Father and Wife Funded Property: ITAT Deletes Unexplained Investment Addition

Saurabh Ramchandra Uthale Vs ITO (ITAT Mumbai)

Bank Records Show Father, Wife & Taxpayer Jointly Funded House Purchase: ITAT Deletes ₹55.20 Lakh Unexplained Investment Addition

Summary: ITAT Mumbai allowed the assessee’s appeal for AY 2016-17 and deleted an addition of ₹55,20,000 made under section 69 in respect of investment in a residential property jointly acquired by the assessee, his father and his spouse. The reassessment originated from information that the assessee had purchased immovable property for ₹80,00,000 during FY 2015-16. The AO accepted a housing loan of ₹32,00,000 but, after adopting aggregate payments of ₹87,20,000, treated the balance ₹55,20,000 as unexplained investment under section 69 read with section 115BBE because the contributions attributed to the assessee’s father and wife were considered insufficiently supported.

Before the Tribunal, the assessee filed additional evidence under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, including employment and remuneration records of his spouse, bank statements of the assessee, joint bank accounts, his father’s banking and pension records and documents relating to family funds. The Tribunal held that these documents went to the root of the controversy, admitted them and found that they corroborated transfers by all three co-owners towards acquisition of the property. It noted that the payments were traceable through banking channels, supported by the agreement, developer receipts, bank statements, TDS certificate and society share certificate in the names of all three owners.