ITAT Rules for Mumbai Woman in Rs 80 Lakh Tax Dispute Over Property Remittance

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) ruled in favour of a woman who was saddled with an addition of Rs 80 lakh to her taxable income by the Income Tax (I-T) department. The tax department had raised questions regarding a property payment made directly to a seller by her husband, who was working in Dubai, on her behalf through authorised channels.

The matter arose after the I-T department’s 'Insight Portal' revealed that the woman had purchased immovable property valued at Rs 1.4 crore during the financial year that ended on March 31, 2016. The 'Insight Portal' tracks high-value financial transactions to help authorities identify non-payment of tax.

During scrutiny proceedings, the assessing I-T officer accepted that certain payments for the transaction had been made from the woman's Indian bank account. However, the officer questioned the sum of Rs 80 lakh that was paid directly to the seller by her husband on her behalf.

Her husband had remitted the Rs 80 lakh in two separate instalments of Rs 40 lakh each through a Dubai Exchange Bureau directly into the property seller’s account. Because the remittance did not pass through the wife’s own bank account and she was unable to produce documentary evidence such as the exchange bureau’s remittance records, the I-T officer classified the amount as an unexplained investment under Section 69.

Treating the amount under Section 69 made it taxable at a significantly high rate in the woman's hands. The Mumbai bench of the ITAT subsequently ruled in her favour, resolving the tax battle over the remittance.