2018 (5) TMI 1885 - HC - Income Tax

Addition u/s 69 - AO has formed opinion based on evidences gathered during assessment proceedings in the form of statement of sellers and submission of the directors of M/s Basera Realtors Pvt. Ltd. before the DCIT, Central Circle that 50% of unexplained investment belong to the respondent-assessee - ITAT deleted the addition - HELD THAT - As per the information available with the Department, Basera Realtors Pvt. Ltd. has not challenged the order passed by the Tribunal upholding the order passed by the Commissioner of Income Tax (Central), Ludhiana u/s 263 of the Act. In view of the aforesaid factual matrix, learned counsel for the revenue submitted that once the entire undisclosed investment has been assessed in the hands of Basera Realtors Pvt. Ltd., the assessment of the same amount in the hands of the assessee will not be justified. No substantial questions of law arise in the present appeal

Summary

Issues:
1. Addition of undisclosed investment made by the Assessing Officer under Section 69 of the Income Tax Act.
2. Granting relief to the assessee based on the addition made in the case of another entity, M/s Basera Realtors Pvt. Ltd.

Analysis:
1. The appeal was against the order passed by the Income Tax Appellate Tribunal regarding the addition of undisclosed investment of ?93,63,000 made by the Assessing Officer under Section 69 of the Income Tax Act for the assessment year 2006-07. During assessment proceedings of Basera Realtors Pvt. Ltd., the Managing Director stated that 50% of the unexplained investment belonged to the respondent-assessee. The Commissioner of Income Tax revised the order, directing the entire undisclosed investment to be assessed in the hands of Basera Realtors Pvt. Ltd. The Tribunal upheld this decision, and as Basera Realtors Pvt. Ltd. did not challenge it further, the matter was remitted back to the Assessing Officer for calculation purposes only.

2. The revenue argued that since the entire undisclosed investment had already been assessed in the hands of Basera Realtors Pvt. Ltd., assessing the same amount in the hands of the assessee would be unjustified. The revenue contended that no substantial questions of law arise in the present appeal due to this factual matrix. Consequently, the appeal was dismissed based on these grounds.