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TMI Blog2020 (2) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... es to justify the source of investment in the companies as discussed above which were not accepted by the learned CIT (A). These additional/new evidences were not admitted by the learned CIT (A) as the assessee has not given any reasonable reason for not filing the same before the AO during the assessment proceedings. In this regard, we note that there is a procedure prescribed under rule 46A of income tax rule for furnishing the additional evidences. But the assessee has not complied the same. In the present facts of the case, admittedly the assessee has disclosed the investments in its books of accounts. Thus the question arises whether the addition can be made to the total income of the assessee under section 69 of the Act on account of such investments which was disclosed in the books of accounts. But, we do not want to comment on the same for the reason that 1st of all it is necessary to ascertain the status of the substantive assessment made in the hands of the companies as discussed above. Entire issue needs to be examined afresh by the AO as per the provisions of law and in the light of the above stated discussion. Hence the ground of appeal of the assessee is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in project consultancy viz a viz dealing investment in shares. The assessee filed its return of income dated 30th December 2006 declaring total income at NIL which was accepted under section 143(1) of the Act. 3.1 The assessee in the year under consideration has made investment by subscribing the shares of Pradip Overseas Ltd and Pradeep enterprise Ltd for ₹ 25 lakhs and 31 lakhs respectively. There was a search conducted under section 132 of the Act in Pradip Overseas Group wherein it was admitted by Shri Pradip Kumar J. Karia- the main/key person of the group in the statement furnished under section 132 (4) of the Act, that its companies have introduced undisclosed/unaccounted income in the form of share capital/premium. Furthermore, the name of the assessee was also appearing in the list of the companies which invested in the shares of the aforesaid companies. 3.2 The above fact was communicated to the AO of the assessee and therefore he (the AO) initiated the proceedings under section 147 of the Act by recording the reasons as detailed under: In this case, the assessee has filed return of income on 30/12/2006 declaring NIL income. As per the information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that there is escapement of income. ii. The word used reason in the phrase reason to believe requires the AO to have justification for initiating the proceedings for the escapement of income. As such it is not necessary for the AO to finally ascertain the fact by evidences or other documents that the income has escaped assessment at the time of recording his satisfaction. iii. The AO acquires his jurisdiction for reopening the assessment under section 147 of the Act if some information comes to his possession from the outside sources /independent sources which are specific, reliable and relevant. 5.1 Now, coming to the present facts of the case, on reading the reasons recorded by the AO it is transpired that the AO on receiving the information about the investment as discussed above reached to the opinion that source of investment made by the assessee is found to be fictitious. Accordingly he proceeded to initiate the proceedings under section 147 of the Act. 5.2 At this juncture we are inclined to refer the judgment of Hon ble Supreme Court in the case of Reymond Woollen Mills Ltd vs. ITO reported in 236 ITR 34 wherein it was held as under: The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee that there is change of opinion is not sustainable. Accordingly we do not find any merit in the argument of the learned AR for the assessee. Hence the additional ground of appeal of the assessee is dismissed 6. The issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for ₹ 56 Lacs under section 69 of the Act on protective basis. 7. The assessee has made investments in the shares of Pradip Overseas Ltd and Pradeep Enterprise Ltd for ₹ 25 lakhs and 31 lakhs respectively in the year under consideration. The assessee in support of such investments furnished the copy of the bank statement, return of income, list of investments. 7.1 However, the AO found that the assessee has not furnished the source of investments made in the aforesaid companies by furnishing the identity, genuineness and creditworthiness of the investments. Accordingly, the AO treated such investments as unexplained under section 69 of the Act. However, the AO was conscious to the fact that the same amount has already been added in the hands of Pradip overseas Ltd and Pradeep enterprise Ltd for ₹ 25 lakhs and 31 lakhs respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils in that respect are available. Accordingly the source has not been clearly explained by the appellant in that respect. Similar position is there in respect of the confirmations of Nitin Shah, Ranjeet Kumar K Sen, Vijndrasingh S. Choudhary, Alpaben N Shah, Suresh S Chauhan, Suman Bhanwarlal Swami and Sarveshdevi S Chauhan. The income shown in the IT return by these persons does not appear to be sufficient for giving that much amount of money as share capital in the appellant company. In view of the above details and discussion, it is clear that the appellant has not been able to satisfactorily explain the source of the money that has been invested by it in Pradip Overseas group of companies, which has been treated as unexplained investment by the AO. The action of the AO is accordingly upheld and the addition on protective basis is confirmed. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 9. The learned AR before us filed a paper book running from pages 1 to 35 and submitted that the investment made in the companies as discussed above were duly disclosed in the balance sheet of the assessee. Accordingly there is no question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned CIT (A). These additional/new evidences were not admitted by the learned CIT (A) as the assessee has not given any reasonable reason for not filing the same before the AO during the assessment proceedings. In this regard, we note that there is a procedure prescribed under rule 46A of income tax rule for furnishing the additional evidences. But the assessee has not complied the same. 11.4 We are not oblivion to the fact that the provisions of section 69 of the Act are attracted in a situation where the investments have not been recorded in the books of accounts maintained by the assessee and furthermore the assessee offers no explanation about the nature and source of investments or explanation offered by him in the opinion of the assessing officer is not satisfactory. However, in the present facts of the case, admittedly the assessee has disclosed the investments in its books of accounts. Thus the question arises whether the addition can be made to the total income of the assessee under section 69 of the Act on account of such investments which was disclosed in the books of accounts. But, we do not want to comment on the same for the reason that 1st of all it ..... 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