Sarang Avinash Kamtekar Vs ITO (ITAT Pune)
CIT(A) Should Have Awaited AO’s Remand Report After Admitting Additional Evidence: Pune ITAT Restores Property Investment Addition
The assessee purchased immovable property for approximately ₹2 crore and received technical fees of ₹8,18,300 during AY 2018-19, but did not originally file a return of income. In response to reassessment proceedings, he filed a return declaring income of ₹4,75,220.
The assessee explained that the property was purchased from accumulated savings and secured and unsecured loans obtained from friends and relatives. However, due to inadequate compliance and supporting evidence, the AO made the following additions:
- ₹2,12,30,100 as unexplained investment under section 69; and
- ₹4,09,150 as professional income estimated under section 44ADA.
The total income was assessed at ₹2,21,14,470.
During the appellate proceedings, the CIT(A) admitted additional evidence and granted partial relief. However, it rejected unsecured loans of ₹51,55,000 and accumulated savings of ₹10,75,100 claimed as sources for the property purchase.
Before the ITAT, the assessee produced confirmations and income-tax particulars of the lenders. It was further pointed out that, after admitting the additional evidence and calling for a remand report, the CIT(A) passed the order without waiting for the AO’s comments or remand report.
The Tribunal held that the assessee deserved another opportunity to establish the sources of the property investment. Accordingly, the additions sustained by the CIT(A) were set aside and the disputed issues were restored to the AO for fresh adjudication after considering the evidence and granting an adequate opportunity of hearing.
List of Cases Discussed / Relied Upon
- Sarang Avinash Kamtekar Vs ITO (ITAT Pune)
FULL TEXT OF THE ORDER OF ITAT PUNE
The assessee has filed the appeal against the order of the CIT(A)/NFAC Delhi passed u/sec 250 of the Income Tax Act. The assessee has raised the grounds of appeal challenging the order of the CIT (A) partly sustaining the addition made by the Assessing Officer.
2. At the time of hearing, the Ld. Ld.AR submitted that there is a delay of 17 days in filing the appeal before the Hon’ble Tribunal and the delay was not intentional and filed the affidavit of the assessee for condonation of delay. On consideration of the facts and information mentioned in the affidavit, there is a reasonable cause explained and the Ld. DR has no specific objections. Accordingly, the delay is condoned and the appeal is admitted.
3. The brief facts of the case are that, the Assessing Officer(A.O) has received information as per the Risk Management parameters set by the CBDT that the assessee has purchased the immovable property of Rs. 2,00,00,000/- and received technical fees of Rs. 8,18,300/- during the F.Y. 2017-18 and the assessee has not filed the return of income for the A.Y. 2018-19. The A.O has reason to believe that the income has escaped assessment and fallowed the due procedure as per Section 148A of the Act, and issued notice u/sec 148 of the Act on 02.04.2022, in compliance to the notice, the assessee has filed return of income disclosing a total income of Rs. 4,75,220/- on 7.05.2022. Subsequently, the notice under Section 142(1) of the Act was issued on various dates to explain the sources of purchase of immovable property and the details of technical fees. The A.O found that there is no proper compliance on these disputed issues, though the assessee has filed the partial submissions explaining that the property was purchased out of accumulated savings, secured and unsecured loans from friends and relatives and the assessee has received technical fees from HDFC Ltd and TDS was deducted. Whereas the A.O was not satisfied with explanations and issued notice u/sec133 (6) of the Act on the HDFC Ltd and SRO for the details. Finally, the A.O find that the assessee could not explain sources of acquisition of the property and made addition of unexplained investment u/sec69 of the Act of Rs.2,12,30,100/- and similarly made addition of undisclosed income from profession calculated u/sec44ADA of the Act of Rs. 4,09,150/- and assessed the total income of Rs. 2,21,14,470/- and passed the order u/sec 147 r.w.s. 144B of the Act dated 18.01.2024.
4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). whereas the CIT(A) has considered the grounds of appeal, statement of facts, finding of the A.O, submissions and additional evidences filed by the assessee but was not satisfied with the details and explanations on unsecured loans obtained for acquisition of the property to the extent of Rs.51,55,000/- and similarly rejected the source of accumulated savings of Rs.10,75,100/- and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon’ble Tribunal.
5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in partly sustaining unsecured loans obtained for acquisition of the property overlooking the various factual aspects and the information. Further upon admission of additional evidence by the CIT(A), when the remand report was called from the A.O, the CIT(A) has not waited for comments/report of the A.O and passed the order. The ld.AR submitted that assessee is a good case on merits and shall substantiate with material evidences and prayed for an opportunity to explain before the lower authorities. Per contra, the Ld. DR supported the order of the CIT(A).
6. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in partly sustaining unsecured loans from friends and relatives obtained for acquisition of the property overlooking the various factual aspects and the information. The Ld.AR demonstrated the confirmations, and income tax particulars of lenders placed at page37 to 48 of the paper book. The Ld.AR emphasized that upon admission of additional evidence under rule 46A of the IT Rules by the CIT(A), when the remand report was called from the A.O, the CIT(A) has not waited for comments/report of the A.O and passed the order partly sustained the additions. Therefore, we considering the facts, circumstances, submissions and principle of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) to the extent of additions sustained by the CIT(A) and remit the disputed issues to the file the Assessing Officer for adjudication afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in considering the information. And we allow the grounds of appeal of the assessee for statistical purposes.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 19th August, 2026.
