the deceased husband. The CIT(A) decision provided a detailed rationale for deleting the additions and ensuring compliance with legal requirements.

In conclusion, the CIT(A) decision was well-founded in law and facts, considering the appellant's explanations, the deceased husband's separate assessment, and the overall context of the property acquisitions. The detailed analysis by the CIT(A) demonstrated a thorough understanding of the case and the applicable provisions of the Income Tax Act. The dismissal of the Revenue's appeal affirmed the correctness of the CIT(A)'s decision in deleting the unexplained investment additions and upholding the principles of fair and accurate tax assessment.