Nehal Ramanbhai Patel Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad deletes ₹26.49 Lakh addition u/s 69A – Foreign Remittances in NRE Account accepted as genuine source for property purchase
Ahmedabad ITAT deleted an addition of ₹26,49,250/- made as unexplained money under section 69A in respect of investment in immovable property, holding that the assessee had satisfactorily proved that the source was foreign-earned income remitted through legitimate banking channels into his Non-Resident External (NRE) account.
Assessee, an NRI engaged in pharmacy business in the USA for over a decade, had not filed a return for AY 2013–14. AO reopened the case on information that he purchased property worth ₹25,24,250 plus ₹1,25,000 stamp duty (total ₹26,49,250). Assessee explained that he held 25% share in the property jointly with his father, funded entirely from a joint NRE a/c with Bank of Baroda through foreign remittances from USA. AO held no supporting evidence was filed for the source & treated the amount as unexplained money u/s 69A. CIT(A) dismissed the appeal ex parte.
Before ITAT, Assessee filed an affidavit explaining delay in filing appeal (due to residing abroad & CA’s inaction) & produced a paper book with Cheque-wise details of payments from NRE account, Bank confirmation of wire transfers from the USA, US income tax returns for 2010–2012 & Property purchase deed & joint ownership details. He contended that these documents were filed earlier before CIT(A) but were not considered due to migration to faceless regime.
