TaxTMI 
TaxTMI 
2025 (1) TMI 1395
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.... in the hands of the assessee for the aforementioned reason: i) Cash deposit in bank account remaining unexplained, under section 69A of the Act, of Rs. 35,67,644/-; ii) Unexplained investment in immovable property, under section 69 of the Act ,of Rs. 2,00,21,362/-; iii) Unexplained investment by way of stamp duty charges and registration fees of Rs. 26,19,000/- for the aforementioned immovable property. iv) Unexplained cash deposit in bank account of the assessee of Rs. 2,07,440/-, under section 69A of the Act. 4. It was contended that the AO had proposed the above additions in a draft order passed in terms of provisions of section 144C(3) of the Act, to which the assessee had filed objections to the DRP, and the DRP accordingly, after considering the contentions of the assessee rejected all the objections of the assessee in its order passed under section 144C(5) of the Act. The AO accordingly thereafter passed final order in accordance with the directions of the DRP making all the aforementioned additions to the income of the assessee. Aggrieved by the same the assessee has come up in appeal before us raising the following grounds: ....
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.... was to the effect that, the assessee had discharged its onus of proving the source of the same with all documentary evidences, and its explanation had been rejected on flimsy ground, without properly considering the submissions made by the assessee. The ld.DR, on the other hand supported the order of the AO. 8. Since the Ld.Counsel for the assessee referred to various documents in support of its contentions, it was directed to list in tabular form all the documents which were placed before the authorities below i.e. AO/DRP ,to prove the source of the cash deposited in bank account, and the investments made in immovable property. The said direction was complied with by the ld.counsel for the assessee, and shall be referred to in our order as and when required. 9. Taking up the first issue raised in ground no.4, regarding the source of cash deposited in the bank account of the assessee amounting to Rs. 35,67,644/- remaining unexplained, we find that the assessee's explanation of the same was to the effect that the same represented 50,000 USD deposited in her bank account, which was sourced from withdrawals made from a company in South Africa where the assessee's spouse was ....
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....tement of "SPPL" recorded a debit of 3,70,750 which on conversion to the USD at the rate of Rs. 71.50 came to Rs. 2,65,08,625/-, and therefore, did not match with the amount of Rs. 35,67,644/- deposited in the Indian NRE bank account. The AO also noted that no explanation of the relationship between the assessee and the company i.e. "SPPL" was given by the assessee, as also any copy of the return of the said company or a contra confirmation along with ledger account of the said company. 12. Before the DRP, the assessee submitted additional evidences explaining that the amount withdrawn from the "SPPL" was in South African currency "ZAR" and the AO had incorrectly converted it at US dollar exchange rate therefore arriving at a much larger figure of withdrawal in Indian Rupees. That on conversion of ZAR withdrawn in US Dollars it matched with the figure of 50,000 US Dollars and there was factually no discrepancy in the amount withdrawn from the South African Bank account and deposited in the Indian Bank account. That after withdrawal of this currency, it was converted in USD amounting to 50,000 USD, which was carried to India, and declared in currency declaration forms at Ahmedaba....
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....at $50000 withdrawn by the assessee is the same, which was deposited in ICICI Bank account. 6.3.4 In view of the above, the panel notes, that the applicant has failed to explain the source of deposit of Rs.3567644/-( i.e.$50000/-) in her bank account. Therefore, this objection raised by the applicant is not tenable and is hereby rejected. 13. Considering all the above, we find no substance in the reasoning of the DRP/AO for rejecting the assessee's explanation of the source of cash deposited amounting to Rs. 35,67,644/-. The assessee's explanation of the amount having been sourced from the withdrawal made from the "SPPL" in which her husband was a director, is not disputed by the authorities below. In fact, as noted above by us, the assessee had filed all documentary evidences, proving the same ,right from bank statement of "SPPL" showing withdrawal of the necessary amount in the currency of the country of residence i.e. ZAR, the document evidencing the conversion of ZAR in 50,000 USD by the assessee and her husband, declaration of this 50,000 USD to the Custom Authority in India when the assessee and her husband carried the amount immediately after withdrawal from Sout....
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....able property ,viz. Flat No.6501, Floor No.65 val. Majala, Building Name : Varidviv See Wing D, World Tovarsa, Block No. Appar Varali, Mumbai. Investment made in the impugned year was Rs. 2,18,21,362/-, out of which source of Rs. 18.00 lakhs made out of the ICICI Bank account of the assessee was accepted by the AO, and the remaining investment of Rs. 2,00,21,362/- was held to be out of unexplained source. The orders of the authorities below record the explanation of the assessee regarding the source of the same as having been paid by a foreign company, Sea Horse Technologies Ltd. ("SHTL"), directly to the developer of the said plot i.e. Macrotech Developers in two instalments. On 17.3.2021 Rs. 69,28,545/-, and on 30.3.2021 of Rs. 1,30,92,817/-. 19. Before us, the assessee has listed evidences filed in this regard to the authorities below as under: 1) Sea Horse Technologies Limited Bank Statement with AFRASIA Bank A/c No. 001600004032011. Where the amount transfer to Macrotech Developers Limited is reflected on 17/03/2021 and 30/03/2021 respectively. 2) Confirmation/Resolution of Sea Horse Technologies Limited for payment of US $520,045.54 to Macrotech Developers Limited on....
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....lain as to why this amount has been transferred and also has failed to furnish any confirmation from the entity which has transferred this money to the applicant's bank account. The assessee has submitted a letter from "Capital Horizons" from Mauritius confirming that these payments were made, however, this so called confirmation from a third party, which is unrelated and based in Mauritius, is blatantly inadequate and highly unconvincing. 7.3.3 In view of the above it is clear that the applicant has failed to explain source of investment/purchase of property of Rs.20021362/- and the same has been treated as unexplained investment/purchase of property of the assessee. Therefore, this objection raised by the applicant is not tenable and is hereby rejected. 22. On perusal of the above, it is revealed that the Revenue authorities did not dispute the fact of the amount being invested by "SHTL" and payment being made by them directly to the developers. The only reason apparently for rejecting the assessee's explanation is that there is no explanation as to why this amount has been transferred by the said foreign company on behalf of the assessee, and also on account of p....
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....ents filed to the authorities below as evidence of the aforementioned explanation: 1) Shri Sanjeev Bhatt from his NRE A/c with ICICI Bank Limited A/c No. 036601075099 2) Amount credited Rs. 25,97,110.63/-in his account from his son Kush Bhatt from his foreign Bank account with Investec Specialist Bank A/c No. 10012275627 3) Confirmation from Kush Bhatt, Foreign Exchange advice dated 19/03/2021and payment advice of Investec Bank 4) ITR of Kush S. Bhatt for February 2021 & February 2022 27. As is evident from the above, the assessee had submitted copy of her ICICI Bank account reflecting credit of 25,97,110/- as coming from the bank account of her son, from his foreign account viz. Investec Specialist Bank Account. Copy of the said account of the assessee's son; confirmation from her son, along with foreign exchange advice and payment advice of investment bank was filed, as also ITR of his son. The reason for rejecting the assessee's explanation by the DRP is contained in para 8.3.1 to 8.3.4 as under: "8.3.1 The panel has considered the content of the objection, the stand taken by the Ld. AO, submissions made and arguments presented by the Ld. AR. This pane....
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....he same, we fail to understand as to what basis the DRP had for recording finding that the assessee had failed to discharge her onus of explaining the source of investment of Rs. 26,49,000/- with the supporting documents, when the fact on record are completely to the contrary reflecting that the assessee had filed all supporting evidences, explaining the source of the said investment, as coming out of the advances given by her son to the assessee from his foreign account. 30. In the light of the same, the addition made of Rs. 26,49,000/- on account of unexplained investment is held to be untenable on the facts, and the AO is directed to delete the same. Ground No.6 is allowed. 31. Ground No.7 relates to the addition made to the income of the assessee on account of cash of Rs. 2,07,440/- found deposited in her bank account, source of which remained unexplained. The orders of the authorities below as well as the arguments of the ld.counsel for the assessee before us are to the effect that the same pertained to the reimbursement of travelling expenses to the assessee by a company viz. "SHTL" in which she was a director; that the invoices of the travelling expenses viz. ticket....