Varun Dewan Vs ITO (ITAT Delhi)
ITAT Delhi deletes ₹11.18 Lakh addition – Assessee proves Property Investment Sources with Loan & Business Funds; Delhi ITAT has deleted an addition of ₹11,18,250 made as unexplained investment in property. Tribunal held that where Assessee produces credible evidence of loan transactions & business funds, the addition under the Income Tax Act cannot be sustained.
Assessee had purchased immovable property jointly during FY 2011-12 for ₹39,50,000 plus stamp duty of ₹2,86,500. AO, based on AIR information, reopened the case by issuing notice u/s 148. While examining the transaction, AO noted that Assessee had availed a housing loan of Rs 20 loan from Bank. However, for the balance investment of ₹22,36,500, AO held that assessee’s share of ₹11,18,250 remained unexplained & added the same to income. CIT(A) sustained the addition, dismissing assessee’s appeal.
Assessee explained the investment sources as follows:
- ₹4,76,500 – from his proprietorship concern, duly supported by bank records.
- ₹17,50,000 – out of a loan of ₹25,00,000 taken from Shri Sushil Kumar Bhatia, supported by Loan agreement executed on stamp paper,,Cheque copy issued in assessee’s favour & Bank statement of Shri Bhatia showing the transaction.
It was also pointed out that Shri Sushil Kumar Bhatia was an income tax assessee & had sold a house property for ₹82,00,000, thus had ample capacity to advance the loan. Despite this, the lower authorities brushed aside the evidences & sustained the addition.
