Vashdev Darianomal Kalwani Vs Ward-2 (ITAT Ahmedabad)
NRI’s Overseas Funds for Property Purchase Cannot Be Treated as Unexplained Investment
The Ahmedabad Bench of the Income Tax Appellate Tribunal allowed the appeal of an NRI assessee for AY 2015-16 and deleted the addition of ₹56.15 lakh made as unexplained investment in property. The Tribunal noted that the assessee was a long-standing NRI residing in the UAE and had no taxable income in India except bank interest. It was conclusively demonstrated that the entire investment was funded through remittances from the assessee’s and his son’s Dubai bank accounts to India. Since the source of funds was clearly traceable to overseas income and legitimate bank transfers, the addition for unexplained investment was held to be unjustified and was deleted.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been preferred by the assessee against the order of the Income Tax Officer, Ward-2 Int.Tax, Ahmedabad, dated 19/01/2024 for the Assessment Year (AY) 2015-16.
2. The sole issue involved in this appeal is relating to the addition made by the lower authorities of Rs.56,15,441/- on account of unexplained investment in purchase of property.
3. The lower authorities have made/confirmed the impugned addition holding that the assessee could not explain the source of the aforesaid amount invested by the assessee in purchase of property. The Ld. Counsel for the assessee has explained before us that the assessee is a NRI, resident of UAE since 1993 and has not earned any income in India except the bank interest on amount of deposited in his NRI accounts. The Ld. Counsel has further demonstrated that the entire amount was transferred form the Dubai bank account of the assessee as well as that his son to the account of the assessee in India, which was further invested for the purchase of property. The Ld. Counsel, therefore, has explained that it is not a case of unexplained investment in property, rather, the amount in question was invested out of the income earned by the assessee at Dubai, which was transferred from Dubai bank account to the bank account in India and further invested in the property. Therefore, there is no justification on the part of the lower authorities in making/confirming the impugned addition. The same is ordered to be deleted.
