Ira Maulik Shah v. ITO

Case snapshot

Sections / provisions: 143(3); 144B; 69

Questions before the Court / Tribunal

• Foreign investments; jointly held assets; LRS remittances; section 69: The reported order concerns foreign portfolio assets jointly held with the taxpayer's spouse and supported by earlier LRS remittances, bank/PMS records and Schedule FA disclosures. The disputed section 69 addition is reported as deleted in the absence of contrary evidence or a current-year unexplained investment.

Material facts and background

आदेश / O R D E R PER AMIT SHUKLA (J.M): This appeal has been filed by the assessee against the impugned order dated 30.12.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising out of the assessment framed under section 143(3) read with section 144B of the Income Tax Act, 1961 for Assessment Year 2023-24.

2. The assessee has challenged the action of the lower authorities in sustaining an addition of ₹5,05,81,504/- under section 69 of the Act in respect of certain foreign investments disclosed in Schedule FA of the return of income. The principal grievance of the assessee is that the authorities below have proceeded on an erroneous assumption that the entire foreign portfolio investment belonged exclusively to the assessee, whereas according to the assessee, the overseas Portfolio Management Service (PMS) investment was jointly held and jointly funded by the assessee and her husband, Shri Maulik Shah. It has further been contended that substantial investments forming part of the foreign portfolio were acquired in earlier years and, therefore, the provisions of section 69 could not have been invoked in the year under consideration. The assessee has also disputed the quantum of foreign investment adopted by the Assessing Officer and has contended that the value of investment considered during assessment

acquisition of the underlying foreign assets. 3. Briefly stated, the facts borne out from the assessment records are that the assessee filed her return of income on 25.07.2023 declaring total income of ₹49,86,750/-, which was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS on the specific risk

parameter namely, “New foreign asset in nature of account(s) in which taxpayer is a signing authority (Non-business ITR)”. Pursuant thereto, notice under section 143(2) was issued on 19.06.2024 and thereafter notices under section 142(1) along with various questionnaires were issued from time to time calling upon the assessee to furnish details regarding foreign assets, foreign bank accounts, overseas investments, source of acquisition thereof and the disclosures made in Schedule FA of the return of income. 4. During the course of scrutiny proceedings, the Assessing Officer examined the information available on record relating to the assessee’s overseas holdings. On the basis of details gathered and furnished during assessment proceedings, the Assessing Officer noted that the assessee was associated with foreign investments consisting of equity shares of various overseas listed entities, fixed deposits maintained with Commerce Bank, Germany, and balances in foreign bank accounts. According to the Assessing Officer, the aggregate value of such foreign assets worked out to ₹6,87,29,850/-, comprising foreign equity investments of ₹4,48,46,351/-, foreign deposits of ₹2,29,50,563/- and...

₹5,05,81,504/- remained unexplained and unreconciled. The Assessing Officer was of the prima facie view that the assessee had failed to explain the source, ownership and disclosure of the balance foreign investment and, accordingly, a show cause notice was issued requiring the assessee to explain why the differential amount of ₹5,05,81,504/- should not be treated as unexplained investment under section 69 of the Act. 6. The Assessing Officer further observed that in the Schedule FA filed for Assessment Year 2023-24, the assessee had disclosed

Appellant / assessee submissions

in earlier years remained unsubstantiated and unverifiable. The Assessing Officer thus entertained doubts not only regarding the ownership and source of the investments but also regarding the correctness of the disclosures relating to the period of acquisition. 7. In response, the assessee submitted that the Assessing Officer had erroneously proceeded on the footing that the entire foreign portfolio belonged to the assessee. It was explained that the overseas PMS investment was jointly held by the assessee and her husband and that out of the total investment of ₹6,87,29,850/-, an amount of approximately ₹1,83,82,456/- represented the assessee’s share whereas the balance amount of ₹4,59,71,947/- represented the ownership interest and investment contribution of her husband. The assessee further contended that the investments had been accumulated over earlier years and that the impugned amount did not represent any investment made during the relevant previous year. Various explanations and supporting statements

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

approximately ₹6.43 crore. According to the assessee, the very foundation of the addition was therefore factually erroneous. 10. The

unanswered. The learned CIT(A), therefore, concurred with the conclusions drawn by the Assessing Officer and upheld the addition of ₹5,05,81,504/- made under section 69 of the Act.

assessee whereas foreign assets of only ₹1,81,48,346/- were disclosed by her in Schedule FA and, therefore, the balance amount represented unexplained investment. The authorities below have further proceeded on the assumption that the assessee had failed to establish that the substantial portion of the foreign investment belonged to and was funded by her husband, Shri Maulik Jasubhai Shah. 13. On a careful examination of the record, we find that the factual position emerging from the documentary evidence placed before us does not support the conclusion drawn by the lower authorities. The material available on record shows that the foreign investment under consideration was held through Commerzbank, Germany. The account was originally held by four joint holders, namely, Shri Jasubhai Shah, Smt. Shweta Shah, Shri Maulik Jasubhai Shah and the assessee. The remittance details placed in the paper book further demonstrate that the funds were remitted from India through

reconciliation statement tracing the investment from its inception. The records consistently depict the investment as a jointly held asset and nowhere has any material been brought on record by the Revenue to demonstrate that the investment stood exclusively in the ownership of the assessee. 15. We find that the assessee had placed before the Assessing Officer a detailed reconciliation statement tracing the foreign

18. The approach adopted by the Assessing Officer, in our considered opinion, suffers from a fundamental factual infirmity. Once the assessee had furnished the Commerzbank statements,

Operative decision and relief

18. The approach adopted by the Assessing Officer, in our considered opinion, suffers from a fundamental factual infirmity. Once the assessee had furnished the Commerzbank statements,

reconciliation statement from inception, balance sheets of both the co-holders and the corresponding Schedule FA disclosures,

demonstrate, on the basis of some contrary material, that the ownership structure reflected in these documents was incorrect. However, neither the assessment order nor the appellate order refers to any enquiry having been conducted from Commerzbank, Germany, the PMS manager or any other independent source. No material has been brought on record to establish that the foreign assets belonged exclusively to the assessee or that the ownership reflected in the records was incorrect. The explanation furnished by the assessee has been rejected primarily on suspicion and conjecture without dislodging the documentary evidence placed on record. 19. We also find merit in the grievance of the assessee that the addition has ultimately been worked out by taking the aggregate value of the foreign investment and thereafter reducing the amount accepted as belonging to the assessee. In effect, what has been brought to tax is the portion of investment admittedly claimed to belong to Shri Maulik Jasubhai Shah. Once the documentary evidence establishes

Authorities and precedents appearing in the judgment

• No reliable precedent list was extracted automatically; use the full judgment for the citation chain.

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Ratio and legal principle

The decision turns on Foreign investments; jointly held assets; LRS remittances; section 69. The operative result is classified as Operative order controls. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Foreign investments; jointly held assets; LRS remittances; section 69. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Use the judgment as a fact-specific precedent: match the statutory version, assessment period, procedural stage and evidentiary record before relying on the result.
• Check whether a later High Court/Supreme Court order has affirmed, reversed, distinguished or rendered the decision academic.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

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