Sanobar Ajaz Ahmed Saudagar Vs ITO (ITAT Mumbai)
ITAT Deletes ₹80.10 Lakh Addition: Suspicion Cannot Replace Evidence When Property Investment Is Fully Explained
The Mumbai ITAT deleted an addition of ₹80.10 lakh made under Section 69 in respect of a residential property purchase, holding that once the assessee had established the identity of the contributor, financial capacity, source of funds and actual utilization towards property acquisition, the investment could not be treated as unexplained merely because certain remittance records from a Dubai Exchange Bureau were unavailable after nearly ten years.
The assessee had purchased a property for ₹1.40 crore. While the Assessing Officer accepted payments of ₹58.50 lakh reflected in the assessee’s bank account, he treated the balance ₹80 lakh as unexplained on the ground that direct remittance documents showing transfer of funds by the assessee’s husband, an NRI working in Dubai, were not furnished. An additional ₹10,000 was also added as unexplained investment.
Before the Tribunal, the assessee produced a complete reconciliation of the entire purchase consideration, supported by the husband’s passport and tax records, affidavit confirming payment on behalf of the assessee, Gift Deed, bank confirmation identifying him as the remitter, seller’s bank statement showing receipt of ₹80 lakh, documents relating to sale of the assessee’s earlier property, and evidence of the ₹10,000 pay order. The Tribunal noted that the Revenue had under no circumstances disputed the identity of the husband, his financial capacity, the receipt of funds by the seller, the genuineness of the sale transaction, or the authenticity of the documents produced.
The Tribunal observed that the entire consideration of ₹1.40 crore stood fully reconciled and supported by documentary evidence. It emphasized that the Revenue had not brought any material on record to suggest that the disputed funds represented the assessee’s own undisclosed income or that any accommodation arrangement existed. In such circumstances, the absence of one additional piece of evidence, namely old exchange bureau records, could not justify an addition under Section 69.
Relying on the principle that “suspicion, however strong, cannot substitute evidence”, the ITAT held that the assessee had fully discharged the burden cast upon her under Section 69. Accordingly, it directed deletion of the entire addition of ₹80.10 lakh, including the separate addition of ₹10,000.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
