Girishkumar C Amin HUF Vs ITO (ITAT Ahmedabad)
Karta’s Bank Account Explains HUF’s Property Purchase: ITAT Deletes ₹30 Lakh Addition
Explained Funds Cannot Become Unexplained Merely Because the Karta Paid
The Ahmedabad ITAT deleted an addition of ₹30 lakh under Section 69, holding that the source of a property investment made by an HUF stood explained through its Karta’s personal bank account. The Tribunal found that the purchase consideration had been paid directly to the sellers through cheques, the Karta had sufficient funds, and the supporting documents were already available before the Assessing Officer.
The ruling recognises that a Karta is not prohibited from advancing funds to an HUF. On the facts of this case, the absence of a separate HUF bank account when the property was purchased did not justify treating the investment as unexplained.
Property Purchase Triggered Reassessment
The assessee was a Hindu Undivided Family. Information available with the Department indicated that it had purchased a commercial property for ₹30 lakh during the previous year relevant to AY 2018-19. Since the HUF had not filed its original return, reassessment proceedings were initiated.
In response to the notice under Section 148, the assessee filed a return on 25 July 2022, declaring total income of ₹1,000.
