ITO Vs Priya Barbana Farrokh Irani (ITAT Mumbai)
ITAT Deletes Section 69 Addition Because Foreign Remittance Trail Fully Explained Property Investment; Section 69 Addition Quashed Because Assessee Proved Source of Investment Through Banking Channels; ITAT Rejects Revenue Appeal Because Documentary Evidence Supported Property Purchase Funding; Section 69 Cannot Apply Because Property Investment Was Explained With Contemporaneous Evidence.
In this case, the Revenue challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting an addition of ₹2,00,91,780 made under Section 69 of the Income Tax Act for Assessment Year 2017-18. The Revenue also contended that the CIT(A) had admitted additional evidence in violation of Rule 46A and therefore the matter should have been restored to the Assessing Officer (AO).
The assessee had purchased an immovable property for a total consideration of ₹2,00,91,780. During reassessment proceedings under Section 147, the AO sought an explanation regarding the source of investment. The assessee explained that she was married to a British citizen employed abroad and that the entire investment had been funded through foreign remittances received from her husband through banking channels into her NRE account with HSBC Bank. She also submitted that payments towards the property had commenced from 2012 onwards and that a substantial portion of the investment related to earlier years. However, although this explanation was given during video conferencing proceedings, the supporting documents were not uploaded within the limited time granted by the AO. Consequently, the AO treated the entire investment as unexplained and added it under Section 69.
