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2024 (6) TMI 1194 - AT - Income TaxAddition u/s 69 - unexplained investment - entire impugned action is based on the fact that agreement showed the individual name of assessee name of director of the company figured in his individual capacity and not in the name of company - HELD THAT -We find that the learned CIT (A) is right in finding that it was by way of a bona fide mistake, which has also been corrected subsequently. CIT (A) has then adverted to the additions which could be made under Section 69 of the Act. The said section envisages a situation where the assessee has (i) made an investment (ii) which is not recorded in the books of account or (iii) the assessee offers no explanation about the nature/source of the investment or (iv) the explanation offered is not found to be satisfactory. In our view, none of these requirements can be said to be satisfied in this case as the explanation offered is plausible and is clearly borne out of material on record. We, therefore, find that no case for interference is made out. Revenue appeal stands dismissed.
Issues involved:
1. Challenge to order dated 31.03.2023 passed by Commissioner of Income Tax (Appeals) arising from order dated 25.08.2021 by DCIT, NFAC, Delhi for assessment year 2018-19. 2. Addition of Rs.1,63,97,000 under Section 69 of the Income Tax Act, 1961. 3. Justification of the addition based on an investment not satisfactorily explained by the respondent-assessee. Analysis: Issue 1: Challenge to CIT(A) order The appeal was filed by the Revenue against the order dated 31.03.2023 passed by the Commissioner of Income Tax (Appeals) (CIT(A)), which arose from the order dated 25.08.2021 by the DCIT, NFAC, Delhi for the assessment year 2018-19. The respondent-assessee, who is the Director of M/s. Span Tech Engineers Pvt. Ltd., had declared a total income of Rs.39,66,290/- in the Income Tax Return filed for the said assessment year. The case was selected for limited scrutiny to examine the investment in property, leading to the addition under Section 69 of the Act. Issue 2: Addition under Section 69 The primary issue revolved around the addition of Rs.1,63,97,000 under Section 69 of the Income Tax Act, 1961. The Assessing Officer (AO) made this addition in the hands of the respondent-assessee, contending that there was an investment not satisfactorily explained. The respondent contended that the property was purchased by M/s. SEPL, and the consideration was paid by the company, as reflected in the books of account. The AO, however, refused to accept this explanation, leading to the challenge before the CIT(A) and subsequently before the Appellate Tribunal. Issue 3: Justification of the addition The crux of the matter was whether the AO was justified in making the addition under Section 69 of the Act based on the alleged investment that was not satisfactorily explained by the respondent-assessee. The Tribunal analyzed the circumstances, including the acquisition of leasehold rights by M/s. SEPL from MIDC, the payment of consideration, and the subsequent execution of deeds. The CIT(A) found the mentioning of the assessee's name in the deed to be a bona fide mistake, supported by evidence of payment and accounting in M/s. SEPL's records. The Tribunal concurred with this finding, emphasizing that the explanation offered was plausible and based on material on record, warranting no interference. In conclusion, the Tribunal dismissed the appeal, upholding the CIT(A)'s decision to delete the addition of Rs.1,63,97,000. The cross objection filed by the respondent was deemed not maintainable as the assessee was not aggrieved by any part of the CIT(A)'s order. The judgment provided a detailed analysis of the facts, submissions, and legal provisions to arrive at a reasoned decision in favor of the respondent-assessee.
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