Raghunath Maruti Bhosale Vs ITO (ITAT Pune)
The ITAT, Pune (SMC) held that section 69 cannot be invoked when the source of investment stands explained, even if the assessee is unable to produce the financier. In this case (AY 2007-08), the assessee—a school teacher—was alleged to have made unexplained investment of ₹10.50 lakh towards purchase of a flat in a co-operative housing society.
The Tribunal noted that the entire payment was made through banking channel by demand draft, drawn directly by the society’s Chairman (Mr. Umesh D. Shinde) in favour of the housing society. This fact was admitted by the AO. Whether the payment was made on behalf of the assessee by the Chairman or directly arranged by the assessee, in both situations the source stood identified & explained. Crucially, the amount did not flow from the assessee’s own bank account, and the alleged financier himself was subject to search proceedings.
The Bench held that mere non-production of the financer cannot convert an explained banking transaction into unexplained investment. Accordingly, s.69 was held inapplicable, the addition of ₹10.50 lakh was deleted, and the assessee’s appeal was allowed, clarifying that the decision is fact-specific.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to the Assessment Year 2007-08 is directed against the order dated 23.07.2025 of Addl/JCIT(A), Prayagraj passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 16.03.2015 passed u/s.143(3) r.w.s.148 of the Act.
