Umar Faruk Suleman Asmal Vs ITO (ITAT, Surat Bench)
Rule 46A Is Not a Locked Door—Bank Statements Explaining ₹36.23-Lakh Property Investment Must Be Examined Before Addition Is Confirmed
Summary: The Surat Bench of the ITAT has held that the CIT(A) ought to have admitted and examined additional evidence comprising the assessee’s bank statement, the lender’s bank statement and the rent-income ledger before deciding an addition of ₹36,22,960 u/s 69. Since these documents went directly to the sources claimed for the investment, their wholesale rejection prevented a proper adjudication of the controversy. The matter was consequently restored to the CIT(A) for verification and a fresh decision on merits.
The assessee, Umar Faruk Suleman Asmal, was engaged in agricultural activities and in letting out a shed used for storing agricultural produce. For AY 2014-15, he filed a belated return u/s 139(4) on 29.03.2016, declaring a total income of ₹4,53,130. The assessee claimed to have maintained books of account, vouchers and other supporting records.
During the relevant year, the assessee purchased a share in an immovable property for ₹36,22,960. When called upon to explain the source, he stated that the investment was made out of his own available funds.
The explanation consisted of two components. An amount of ₹17 lakh was claimed to represent repayment of an earlier loan advanced to Ishwarbhai Parsottambhai Patel. The balance amount of ₹19,22,960 was claimed to have been met out of the assessee’s accumulated capital, derived from agricultural activities, rental income and other available funds.
