Tanveer Ahmed Siddiqui Vs ITO (ITAT Bangalore)
Joint Property, Entire Price Added to Husband: ITAT Orders Bank Verification
The reassessment
The Assessing Officer (AO) reopened the case of Tanveer Ahmed Siddiqui for assessment year 2016–17 after receiving information about bank transactions and a property purchase. Siddiqui explained that he ran a roofing-sheet business as proprietor of Karnataka Roofing and produced business records and bank statements for the cash deposits and withdrawals.
The assessment ultimately turned on the property. The AO noted that Siddiqui and his wife, Zeeshan Naji, had purchased it jointly. Siddiqui’s balance sheet recorded ₹37,71,187 as his share of the property, but the AO added the entire ₹75,42,374 under Section 69 as an unexplained investment. The CIT(A) confirmed the addition, saying that adequate documentary evidence of the payment had not been produced.
The Bangalore ITAT found that the registered deed, balance sheet and Federal Bank entries required proper consideration. It directed the AO to verify the identified bank transactions and, if satisfied, delete the addition. The appeal was allowed on those terms.
Why the 50% share mattered
Siddiqui’s first objection was to being assessed for 100% of a jointly held property when he had recorded 50% in his books. The balance sheet showed the property as a fixed asset at ₹37,71,187. The Tribunal noted that the AO knew of this disclosure but nevertheless added the full amount in Siddiqui’s hands.
Joint ownership did not, by itself, explain the source of the purchase money. The Tribunal therefore examined how the seller had been paid. Siddiqui said business funds had been transferred through bank accounts and payments made from Federal Bank accounts. His explanation also stated that the balance relating to the co-owner was debited to his wife’s account.
This distinction is important. The names on a sale deed show legal ownership, while the bank and ledger trail helps establish who funded the purchase and how it was accounted for. Both had to be examined before treating the entire value as Siddiqui’s unexplained investment.
What the deed and bank statements showed
On examining the registered deed, the Tribunal recorded a sale consideration of ₹70,75,000 and payments on 1 August 2015. These comprised cheques of ₹44,64,250 and ₹25,40,000 from two Federal Bank accounts, with ₹70,750 representing the 1% tax deducted on the sale consideration. The Federal Bank statements reflected corresponding withdrawals of the two cheque amounts on that date.
The Tribunal considered these documents significant evidence of the mode of payment. It disagreed with the CIT(A)’s statement that Siddiqui had failed to produce documentary evidence, noting that the bank accounts and registered deed had been produced. The AO’s addition had also failed to give due weight to the property share already appearing in Siddiqui’s balance sheet.
The Tribunal therefore regarded the addition of the whole property value in his hands as unjustified on the facts placed before it. It did, however, leave a specific verification task with the AO: check the identified Federal Bank entries and, once satisfied, delete the addition.
The relief is conditional
The operative direction should be read precisely. The ITAT did not simply order an unconditional deletion of ₹75,42,374. It said that the addition could not be sustained in Siddiqui’s hands on the documentary material discussed, but directed the AO to verify the relevant bank entries before deleting it. The result depends on that verification.
The order also contains inconsistent descriptions of the property transaction in its earlier narrative. One passage refers to a purchase on 27 April 2016 for a different amount, while the Tribunal’s direct examination of the registered deed in paragraph 8 records the joint purchase and payments on 1 August 2015. For the purpose of understanding the actual finding, the deed-based discussion is the relevant passage. The assessment records and deed should be checked when implementing the order.
Author’s comment
This case illustrates why a joint purchase cannot be assessed by looking only at the headline value of the property. The AO must reconcile the deed, each co-owner’s share, the balance-sheet entries and the actual payment trail. An investment is not unexplained merely because payments pass through a proprietor’s bank account; equally, a 50% title share does not automatically settle the question of who supplied the funds.
The Tribunal’s direction is practical and limited. It identified two Federal Bank withdrawals corresponding to the cheques in the sale deed and sent that precise point to the AO for verification. Siddiqui should therefore place the complete statements, transfer trail from the business accounts, ledger entries for his own 50% share and the amount debited to his wife’s account before the AO. If those records reconcile, the Section 69 addition is to be deleted under the Tribunal’s direction.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal by the assessee challenges the appellate order dated 10 December 2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, for assessment year 2016–17. By that order, the NFAC dismissed the assessee’s appeal against the reassessment order dated 9 March 2024, passed by the Assessment Unit of the Income Tax Department (the learned AO) under section 147 read with section 144B of the Income-tax Act, 1961 (the Act).
2. The Assessee has raised the following grounds of appeal:
1. That the impugned order passed by respondent officer is liable to be set aside in so far as the same is incorrect, Improper, and opposed to the fact & circumstances of case.
2. That the respondent officer is erred in making addition of Rs. 75,42,374.00 to the declared income without giving due consideration to the fact that the payment has been made through the bank channel and out of the business from i.e. transfer to the Karnataka Roofing bank account.
3. That the assesse hold 50% share in said property, it was evident also from the sale deed, buyer include 2 names Tanveer Ahmed Siddiqi and Zeeshan Naji, he hold merely 50% share declared in said property which is declared in the balance sheet, copy of the sale deed is attached herewith.
4. It was surprised to note that learned respondent officer has made an addition of Rs.75,42,374.00, though assesse hold 50% share in the said property which was duly declared in the assets side of the balance sheet under the head Fixed Assets as property at No.30, Hutchins Road, Banagalore Rs. 37,71,187.00. Hence impugned addition is liable to be deleted.
5. Just to facilitate the seller’s request separate bank account has been opened in Federal Bank at Banaswadi Branch, Banagalore the details of payment are as under
a. Tanveer Ahmed Siddiqi bearing cheque No. 157654 dt. 01.08.2015 amounting to Rs. 44,64,250.00.
b. Zeeshan Naji bearing cheque No.149141 dt. 01.08.2015 amounting to Rs. 25,40,000.00, both copies of bank account are enclosed herewith, therefore the aforesaid impugned addition is liable to be deleted.
6. That the observation made by the respondent officer that payment made to property was not explained, it is infact factually incorrect the payment has been made out of business fund from the State Bank of India, ICICI Bank belong to Karnataka Roofing Prop. Tanveer Ahmed Siddiqi, the copies of the bank accounts are enclosed herewith. Therefore, the impugned addition is to be deleted.
7. Further I would like to clarify that fund was transferred from State Bank of India and ICICI Bank to Federal Bank, Banaswadi Brach, Bangalore then the cheque has been issued to the seller, the same has been mentioned in the sale deed. Therefore, the opinion of officer in holding that payment is unexplained is factually incorrect. Hence impugned addition is liable to be deleted.
8. Since the payment are made through the business account of the proprietor i.e. Karnataka Roofing and is being declared in the books of account and also depicted in the Balance Sheet Rs. 37,71,187.00 being 50% share held by the proprietor hence impugned addition is deleted.
9. That the appellant pray for leave to add, delete and to amend any grounds of appeal.
10. That for those grounds or any other grounds those may be urged at the time of hearing of this Appeal appellant pray before your honor to delete the impugned addition or to pass such an order as your honor may please in the interest of natural justice.
3. Briefly, the assessee is an individual who did not initially file a return of income. Information indicated taxable income arising from cash deposits of ₹5,232,300, cash withdrawals of ₹1,803,300 from a current account, and the purchase of property for ₹3,350,000. A notice under section 148 of the Income-tax Act, 1961 was issued on 28 March 2023. In response, the assessee filed a nil return on 20 April 2023. A notice under section 143(2) sought details of these transactions, but the assessee did not respond. Further notice under section 142(1) was therefore issued, and the assessee replied on 18 November 2023. He stated that his sole source of income was a roofing-sheet business and reported turnover of ₹2,57,56,600 and income of ₹1,048,247. He also submitted the tax audit report and bank statements, explaining that most sales were in cash and that the receipts were deposited into the bank account. He stated that the withdrawals were mainly for household expenses, with the balance deposited into a sister concern’s account. He further explained that a residential property had been purchased jointly with his wife for ₹30,50,000 on 27 April 2016, and submitted the purchase deed, contending that the transaction was not relevant to the year under consideration.
4. The Assessing Officer found that the assessee had deposited cash of ₹5,232,300 and withdrawn ₹1,803,300, transactions supported by the ledger account, purchase register, tax invoices, and balance sheet. The assessee also claimed that the purchase of immovable property for ₹3,050,000 pertained to assessment year 2017–18, not assessment year 2016–17. Although the property was jointly purchased with his wife for a total consideration of ₹7,542,374, the assessee recorded only ₹3,771,187 as a fixed asset in his balance sheet. When questioned, he repeated his earlier explanation. The Assessing Officer was not satisfied and, noting that the assessee had stated that he provided consideration for the property, added the entire amount of ₹7,542,374 under section 69. Accordingly, the total income was assessed at ₹7,542,374 by a reassessment order dated 9 March 2024 under section 147 read with section 144B of the Act.
5. The assessee appealed to the learned CIT(A), reiterating that he and his wife had jointly purchased the property for ₹7,542,374 and that he had accounted for his share of ₹3,771,187. Therefore, he could not be taxed on the entire consideration of ₹7,542,374. He also stated that the payments were made through State Bank of India and ICICI Bank on 23 April 2015 and 1 July 2015. The source of such payment is the sum transferred from the Federal bank Limited account of the assessee. In the absence of adequate documentary evidence, the learned CIT(A) found no error in the Assessing Officer’s order, confirmed the addition, and dismissed the appeal.
6. Aggrieved, the assessee appealed to us and filed a 14-page paper book. Pages 1–11 contain a copy of the registered sale deed; page 12 contains the balance sheet; and the paper book also includes a copy of the Federal Bank statement. The learned authorised representative, Shri Kashinath Kalmatt, Advocate, was heard and reiterated the submissions made before the lower authorities.
7. The learned Senior Departmental Representative, Shri Pradeep S., Additional Commissioner of Income Tax, was also heard and supported the orders of the lower authorities.
8. We have carefully considered the rival contentions and examined the orders of the lower authorities. The sale deed shows that, on 1 August 2015 at Bangalore, the assessee, Mr. Tanveer Ahmed Siddiqui, and his wife, Mrs. Zeeshan Naji, jointly purchased the property for ₹7,075,000. Of this amount, ₹2,540,000 was paid by cheque No. 149191 dated 1 August 2015 from a Federal Bank Ltd. account, ₹4,464,250 by cheque No. 157654 dated 1 August 2015 from another Federal Bank Ltd. account, and ₹70,750, representing 1% deducted at source on sale consideration, was also paid on that date. The assessee’s balance sheet, at page 14, records the Bangalore property at serial No. 30 for ₹3,771,187. The Federal Bank statements show withdrawals of ₹4,464,250 from account No. 737 and ₹2,540,000 from account No. 3300 on 1 August 2015. It is therefore apparent that the consideration was paid from the assessee’s Federal Bank accounts through his proprietary concern. As the assessee holds a 50% share in the property, his share is reflected as a fixed asset, while the balance is stated to have been debited to his wife’s account as co-owner. On these facts, the addition is unjustified.
9. Although the Assessing Officer knew that the assessee had disclosed ₹3,771,187 as his 50% share, he added the entire value of the property.
10. The learned CIT(A) confirmed the addition solely because the assessee allegedly failed to produce documentary evidence, even though the assessee produced the bank accounts and the sale deed before him.
11. We have now examined the sale deed, the mode and sources of payment recorded therein, and the Federal Bank statements for both transactions in the assessee’s name. Accordingly, the addition cannot be sustained in the assessee’s hands. Nevertheless, we direct the Assessing Officer to verify the identified entries in the assessee’s Federal Bank statements and, if satisfied, to delete the addition.
12. In the result, the assessee’s appeal is allowed as indicated above.
Order pronounced in the open court on 29th September, 2026.
