COMET ENTERPRISE,MUMBAI vs. ITO WARD - 16(2)(1), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
21.07.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2022-23, raising following grounds:
1. On the facts and in the circumstances of the case and in law the Hon'ble CIT (A) erred in dismissing the appeal in limine without considering the subject issues on merit and passing an ex parte order and confirming the addition made by the Ld. AO to the returned income and the reasons assigned for doing so are wrong and contrary thereunder. T
CIT(A) for fres
2. On the fact
Hon'ble CIT(A of Rs. 12,35,0
the reason as Provisions of I
3. On the fact
Ld AO erred i and the reaso the provision
4. On the fact
Ld AO erred i and the reaso the provision
2. At the very ou submitted that the opportunity of being tax (Appeals). It was the appeal was disp three days after to effective opportunity.
3. We have caref perused the material dismissing the appe issued on the appella
18.07.2025, and tha
Thereafter, the learne merits and confirmed
ITA y to the provisions of Income Tax and Therefore, the appeal may be restored bac sh adjudication.
ts and in the circumstances of the case an A) erred in upholding the addition made b
00,000/- to the returned income u/s 69 of ssigned for doing so are wrong and con
Income Tax Act and rules made there und ts and in the circumstances of the case an in initiating penalty u/s. 271AAC(1) of the on assigned for doing so are wrong and of Income Tax Act and rules made there u ts and in the circumstances of the case an in initiating penalty u/s. 272A(1)(d) of the on assigned for doing so are wrong and of Income Tax Act and rules made there utset, the learned counsel fo e assessee was not afforded heard by the learned Commissi s contended that pursuant to a osed of at the very first hearin the date fixed, thereby resulti fully considered the rival su l available on record. The learn eal, has recorded that notice ate portal on 03.07.2025 fixing at there was no compliance b ed CIT(A) proceeded to adjudicat d the addition of ₹12,35,00,000
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A No. 5090/MUM/2025
rules made ck to Hon'ble nd in law the by the Ld AO f the Act and ntrary to the der.
nd in law the e IT Act 1961
d contrary to under.
nd in law the e IT Act 1961
d contrary to under..
or the assessee d a reasonable ioner of Income- a notice issued, ng, immediately ing in denial of ubmissions and ned CIT(A), while of hearing was g the hearing on y the assessee.
te the appeal on 0/- made under section 69 of the Ac failed to substantiate debentures. We find observing as under:
“5. OPPORTUN
Notice of hear
03.07.2025 r was made to 6. FINDINGS &
As all the gr main issue investment u adjudication.
submissions findings are o
6.2 The appe the form of N
Mega Shelter genuine inve confirmed iss that money w the crucial is investments.
6.3 The appel the source of multiple notic explain, the bank stateme capital introd trace these f investment w section 69, s failure is criti the appellant
6.4 Section investments explain the s
ITA ct, primarily on the ground th e the source of investment in that the Ld. CIT(A) has adjudic
UNITY OF HEARING:
ring was issued to the appellant in the ap requesting compliance on 18.07.2025. N this notice.
& DECISION:
rounds of appeal are inter-related and r
(i.e.) addition of Rs.12,35,00,000/- as u/s 69 of the Act they are taken up
After careful consideration of the asse of the appellant and facts on record, on record made:
ellant declared an investment of Rs.12,3
Non- Convertible Debentures (NCDs) issue rs Pvt. Ltd. The appellant claimed tha estments and not loans. The inves uance of debentures to the appellant. The was invested and debentures were allot ssue was the source of funds used for llant was asked to furnish detailed docu f Rs.12,35,00,000/- invested. It is seen ces under sections 133(6), 142(1) and op appellant failed to produce vital evide ents showing the origin of funds, loan a duction proofs or any other documentar funds legitimately. The AO, therefore, was an unexplained investment within th since the appellant failed to prove the ical because, under the Income Tax Act, t to explain the source of any investment.
69 states that where an assessee not recorded in the books of account source, the amount can be treated as th
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hat the assessee non-convertible cated the appeal ppeal portal on No compliance related to one s unexplained p together for ssment order, the following
35,00,000/- in ed by M/s Om at these were stee company e AO accepted tted. However, making these ments proving n that despite pportunities to nces such as agreements or ry evidence to held that the he meaning of e source. This the onus is on e has made and fails to he assessee's income. In th
(SC), the Hon entitled to con human proba
6.5 The app audited finan loans or capit funds amoun mystery. This making the ad
6.6 In the ca taxmann.com
Hon'ble Delhi
"It is not enou the names, P assessee m subscribers a "Mere filing of responsibility
Confirmations invest and the Section 68."
In the prese confirmation existence of t per the abov proof of sourc
6.7 It is very investment in issued, witho such a high-v books does no the source.
Held: Given t the addition penalties and the grounds r
7. In the resu
ITA he case of Sumati Dayal vs. CIT [1995]
'ble Supreme Court emphasized that tax a nsider surrounding circumstances and ap abilities.
ellant did not present bank account s ncials demonstrating inflow of funds. N tal infusion in prior years was furnished.
nting to Rs.12,35,00,000/- remained s creates a strong presumption of undisc ddition justified, ase of Navodaya Castles Pvt. Ltd. v. C m 18 (SC), the Hon'ble Supreme Court i High Court's decision which is reproduc ugh for the assessee to merely furnish d
PAN, or confirmations from the share ap ust also establish the creditworthin and the genuineness of the transactions."
of confirmations does not absolve the as to prove the true source of the fu s without supporting evidence of actua e genuineness of the transaction are inad ent case of the appellant, the investe that debentures were issued establis the transaction and not the source of fu ve decision, such confirmations cannot ce.
y clear that the appellant has merely n the balance sheet and stated that deb out discharging the initial onus of proving value investment. Mere reflection of a ot ipso facto prove genuineness or explain the above findings and legal principles, of Rs.12,35,00,000/- u/s 69 is co d interest levied are consequential in natu raised are dismissed.
lt, the appeal is dismissed.”
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214 ITR 801
authorities are pply the test of statements or No evidence of The source of shrouded in closed income,
CIT [2015] 56
affirmed the ced as follows:
etails such as pplicants. The ness of the ssessee of the nds received.
al capacity to dequate under ee company's shes only the nds. Thus, as substitute for declared the bentures were g the source of transaction in n the nature of it is held that onfirmed. The ure. Hence, all 3.1 However, on a circumstances of the assessee. The record the very first instanc and effective opportu material on record. T and its adjudicatio principles of natural and effective, and not 3.2 It is well settled appearance, the app reasonable opportun additions involving consideration. Dispo adequate opportunity
3.3 In these circum impugned order of Accordingly, the orde the matter is restored with law, after afford opportunity of bein cooperate with the material on record wi
ITA an overall consideration of case, we find substance in the d reveals that the appeal has b ce without granting the assesse unity to place its explanation
The right of appeal is a valuable on necessarily requires adh justice. An opportunity of heari t merely a formality.
d that even where an assessee pellate authority is expected nity is afforded, particularly wh serious civil consequence osal of an appeal at the thre y, vitiates the appellate proceedi mstances, we are of the considere f the learned CIT(A) cannot er passed by the learned CIT(A) i d to his file for fresh adjudicatio ding the assessee a reasonable ng heard. The assessee is al appellate proceedings and pla ithout seeking unnecessary adjo
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the facts and grievance of the been decided at ee a meaningful and supporting statutory right, herence to the ing must be real is in default of to ensure that hen substantial es are under eshold, without ings.
ed view that the be sustained.
is set aside, and n in accordance e and adequate lso directed to ace all relevant ournments.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

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ITA the appeal of the assessee ced in the open Court on 18/
S
ANERJEE)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Comet Enterprise
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A No. 5090/MUM/2025
is allowed for 12/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai