S. 69 : Unexplained investments-Foreign assets-Foreign investments were jointly held with the assessee’s husband, acquired through disclosed remittances in earlier years under the Liberalised Remittance Scheme (LRS), and supported by contemporaneous documentary evidence including bank statements, PMS reports, reconciliation statements, balance sheets and Schedule FA disclosures of both co-holders-No addition under section 69 could be made by treating the husband’s share of investment as unexplained investment in the hands of the assessee merely on suspicion and without any contrary evidence- Addition towards unexplained foreign investment deleted. [S. 143(3), 144B, Schedule FA]
The Assessing Officer made an addition of ₹5.05 crore under section 69 on the ground that the entire foreign portfolio investment belonged to the assessee and that the difference between the value of foreign assets identified during scrutiny and the amount disclosed in Schedule FA represented unexplained investment. The Tribunal found that the foreign investments were originally held jointly by four family members and, after succession, remained jointly held by the assessee and her husband. The investments had been made through banking channels under the Liberalised Remittance Scheme during F.Ys. 2015-16 and 2017-18 and were supported by Commerzbank statements, PMS reports, LRS remittance details, reconciliation statements, balance sheets and Schedule FA disclosures of both co-holders. The Revenue neither disproved these documents nor conducted any independent enquiry with the foreign bank or PMS manager. Since no fresh investment was made during the relevant previous year and the husband’s share of investment was duly disclosed in his own return of income, the addition made in the assessee’s hands was unsustainable. The Tribunal, therefore, directed the deletion of the addition made under section 69 of the Act. (AY. 2023-24) (ITA No. 1397/Mum/2026, dated 16-06-2026.)

Ira Maulik Shah v. ITO (Mum.)(Trib.) www.itatoline.org

[Coram : Hon’ble Shri Amit Shukla, JM and Hon’ble Shri Arun Khodpia, AM]