Smt. Mita Chatterjee Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, has sided with an individual assessee, Smt. Mita Chatterjee, by deleting an addition of over ₹70 lakh that had been made to her income as an unexplained investment. The tribunal’s order established that when the source of funds for a joint property is fully accounted for by one of the co-owners, no addition can be made in the hands of the other, even if their name appears on the property deed.
The case originated from information provided by a sub-registrar, which indicated that Smt. Chatterjee had purchased an immovable property for ₹70,46,028 during the Assessment Year 2011-12. As she had not filed a tax return, the Income Tax Officer (ITO) initiated reassessment proceedings. However, despite several notices being issued, the assessee did not respond, leading the AO to complete the assessment ex-parte and add the entire property value to her income as an unexplained investment.
The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the AO’s decision, prompting her to approach the ITAT. During the tribunal hearing, the assessee’s counsel argued that the property, a flat in Kolkata, was purchased jointly with her husband, Shri Shyamlendu Chatterjee, but the entire investment was made by him from his own funds. The counsel presented a copy of the purchase deed, showing the husband as the primary investor.
