NRI gets ITAT relief over ₹79 lakh Mumbai flat tax notice

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has ruled in favour of an NRI and US citizen who received an income tax notice over the source of funds used to buy a flat in Kandivali West, Mumbai. The man, who has lived in America since 2002, booked the property in 2011 for ₹79.9 lakh from a Mumbai builder, with payments made between 2011 and 2018 mostly through his NRE/NRO account with HDFC Bank.

Because he did not file an income tax return (ITR), the tax department issued a notice under Section 148 on March 23, 2023, questioning the funds. Livemint reports that after he filed a belated ITR, the assessing officer proposed assessing his total income as ₹57,24,172. The Dispute Resolution Panel (DRP) earlier directed that ₹51.9 lakh of the amount be deleted but upheld an addition of ₹1 lakh in cash deposit and ₹4,32,280 in stamp duty and registration charges.

The NRI appealed to ITAT Ahmedabad, arguing that bank statements from 2015 showed the ₹1 lakh cash deposit was for the flat’s advance booking. He also provided documents for the stamp duty and registration charges paid to the builder. ITAT accepted his evidence and directed the assessing officer to delete both additions, fully granting relief to the complainant.