Mumbai: The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of a woman who was saddled with an addition of Rs 80 lakh to her taxable income after the income-tax (I-T) department questioned a property payment made directly by her husband to the property seller. The husband, who was working in Dubai, made this payment on her behalf through authorised channels.The ‘Insight Portal’ of the I-T department revealed that she purchased immovable property for Rs 1.4 crore during the financial year ended March 31, 2016. This portal tracks high-value financial transactions and helps identify any non-payment of tax.During scrutiny proceedings, the I-T officer accepted that certain payments had been made from her Indian bank account. However, questions were raised on a sum of Rs 80 lakh that was paid directly to the seller by her husband, on her behalf.Her husband remitted the amount in two instalments of Rs 40 lakh each through a Dubai Exchange Bureau directly into the seller’s account. Since the remittance did not pass through the wife’s bank account and she could not produce documentary evidence such as the exchange bureau’s remittance records, the I-T officer treated the amount as an unexplained investment under Section 69, which would be taxable at a significantly high rate in her hands.Before the ITAT, she submitted that the source of the entire investment was fully explained and duly supported by documentary evidence. She furnished a complete reconciliation of the Rs 1.4 crore purchase consideration — including the direct payment made by her husband.She submitted a copy of the registered sale deed, gift deed executed by her husband, his affidavit confirming the payments, bank statements, and other supporting documents to establish the flow of funds and the genuineness of the transaction.The ITAT noted that the tax authorities did not dispute the identity of the husband, his financial capacity to make the payment, the fact that Rs 80 lakh was credited into the seller’s account, or the genuineness of the gift deed, affidavit, and other supporting documents.The ITAT ruled in her favour and held that there was no justification for treating the amount as an unexplained investment merely because a particular remittance record from the Dubai Exchange Bureau was not available. Tax experts point out that the ITAT rightly adopted a holistic approach.
