Neeta Chaudhary Vs ITO (ITAT Bangalore)
Faceless AO Ignored Evidence of Family Funding – Tribunal Restores Justice for Homemaker- Addition u/s 69A for Unexplained Investment Deleted – Proof of Source from Son’s Bank Account Ignored by AO & CIT(A)
Assessee, an individual homemaker, had not filed her return for AY 2016-17. AO noticed that she purchased a residential flat worth ₹70.64 lakh during FY 2015-16. On enquiry u/s 133(6), the seller confirmed receipt of payments by cheques & TDS of ₹70,600 was deducted. Since Assessee failed to satisfactorily explain the source of funds, AO reopened the assessment u/s 147 & treated ₹24,36,423 as unexplained investment u/s 69A, despite accepting that ₹42 lakh was paid by her husband, Shri Mishri Lal Chaudhary (employee of NTPC).
Assessee contended that the entire consideration was funded jointly by her husband & son Shishir Chaudhary through identifiable bank transactions. She filed bank statements & ITRs of both before AO, & also before CIT(A). However, both authorities ignored these evidences, holding that the source for ₹24.36 lakh allegedly contributed by the son remained unsubstantiated.
Tribunal verified the payment trail & found that the entire purchase consideration of ₹70.64 lakh was paid from the bank account of the son, through cheques ₹11,41,405 (Cheque No.157055 dated 01.10.2015, cleared 06.10.2015) & ₹52,24,418 (Cheque No.36623 dated 14.11.2015). Prior to these payments, the husband had transferred ₹42 lakh (on 31.08.2015) from his own account to the son’s account to enable the payments. Both transactions were duly reflected in the bank statements of the son, which were filed before AO within the prescribed time. Tribunal observed that both AO & CIT(A) failed to appreciate the evidence already on record & mechanically upheld the addition. Since the entire consideration for purchase of the flat was sourced from the son’s account funded by the husband, there was no unexplained investment in the hands of the Assessee. The addition of ₹24,36,423 made u/s 69A was unsustainable & hence deleted.
