The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) partially upheld the addition of RS.79.35 lakh as unexplained investment related to the property purchase made by the assessee and granted him additional time to submit further documentation.
Bhavin V. Maniar,the appellant-assessee, had purchased a property for Rs. 79,35,000. Initially, the Assessing Officer (AO) proposed an addition of Rs. 1,58,70,000 in the draft assessment order. However, the Dispute Resolution Panel (DRP) found that the AO had incorrectly suggested double the investment amount and subsequently reduced the addition to Rs. 79,35,000.
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The assessee asserted that he financed the purchase partly through a loan of Rs. 49,55,650 from HDFC Bank, with the remaining amount sourced from his personal funds and assistance from his father. The Departmental Representative (DR) contended that the assessee had not provided adequate documentation to demonstrate the legitimacy of the bank loan or the source of funds that were allegedly transferred from the USA to India. The DR specifically pointed out that the bank advice was insufficient as evidence of the funds’ authenticity.
The tribunal reviewed the case and examined a comprehensive paper-book consisting of 285 pages. It noted that the documents included a sanction letter for the Rs. 50 lakh loan, which had been disbursed to the property builder, along with transaction details.It confirmed that the transfers of Rs. 14 lakhs and Rs. 5 lakhs from the assessee’s bank account in the USA to his HDFC account in India were valid.The remaining Rs. 10 lakhs, which the assessee claimed to have received from his father, posed an unresolved issue.
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The two member bench comprising Siddhartha Nautiyal(Judicial Member) and Dr.BRR Kumar(Accountant Member) acknowledged the difficulties the assessee faced in obtaining necessary bank statements due to his father’s death and his own status as a Non-Resident Indian (NRI). It allowed the assessee three months to submit the relevant documentation regarding this amount, permitting the AO to conduct any necessary inquiries.
In conclusion, the tribunal partly allowed the appeal, affirming Rs. 69,35,000 as substantiated while requiring additional proof for the outstanding Rs. 10 lakhs.
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