Rajesh Laxmichand Jain Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, has set aside the order of the Commissioner of Income Tax (Appeals) and remanded the case of Rajesh Laxmichand Jain back to the Assessing Officer (AO) for a fresh review. The dispute revolves around a tax addition of ₹1.10 crore that the AO had made, treating the entire investment in an immovable property as an unexplained investment under Section 69 of the Income Tax Act, 1961.
The case for the Assessment Year 2016-17 began when the assessee, an individual, failed to file a tax return. The AO, having information about the purchase of a property for a consideration of ₹1.10 crore, reopened the assessment. In response to the AO’s inquiry, the assessee explained that the property was jointly purchased with his wife. He provided a breakdown of the funding: a home loan of ₹77,62,926 from Axis Bank, a personal contribution of ₹37,94,057, and his wife’s contribution of ₹3,00,000.
While the assessee provided a copy of the loan sanction letter, the AO treated the entire ₹1.10 crore as unexplained investment, asserting that the assessee had failed to provide documentary evidence for the personal contribution. The First Appellate Authority (FAA) upheld the AO’s decision, stating that the documents provided by the assessee did not satisfactorily explain the source of the funds.
