G Trishula Devi, Hyderabad vs Assessee

Smt. G. Trishula Devi, vs. Income Tax Officer, Ward - Hyderabad 5(1), Hyderabad.

PAN - ABTPG 7930 K (Appellant) (Respondent)

Assessee by : Shri A.V. Raghuram Revenue by : Shri Rajat Mitra

Date of hearing 04-02-2015 Date of pronouncement 13-02-2015

O RDE R

PER SAKTIJIT DEY, J.M.:

The aforesaid appeal of assessee is directed against order dated 30/06/2014 of ld. CIT(A)-V, Hyderabad pertaining to AY 2009-

10.

2. The only issue arising for consideration is in relation to addition of an amount of Rs. 25,30,336 as unexplained investment.

3. Briefly the facts relating to the issue in dispute are, assessee is an individual. For the AY under consideration she filed her return of income on 31/07/2009 declaring total income of Rs. 8,12,650. During the relevant FY, assessee along with three other persons entered into a registered sale deed vide sale deed No. 340 dated 21/01/2009 with a number of companies, including M/s Maytas Properties Ltd., for purchasing a property consisting of semi-finished house with plinth area of 3364 sq.ft. on a Plot of 467 sq.yds. in plot No. 125, Hill 2 ITA No. 1613/Hyd/2014 Smt. G. Trishula Devi

Country situated in Survey Nos. 192P to 198P, 201P and 282P of Bachupally village, Qutubullapur Mandal, R.R. District for a consideration of Rs. 53,01,628. On the very same day, assessee and other coowners also entered into a separate agreement registered as document No. 341 dated 21/01/2009 with M/s Maytas Properties Ltd. for construction of the semi-finished house with plinth area of 3364 sq.ft. for an agreed consideration of Rs. 56,84,654. The construction agreement also provided the finished property will have to be handed over to assessee and other coowners by 31/01/2009. On examining these facts, AO called upon assessee to explain the source of investment made in purchase as well as construction of house property. After verifying the information submitted by assessee, it was noticed by AO that total investment in the property claimed to have been made by assessee and other three persons was to the tune of Rs. 1,21,21,323. AO taking the aforesaid total investment into consideration, computed assessee's share in the total investment at Rs. 30,30,336, the source of which, assessee was called upon to explain. As noted by AO, assessee could prove the source of investment to the extent of Rs. 5 lakh being outgoing from the bank account. However, as noted by AO, assessee could not explain the source of investment of balance amount of Rs. 25,30,336. AO, therefore, treated the same as unexplained investment of assessee and added to her income for the impugned AY. Being aggrieved of such addition, assessee preferred appeal before ld. CIT(A).

4. Before the ld. CIT(A), though, assessee furnished the source of investment with supporting evidence and on the basis of submissions made by assessee, ld. CIT(A) also called for a remand report form AO. Ultimately, however, ld. CIT(A) confirmed the addition by observing that assessee was not able to explain with corroborative evidence the source of investment made by her.

3 ITA No. 1613/Hyd/2014 Smt. G. Trishula Devi

5. Ld. AR referring to the submissions made by assessee before ld. CIT(A), submitted that the source of investment of Rs. 1,21,21,323 was not only explained before ld. CIT(A) as well as during the remand proceeding before AO, but, supporting evidence to substantiate the source of investment was also submitted. Ld. AR submitted, the fact that assessee along with other co-owners have obtained a housing loan from SBI for an amount of Rs, 98,49,852 was totally ignored both by AO as well as ld. CIT(A). In this context, ld. AR drew our attention to the sanction letter dated 28 th April, 2006 of SBI granting term loan of Rs. 99 lakh. Ld. AR also referred to the accounts statement of M/s Maytas Properties Ltd to explain the source of investment. Ld. AR submitted that every single payment made to M/s Maytas Properties Ltd. was through account payee cheque and from explainable sources. Therefore, there is no reason to disbelieve the explanation of assessee on mere presumptions and surmises and treat the investment made by assessee to be from unexplained sources.

6. Ld. DR, on the other hand, submitted that during the assessment proceeding, assessee did not produce the documents called for by AO, hence, in absence of supporting evidence to explain the source of investment, AO treated the amount of Rs. 25,30,336 as unexplained investment.

7. We have considered the submissions of the parties and perused the orders of revenue authorities as well as other materials on record. As can be seen from the facts and materials on record, AO has not disputed the fact that the total investment made in purchase/construction of property in question is Rs. 1,21,21,323. It is also not disputed that the aforesaid investment was made by four persons including assessee. As far as source of investment is concerned, AO has observed that out of assessee's share of Rs. 30,30,336, only Rs. 5 lakh is explained. However, on going through the materials on record, it is to be noted that assessee in course of 4 ITA No. 1613/Hyd/2014 Smt. G. Trishula Devi

proceeding before ld. CIT(A) as well as during the remand proceeding before AO has explained the source of investment as under:

i) paid by the assessee Rs. 5,00,000 ii) Other joint owners Rs.17,71,471

iii) SBI Housing loan in joint name Rs.98,49,852 Rs.1,21,21,323 ============

The fact that assessee along with other co-owners have availed loan of Rs. 98,49,852 from SBI is proved not only from the sanction letter dated 28/04/06 of SBI, a copy of which is placed at page 9 of paper book, but final account statement of M/s Maytas Properties Ltd. at page 12 of paper book also clearly proves this fact. It is also a fact that the entire payment made to M/s Maytas Properties Ltd. towards construction of the property is, though cheques. Though, the evidence relating to sanction of loan to the extent of Rs. 98,49,852 was before ld. CIT(A) as well as before AO, but, for some strange reasons they have totally ignored that fact. As can be seen, if housing loan taken from SBI is taken into consideration, then, the entire source of investment stand explained. In the aforesaid view of the matter, in our opinion, the addition made on account of unexplained investment cannot be sustained. Accordingly, we hold that the addition made of Rs. 25,30,336 is without any basis, hence, deserves to be deleted. We direct AO, to do so.

8. In the result, appeal of assessee is allowed.

Pronounced in the open court on 13/02/2015.

Sd/- Sd/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated: 13 th February, 2015 5 ITA No. 1613/Hyd/2014 Smt. G. Trishula Devi

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Copy to:-

1) Smt. G. Trishula Devi, C/o A.V. Raghuram, Advocate, 610, Babukhan Estate, Basheergab, Hyderabad - 5 00 020.

2) ITO,Ward - 5(1), Hyderabad

3) CIT(A)-V, Hyderabad

4) CIT-IV, Hyderabad

5) The Departmental Representative, I.T.A.T., Hyderabad.