Poornima Sanjay Prabhu Vs ITO (ITAT Mumbai)
ITAT Mumbai Deletes Rs.1.76 Cr Addition – Joint Name in Sale Deed Irrelevant Without Contribution- Mere Joint Registration Not Proof of Investment
ITAT Mumbai deleted addition of Rs.1,76,16,200/- made u/s 69 towards alleged unexplained investment in a flat jointly purchased with husband. Tribunal held that assessee, an NRI homemaker with no income, had not contributed any funds & mere inclusion of her name in sale agreement could not justify taxing her
The assessee, residing in UAE with her husband for over two decades, was a non-resident for AY 2017-18. The flat purchased from Godrej Developers at Mumbai for Rs.1.76 crore was funded entirely from husband Sanjay Prabhu’s resources, including proceeds of sale of his Bangalore flat of Rs.88.5 lakh & his foreign salary of Rs.1.41 crore. Payments were made progressively through his NRE/NRO accounts & duly reflected in his Form 26AS along with TDS u/s 194IA. In contrast, assessee’s Form 26AS showed nil investment.
AO, relying solely on her name in the sale agreement, treated entire Rs.1.76 crore as unexplained investment u/s 69 & taxed u/s 115BBE. CIT(A) confirmed, holding that assessee had to establish trail of funds despite being second holder. ITAT, however, noted that all documentary evidence including Form 26AS, bank statements & affidavit of husband clearly established that investment was made exclusively from his resources. The decision of Calcutta HC in PCIT v. Nirmali Bhadra (450 ITR 517) was applied, holding that joint registration alone cannot justify addition unless contribution is proved. Accordingly, ITAT deleted entire addition of Rs.1,76,16,200/- & allowed appeal in full
