2024 (11) TMI 166 - AT - Income Tax

Undisclosed investment in committees - a diary was found at the residential premises of the assessee during the course of search, which contain certain transactions in respect of investment made in various committee - HELD THAT - Tribunal had in the first round given specific directions to the ld AO to make verification of claim of the assessee with the relevant documents filed before the Hon ble ITSC. The assessee on his part had duly submitted the said documents to substantiate his claim. AO does not bother to look into the said documents and proceeds to tax the assessee for the second time on the same transaction which had already suffered tax before the Hon ble ITSC. This illegal action of the ld AO is upheld by the ld CIT(A). Hence we have no hesitation to conclude that both the orders of the lower authorities are perverse and the revenue does not deserve another chance in these appeals. Hence we hereby delete the additions made by the ld AO towards undisclosed investment in committees for both the Asst Years 2007-08 and 2008-09 and accordingly the Ground raised by the assessee are allowed.

Summary

Issues:
Appeal in ITA Nos.287 & 288/Del/2024 for AY 2007-08 & 2008-09 regarding addition on account of undisclosed investment in committees.

Analysis:
1. The appeals involved identical issues for AY 2007-08 & 2008-09, focusing on whether the ld CIT(A) was justified in confirming the addition on account of undisclosed investment in committees.

2. During a search and seizure action, a diary was found containing transactions related to investments in committees. The assessee and partner filed a settlement application before the ITSC, offering the opening balance of Rs 1,07,61,930/- as accumulated profit, which was accepted by the ITSC.

3. In the first round of proceedings, the Tribunal observed that the undisclosed investment of Rs 10,00,000/- for AYs 2007-08 and 2008-09 was already considered and admitted in the additional income offered for AY 2010-11 by the ITSC.

4. Despite the Tribunal's direction to verify the claim with relevant documents, in the second round, the ld AO ignored the directions and proceeded to tax the undisclosed investment again. This action was upheld by the ld CIT(A), leading to the current appeals.

5. The Tribunal found the actions of the lower authorities to be perverse as they disregarded the previous directions and taxed the same transaction twice. Consequently, the additions made by the ld AO were deleted, and the appeals of the assessee were partly allowed.

6. The Tribunal concluded that the revenue did not deserve another chance in the appeals, highlighting the disregard for previous directions and the unjust taxation of the same transaction twice.

7. Ultimately, the Tribunal partly allowed both appeals of the assessee, deleting the additions made by the ld AO towards undisclosed investment in committees for AY 2007-08 and 2008-09.