2022 (8) TMI 120 - AT - Income Tax

Reopening of assessment u/s 147 - Addition u/s 69 on account of unexplained investment - Case reopened on the basis of information received from Investigation Wing, Ahmedabad that a search action under Section 132 was carried out in case of Barter Group, Ahmedabad - HELD THAT - The addition in the assessment order dated 27/09/2017 has no connection with the addition in assessment order passed under section 143(3)/147 dated 17/12/2018. The addition in the second assessment order dated 17.12.2018 is clearly based on the incriminating evidence about the investment in the share capital of M/s Rajendra Suri Financial Services (Gujarat) Pvt. Ltd. was found. We find that the assessee throughout the proceedings either before the Assessing officer or before the CIT(A) has shown a very casual approach and only submitted in pleading that the assessee was in the business of cheque discounting. The cheque discounting business was projected as noble profession and as such no addition on account of unaccounted investment can be made. Thus, in absence of any evidence, we do not find any merit that grounds raised in the appeal is covered by the decision of Tribunal in assessee s own case for A.Y. 2011-12 2018 (9) TMI 1989 - ITAT SURAT . Therefore, do not find any error or illegality in the order of the ld. CIT(A) and we uphold the same. - Decided against assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Addition of Rs. 5,00,000 under Section 69 of the Income Tax Act on account of unexplained investment.
3. Validity of the reassessment proceedings and the evidence supporting the addition.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appeal was filed with a delay of 12 days. The assessee attributed the delay to suffering a loss in the cheque discounting business and relocating to his native place. Upon realizing the need to file an appeal, the assessee returned to Surat, but the stipulated period had lapsed. The Tribunal noted that the delay was neither intentional nor deliberate. The revenue did not seriously oppose the application for condonation of delay. Considering the submissions and the affidavit filed by the assessee, the Tribunal took a liberal view and condoned the delay, allowing the appeal to be heard on merits.

2. Addition of Rs. 5,00,000 under Section 69 of the Income Tax Act:
The case was reopened based on information from the Investigation Wing, Ahmedabad, following a search action on Barter Group. The investigation revealed that the assessee made an investment of Rs. 5,00,000 in shares of M/s Rajendra Suri Financial Services (Gujarat) Pvt. Ltd., which was not disclosed in the regular books of accounts. The Assessing Officer (AO) treated this as an undisclosed investment and made an addition under Section 69. The assessee denied making any investment in shares, claiming the amount was part of his cheque discounting business and earned a commission. However, the AO found no evidence to support this claim, and the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the addition due to the lack of any clarifying evidence from the assessee.

3. Validity of the Reassessment Proceedings and Evidence Supporting the Addition:
The reassessment was initiated under Section 147 based on incriminating evidence seized during the search on Barter Group, indicating undisclosed investments. Despite multiple opportunities, the assessee failed to file a return or provide explanations. The AO completed the assessment under Section 144, relying on the seized documents and information. The Tribunal noted that the assessee did not furnish any corroborative evidence to substantiate that the Rs. 5,00,000 was part of the cheque discounting business. The Tribunal also dismissed the alternative plea that the issue was covered by a previous Tribunal decision, as the addition in the current reassessment was based on new incriminating evidence. The Tribunal found no merit in the assessee's submissions and upheld the CIT(A)'s order, confirming the addition under Section 69.

Conclusion:
The Tribunal dismissed the appeal, finding no error or illegality in the CIT(A)'s order. The addition of Rs. 5,00,000 under Section 69 was upheld due to the lack of evidence from the assessee to disprove the findings of the AO and CIT(A). The order was pronounced in the open court on 13th July 2022.