Section 69 Addition Deleted on Sister’s Confirmed Bank Loan: ITAT Mumbai

Deepa Brijesh Singh Vs Income Tax Department (ITAT Mumbai)

Summary: The Mumbai Bench of the Income Tax Appellate Tribunal partly allowed the assessee’s appeal for Assessment Year 2015-16. The first dispute concerned an addition of ₹3,20,499 under Section 69 of the Income-tax Act, 1961, relating to a loan received by the assessee from her sister, Rachna Singh. The assessee had furnished the lender’s PAN, loan confirmation and bank statement evidencing receipt through banking channels. The Tribunal noted that these documents were already available before the Assessing Officer and that no defect or discrepancy had been identified in them. Considering the totality of the facts and the documents furnished, the Tribunal deleted the Section 69 addition and allowed Ground No. 1.

The second dispute concerned an addition of ₹14,60,000 under Section 56(2)(vii)(b), arising from the difference between the declared purchase consideration and the stamp duty value of an immovable property. The assessee relied upon a Memorandum of Understanding executed in March 2014, part payment of ₹1,50,000, possession and part performance, and the dilapidated condition of the property. The assessee also relied upon the Supreme Court decision in Sanjeev Lal Vs CIT, 365 ITR 389 (SC), concerning the creation of a right in personam through an agreement to sell. The Tribunal did not enter into the merits of this issue. Instead, it found that the CIT(A) had not correctly appreciated the factual position and relevant documents and restored the matter for fresh adjudication. The CIT(A) was directed to examine the March 2014 MOU/agreement, its terms, the date and mode of payment of ₹1,50,000, evidence concerning delivery or transfer of possession, part performance, and the applicability of Section 56(2)(vii)(b), Section 2(47) and Section 53A of the Transfer of Property Act, while considering the Sanjeev Lal decision. The CIT(A) was also directed to verify the factual observation concerning the alleged purchase of two apartments aggregating to ₹1,44,60,000 and record a clear finding on the correct factual position. Grounds 3 and 4, concerning reliance on the remand report and alleged violation of natural justice, were treated as consequential and allowed for statistical purposes, with directions for independent examination of the material, documents, valuation-related evidence and judicial precedents and reasonable opportunity of hearing. The appeal was consequently partly allowed and partly allowed for statistical purposes.