ITAT Remands Additions on Property, Bank Credits & Mutual Fund Investments

The assessee filed her return of income for AY 2018-19 in response to a notice under Section 148, declaring NIL income. The Assessing Officer noted that she had purchased immovable property worth Rs. 71.72 lakh, comprising purchase cost, stamp duty, and registration charges, but failed to properly explain the source. The AO treated the entire investment as unexplained under Section 69. He further added Rs. 2.21 lakh being unexplained credits in her HDFC Bank accounts under Section 69A, and Rs. 21,586 invested in Birla Sun Life Mutual Fund as unexplained under Section 69.

CIT (A) Held: On appeal, the CIT(A) accepted that Rs. 55 lakh came from a housing loan and Rs. 13 lakh had been invested in an earlier year, granting partial relief. The balance of Rs. 3.72 lakh was confirmed as unexplained. Additions of Rs. 2.21 lakh (bank credits) and Rs. 21,586 (mutual fund) were also upheld as the assessee had not substantiated her explanation with proper evidence.

Issue Raised: Whether the additions for unexplained property investment, bank credits, and mutual fund investment were justified when the assessee claimed support from loans, gifts, and transfers from her husband’s account.

ITAT Held: The Tribunal noted that the assessee had produced confirmation from her mother regarding a cash gift of Rs. 2 lakh and also argued that the property was jointly held with her husband. Considering these aspects, the ITAT held that the AO must re-examine the balance investment of Rs. 3.72 lakh. Thus, the issue was remanded for fresh adjudication.

On the bank credits of Rs. 2.21 lakh and mutual fund investment of Rs. 21,586, the assessee submitted that the amounts were received from her husband’s bank account. Since these details had not been properly verified by the tax authorities, the Tribunal remitted these matters back to the AO for de novo consideration as well. Thus, the appeal was allowed for statistical purposes with all three additions restored to the AO.

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