Pradip Naik Vs ITO (ITAT Delhi)
AIR-Based Reopening Leads to Remand: Source From Abroad Explained? ITAT Sends NRI Investment Case Back for De-novo Assessment
Delhi ITAT ‘D’ Bench in Pradip Naik vs ITO (ITA No.1497/Del/2023, AY 2012-13, order dated 24-12-2025) set aside the orders of the lower authorities and remanded the matter to the AO for de-novo adjudication, holding that the source of NRI’s mutual fund investments requires fresh verification.
The assessee, an NRI engaged in business in Oman since 1985, did not file a return for AY 2012-13. Based on AIR information of bank deposits aggregating to ₹3.75 crore, AO reopened the assessment u/s 148 and completed it ex-parte u/s 144 r.w.s. 147, treating ₹3.25 crore invested in mutual funds as unexplained investment u/s 69B.
Before CIT(A), the assessee furnished bank statements, NRI account details, transaction statements and computation, explaining that the entire investments were made out of remittances from Oman through NRE accounts. Though CIT(A) called for a remand report, the AO merely stated that the assessee failed to explain the source of funds from Oman, and the addition was sustained.
ITAT observed that the assessee had placed relevant documentary material on record claiming foreign-source funds, and that the issue required proper examination at the assessment stage. In the interest of justice, Tribunal set aside both the assessment and appellate orders and directed the AO to pass a fresh order after duly considering the assessee’s submissions and evidences. The assessee was also directed to cooperate and file all necessary proofs regarding source of investment.
Accordingly, the appeal was partly allowed for statistical purposes.
Where an NRI claims foreign-sourced funds routed through NRE accounts, additions u/s 69B cannot be sustained without proper verification. AIR-triggered, ex-parte additions warrant remand when supporting evidence is on record.
FULL TEXT OF THE ORDER OF ITAT DELHI
