2024 (11) TMI 1117 - AT - Income Tax

Unexplained investment u/s. 69 - Assessee has failed to explain the nature of source of the impugned amount - Onus to prove - HELD THAT - The assessee has substantiated the nature of source of the investment over and above the sale consideration paid by him for the purchase of property along with the other incidental charges incurred by him at the time of the said purchase. We are of the considered view that the assessee has discharged the onus of proof casted upon him to explain the source of the investment made by him, as per the provisions of the I.T. Act. We, therefore, deem it fit to allow the grounds of appeal raised by the assessee and hereby direct the ld. A.O. to delete the addition made in the hands of the assessee.

Summary

Issues:
1. Jurisdiction of the Dispute Resolution Panel and Assessing Officer
2. Addition of unexplained investment under section 69 of the Income Tax Act
3. Levy of interest under sections 234A, 234B, and 234C

Jurisdiction of the Dispute Resolution Panel and Assessing Officer:
The appeal was filed challenging the final assessment order for the Assessment Year 2015-16 based on the direction of the Dispute Resolution Panel (DRP). The appellant contended that the orders were without jurisdiction, contrary to law, and prejudicial to their interests. The Assessing Officer had added Rs. 28,22,380 as unexplained investment under section 69 of the Income Tax Act. The appellant argued that the provisions of section 69 were not applicable, and they had provided sufficient documentary evidence to explain the source of the investment. The DRP's decision was also challenged on the grounds of lack of opportunity to substantiate the source of the investment.

Addition of unexplained investment under section 69 of the Income Tax Act:
The case involved a non-resident individual who purchased an immovable property, triggering a reassessment. The Assessing Officer proposed an addition of Rs. 3,98,62,195 as unexplained investment, which was later revised by the DRP to Rs. 28,22,380. The appellant argued that the source of the investment was explained through salary income, interest income, provident fund settlement, and transfers from NRE and NRO accounts. The appellant provided detailed evidence of payments made towards the property purchase, including other related charges. The Tribunal found that the appellant had substantiated the source of the investment and directed the Assessing Officer to delete the addition made.

Levy of interest under sections 234A, 234B, and 234C:
The appellant objected to the levy of interest under sections 234A, 234B, and 234C of the Income Tax Act. However, the judgment did not provide detailed analysis or resolution regarding this issue.

This judgment primarily focused on the jurisdiction of the Dispute Resolution Panel and Assessing Officer, as well as the addition of unexplained investment under section 69 of the Income Tax Act. The Tribunal ultimately ruled in favor of the appellant, finding that the source of the investment had been adequately explained, leading to the deletion of the addition.