KASHYAP GHANSHYAM MEHTA,MUMBAI vs. DCIT CIRCLE 42(2)(1), MUMBAI
What did the Tribunal hold?
The Tribunal found that the CIT(A) admitted additional evidence but failed to examine it, creating a contradiction. The matter was restored to the Assessing Officer to re-examine the investments made during the year and the explanation of their source.
What were the facts?
The assessee declared an investment of Rs. 13.50 crores in its return of income, but later claimed this was a typographical error and the actual investment was Rs. 2,09,26,233/-. The Assessing Officer treated the difference as unexplained investment. The CIT(A) confirmed the addition.
What were the issues?
Whether the addition of unexplained investment based on a claimed typographical error in the return of income was justified, and whether the CIT(A) erred in confirming the addition without properly considering admitted additional evidence.
Which sections of the Income-tax Act were involved?
Section 69,Section 115BBE,Section 80GGC,Section 234A,Section 234B,Section 234D
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Income Tax Appellate Tribunal, “E” BENCH; MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI SIDDHARTHA NAUTIYAL
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH; MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No. 3287/Mum/2026 (Assessment Year: 2023-24)
Kashyap Ghanshyam Mehta DCIT Circle 42(2)(1) 64-B, Avinash 64 B, Avinash 7 Room No.920, Kautilya Bhavan, Bungalows, Mumbai, Azad vs. Bandra Kurla Complex, Bandra Nagar, Mumbai 400 053. East, Mumbai, MUMBAI, Maharashtra, 400051 PAN: ALRPM7446C
(Appellant) (Respondent) For Assessee : Shri K. Gopal a/w Ms. Neha Paranjpe For Revenue : Smt. Sujatha Iyyanger, SR DR Date of Hearing : 07.07.2026 Date of Pronouncement : 15.09.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :
This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 27.02.2026, pertaining to Assessment Year (AY) 2023-24, wherein the Assessee has taken the following grounds of appeal: “1. The National Faceless Appeal Centre [NFAC] erred in confirming the action of the Ld.A.O. in determining total income of Rs.13,33,65,208/- as against the returned income of Rs.22,67,910/- vide assessment order dated 18.03.2025 without appreciating the facts and circumstances of the case. The appeal order passed by the NFAC is not justified and the same may be set aside.
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 2. The NFAC erred in confirming the addition of Rs.12,76,80,270/- without appreciating that while filing the return of income for the Assessment Year: 2023-24, the figure of investment at Rs.13,50,00,000/- was wrongly recorded by the person who uploaded the return. The actual investment of the Appellant as on 31.03.2023 is Rs.2,09,26,233/- and not Rs. 13,50,00,000/-. Thus, the addition of Rs.12,76,80,270/- made under section 69 of the Act is unjustified and the same may be deleted. 3. The NFAC failed to appreciate that mentioning a wrong figure of investment at Rs.13,50,00,000/- was a bonafide mistake on part of the person who uploaded the return of income of the Appellant. During the relevant assessment year, the Appellant has made the investment of Rs.12,44,983/- and the total investment as on 31.03.2023 was Rs.2,09,26,233/- which is supported by documentary evidences. Thus, the addition of Rs. 12,76,80,270/- made under section 69 of the Act is unjustified and the same may be deleted. 4. The NFAC erred in confirming the invocation of section 115BBE of the Act based on the addition made under section 69 of the Act without appreciating the facts and circumstances of the case. 5. The NFAC erred in confirming the disallowance of Rs.25,00,000/- under section 80GGC of the Act without appreciating the facts and circumstances of the case. The disallowance made under section 80GGC of the Act is not justified and the same may be deleted. 6. The NFAC erred in confirming the disallowance of Rs.9,17,028/- of House Rent Allowance without appreciating the facts and circumstances of the case. The said disallowance made is unjustified and the same may be deleted. 7. The interest levied under section 234A/234B/234D of the Act is not justified and the same may be deleted.” 2. Ground no. 1 is general in nature, it does not require any separate adjudication. Ground nos. 5 and 6 were not pressed by the ld. AR during the course of hearing and a written submission has also been filed to this effect, hence the same are dismissed as not pressed.
Now, coming to ground no. 2-4, wherein the assessee has challenged the sustenance of addition of Rs. 12,76,80,270/- under section 69A of the Act.
Briefly, the facts of the case are that the assessee filed its original return of income on 08.07.2023 declaring total income of Rs. 22,42,910/-
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta . Subsequently, he filed his revised return declaring total income of Rs. 22,67,910/-. The case of the assessee was selected for complete scrutiny and notices under section 143(2) and 142(1) were issued calling for necessary information and documentation. In particular, in terms of notice issued under section 142(1) dated 19.10.2024, the assessee was asked to furnish details of the investment and the sources of the investments reported in the return of income under the head “Schedule of Assets and Liabilities”. In response, the assessee filed his submissions on 02.11.2024 and it was submitted that the amount of Rs. 13.5 crores investments as disclosed in the return of income was filed inadvertently and the actual investment of the assessee as on 31.03.2023 was Rs. 73,19,730/- and as on 31.03.2024 was Rs 81,61,778/-.
The submissions so filed by the assessee were considered, but not found acceptable to the Assessing Officer. As per the Assessing Officer, the burden of proof lies on the assessee to substantiate the source and the details of the investments declared in the return of income. It was held that the assessee has only submitted proof to the extent of Rs. 73,19,730/-, and therefore, the balance investment of Rs. 12,76,80,270/- remains unsubstantiated with proper explanation and in view of the same, Rs. 12,76,80,270/- was brought to tax under section 69 read with 115BBE as unexplained investment.
The assessee thereafter carried the matter in appeal before the ld. CIT(A). It was submitted that the addition has been made in consequence of an inadvertent typographical and clerical mistake caused while entering the figure of investments in the return of income. It was submitted that the assessee relied on his tax consultant for filing the return of income as he was not conversant with the procedures under the Income Tax Act. It was submitted that while filing the return of income, the value of investment in shares and securities as on 31.03.2023 has
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta been wrongly entered as Rs. 13.50 crores instead of Rs. 2,09,26,233/-. It was further submitted that the said investment has been made by the assessee out of his own sources of income and the details of investment amounting to Rs. 73,19,730/- were duly submitted during the course of assessment proceedings. However, in respect of remaining investments, the assessee wishes to file the additional evidences and has also moved an application for admission of additional evidence under Rule 46A of the Income tax Rules. It was further submitted that his total investment as on 31.03.2022 was Rs. 1,96,81,250/- and as on 31.03.2023 was Rs. 2,09,32,733/-, and therefore, investment of Rs. 12,44,983/- has only been made by way of fresh investment during the year and the remaining investment has been carried forward from the earlier financial years.
It was further submitted that there is no corroborative evidence with the Assessing Officer to show that the assessee has made the investment of Rs. 13.50 crores and therefore, the addition so made by the Assessing Officer be directed to be deleted. It was further submitted that the assessee wishes to place on record the contract notes, the demat account statement and the chart of investment which clearly shows that the investments as on 31.03.2023 was Rs. 2,09,26,233/- and there was no corresponding demat inflow, no unusual transaction in any bank account, nor any kind of unexplained credit or cash deposit that could indicate the existence of such large investment. It was submitted that the entire portfolio investment is fully disclosed and funded through tax-paid salary income. It was submitted that the impugned addition solely on the basis of an erroneous reported figure in the Asset and Liability Schedule of the return of income without undertaking any independent verification or inquiry or examination by the Assessing Officer cannot be made the basis of the addition under section 69 of the Act.
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 8. The submissions so filed and the additional evidence so submitted by the assessee were thereafter forwarded to the Assessing Officer seeking his comments. The Assessing Officer in his remand report stated that as per the details shared by the ld. CIT(A) and the submissions made by the assessee during the course of remand proceedings, the evidences to establish investment to the tune of Rs. 2,09,26,233/- has been submitted by the assessee. The same is evident from page 36 of the impugned order where the remand report of the Assessing Officer has been reproduced by the ld. CIT(A). At the same time, the Assessing Officer stated that the assessee himself in his ITR filed under section 139(1) and again ITR filed under 139(5) has disclosed the same quantum of investment amounting to Rs. 13.50 crores under the head “Shares and Securities” and the same has therefore, not been unearthed by the Assessing Officer and imposed on the assessee, but based on the declaration made by the assessee in his return of income. As per the Assessing Officer, had it been a typographical/clerical error, it would have been rectified in the revised ITR. However, nothing of that sort occurred and the amount of investment remained the same even in the revised ITR. It was stated that such a gross mistake cannot be expected/anticipated or made by such a qualified assessee and it is nothing but a failed attempt to evade taxes and had the case not been selected for scrutiny assessment under CASS, the assessee would have escaped the legitimate taxes. Hence, the Assessing Officer while passing the assessment order has rightly acknowledged/accepted the declared amount of Rs. 13.50 crores under the head “Shares and Securities”.
In response, the assessee filed his rejoinder submissions. In respect of the AO’s statement that a gross mistake of recording the investment amounting to Rs.13,50,00,000/- cannot be expected or made by a qualified assessee, it is nothing but a failed attempt to evade due taxes and hence, the assessee’s claim that the mistake was made
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta inadvertently due to clerical/typographical error holds no ground, assessee objected to the same and submitted that the allegations made by the A.O. are without any basis. It was submitted that the A.O. overlooked all the relevant documents pertaining to the investments made by the assessee. The A.O., at no point of time could contradict the evidence laid by the assessee reflecting the details of investments made by him. It was submitted that the assessee is not a tax professional and he relies on his tax consultant for filing the returns as well as other statutory compliances and for the year under consideration, the return of income was filed by the concerned tax professional and the assessee should not be punished for the bonafide mistake of the person who has uploaded the return of income and the assessee furnished following documents substantiating the investments made by him:
i. Certification by the Chartered Accountant ii. List of all shares & mutual funds iii. Consolidated Account Statement (CAS) for securities held in demat form and investments in mutual funds issued by CDSL iv. Holding report from Sharekhan Limited as on 31.03.2023 v. Allotment intimation from Mirae Asset mutual fund vi. Account Statement Sixth Sense India Opportunities III vii. Account statement as on 31.03.2023 by CAMS/Kfintech viii. Chart providing the summary of investments as on 31.03.2022 and 31.03.2023 10. It was further submitted by the assessee that his total investment as on 31.03.2022 was Rs. 1,96,81,250/- and the total investment as on 31.03.2023 was Rs.2,09,32,733/- and thus, in the year under consideration, he has made the net investment of Rs. 12,44,983/- only and the balance investment of Rs. 1,96,81,250/- was accumulated as on
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 31.03.2022. It was submitted that the assessee has submitted all the documentary evidence to explain the nature and source of the said investment. Hence, no addition is warranted under section 69 of the Act. Apart from the said investment, the assessee has no other investment in the shares and securities. It was reiterated that reporting the total investment as Rs. 13,50,00,000/- in the return of income was merely a clerical/typographical error on the part of the person who filed the assessee’s return of income. The said inadvertent mistake resulted into an addition of Rs. 12,76,80,270/- under section 69 of the Act assessee. Consequently, a huge demand of Rs. 12,54,50,470/- was also created against the assessee. The assessee strongly objects to the contentions of the A.O. and submits that the A.O. has no corroborative evidence to show that the assessee has made the investment of Rs. 13,50,00,000/-. Thus, the A.O. was not justified to make the addition of Rs. 12,76,80,270/- under section 69 of the Act merely based on the incorrect entry made in the return of income and the same is required to be deleted. Consequently, the invocation of section 115BBE of the Act needs to be cancelled.
Considering the submissions and additional evidences filed by the assessee and taking into consideration the remand report and the rejoinder submitted by the assessee, the ld. CIT(A) admitted the additional evidence in the interest of substantial justice. In this regard, the ld. CIT(A) has stated in the impugned order (para 6.1) that the assessee has filed certain additional documentary evidence and has contended that these details could not be furnished earlier due to inadvertent omission and misunderstanding regarding the clerical nature of the error. However, in the remand report, the AO has opposed admitting the additional evidence for the reason that ample opportunities were provided to the assessee during the course of assessment proceedings but at the same time, considering the magnitude of additions
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta to the tune of Rs. 12.76 crores and the fact that the evidences relate to core issue of investment, the requirement of rendering a speaking order based on complete material, and in exercise of powers under section 250(4) read with Rule 46A(1)(c) and (d), the additional evidence is admitted in the interest of substantial justice.
Thereafter, in para 6.2, the ld. CIT(A) has discussed the merits of the addition and finally has upheld the findings of the Assessing Officer and we deem it appropriate to reproduce the said findings which reads as under:
“6.2 GROUND NO. 1: Addition of Rs. 12,76,80,270/- u/s 69 r.w.s. 115BBE. In the original return as well as in the revised return of income the assessee had shown investment of Rs. 13,50,00,000/- in shares and securities under the head of financial assets. When the case was taken up for scrutiny and the AO confronted the assessee to explain the source of such huge investment shown in the original as well as revised returns, the assessee took the plea that the figure of investment was shown in the returns due to clerical error. The Core Issue to be decided is whether the declaration of Rs. 13.50 crore in Schedule AL of the return can be disregarded as a "clerical error" and whether the explanation furnished subsequently satisfactorily discharges burden under Section 69. There is no dispute that the appellant had declared Rs. 13,50,00,000/- as investment in Schedule AL of ITR with clear narration. This investment was shown not only in the duly verified original return but was again shown in the duly verified revised return. The assessee never came forward to point out it suo moto as a mistake rather he took plea of clerical error only when the case was taken up for scrutiny on other grounds and during examination of the case the AO asked the assessee to prove source of such huge investments shown in the returns of income. The AO has very well mentioned in the assessment order and in the remand report that had the case not been taken up for scrutiny the huge investments shown in the original as well as revised returns with clear narrations and under specific head of Financial assets would have attained finality and in the later years to come the assessee would have claimed that such investments were duly shown/declared in the return for the A Y 2023-24. The appellant has submitted that the department has not provided any evidence establishing the existence of the investment of Rs. 13,50,00,000/-. In this regard it may be observed here that once an assessee declares some income, assets or expenditure in his duly verified
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta return of income department is not required to provide any evidence establishing the existence of such income, assets or expenditure. During appellate proceedings the appellant has produced certain documentary evidences showing investments/assets to some lesser amount. Such evidences can at the best be accepted as positive evidences in support of investments/assets to the extent of amount shown in such documents but such documents can never conclusively prove that there were not investments more than that the amount shown in such documents. Once certain amount of investment or assets have been declared/shown by the assessee in his duly verified original and even in duly verified revised return, such investments/assets can not be accepted as declared due to some clerical mistake, particularly when such investments have been noticed by the AO and assessee is asked to prove source thereof. Admittedly, the assessee never brought such alleged clerical mistake to the notice of the department at his own. Having considered the facts of this case, this appears to be an after thought taken by the appellant. During assessment proceedings, when asked by the AO the assessee could prove the source of investments of Rs. 73,19,730/- only out of total investments shown in the return at Rs. 13,50,00,000/-. Accordingly, the difference of Rs. 12,76,80,270/- was treated by the AO as unexplained investment u/s 69. Section 69 provides that where investment is found and explanation offered is not satisfactory, the value may be deemed income.The burden in this regard lies on the assessee. In the instant case, following are the crucial facts: 1. The figure Rs. 13.50 crore was declared voluntarily in duly verified original as well duly verified revised return. 2. The alleged clerical mistake was neither corrected in the revised return filed nor any further revised return correcting such alleged error was filed. 3. No rectification application was filed immediately. 4. The plea of clerical mistake was taken only after the case was taken up for scrutiny and the AO asked the assessee to prove source of the specific investments shown/declared in the return. During assessment, only partial evidence was produced. 5. Explanation of "clerical error" is not supported by any independent evidence. The evidences produced by the appellant can prove the investment to the extent of amount shown in such documents but do not conclusively prove that there can be no
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta investments more than that shown in such documents. Even after admitting additional evidence, the appellant has only demonstrated existence of investments worth Rs. 2.09 crore. A return verified u/s 140 is a solemn declaration and it carries evidentiary weight. The Hon'ble Supreme Court in Pullangode Rubber Produce Co. Ltd. (91 ITR 18) held that admissions are important evidence and burden to retract lies heavily on maker.In CIT v. Usha International Ltd. (Full Bench), it was held that disclosures made in return carry evidentiary weight and cannot be lightly ignored. In view of above mentioned facts, the explanation lacks credibility. The Hon'ble Delhi High Court in CIT v. La Medica (250 ITR 575) held that when explanation is unconvincing and lacks corroboration, addition is justified. The plea of typographical error cannot override statutory admission without cogent proof. Thus, explanation is not satisfactory within meaning of Section 69. In view of above, the addition of Rs. 12,76,80,270/- made by the AO u/s 69 r.w.s. 115BBE is confirmed.”
Against the aforesaid findings of the ld CIT(A) wherein he has upheld the addition of Rs 12,76,80,270/-, the assessee is in appeal before us.
During the course of hearing, the ld. AR submitted that the AO has invoked the provisions of section 69 of the Act and made an addition of Rs. 12,76,80,270/-. The said addition is made on the basis of an incorrect figure of investment (shares and securities) of Rs.13,50,00,000/- reported in the return of income. It was submitted that reporting an incorrect figure of investment in shares and securities was an inadvertent mistake which has been admitted by the assessee and reasons for such inadvertent error has been duly submitted before the lower authorities. It was submitted that before the Ld.CIT(A), the assessee submitted all the details/documentation pertaining to the total investment (shares and securities) and the same were admitted by way of additional evidences and even the AO has acknowledged the same and figure thereof in his remand report and inspite of that, the Ld.CIT(A) has gone ahead and
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta uphold the stand of the A.O and being aggrieved by the order of Ld.CIT(A), the assessee has preferred the present appeal before this Tribunal.
It was submitted that the entries in the return, particularly in Schedule AL, serves only a disclosure function and does not impact tax computation, and the same cannot by itself justify an addition under section 69 unless supported by corroborative evidence. It was submitted that it is also well settled proposition that the power to make additions under Section 69 is discretionary and not automatic. In case of CIT v. P.K. Noorjahan [(1999) 237 ITR 570 (SC)], the Hon'ble Supreme Court held that where the assessee provides a reasonable and plausible explanation for the source of an alleged investment, and there is no contrary evidence on record, no addition should be made merely on account of a disclosed figure. It was submitted that before making an addition under Section 69, the Assessing Officer is required to bring on record concrete and positive material to support the alleged investment. It is also well- established legal principle that inadvertent errors or typographical mistakes in the return of income cannot be construed as conclusive proof of the existence of income or investment, particularly when the assessee has furnished credible and substantive evidence to clarify and rectify the mistake. In this regard, reliance was placed on the Hon'ble Bombay High Court decision in the case of DCIT v. Reliance Industries Ltd. [(2020) 424 ITR 686 (Bom)] wherein it was held that clerical mistakes or human errors should be viewed with leniency, provided the assessee offers a reasonable explanation supported by proper documentation. In the present case, the assessee has submitted detailed documentary evidence, including demat statements, mutual fund holdings, and bank records, all of which clearly reflect that the reported figure of Rs. 13.50 crores was an inadvertent error, and that the actual investment was only Rs. 2.09 crores fully funded by disclosed income. Therefore, the addition made solely on the basis of an incorrect entry is not tenable in law. The AO ought to
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta corroborate the same with the material available on record and in absence of any document in support of the same or any material otherwise fortifying the view of the AO, the aforesaid addition deserves to be deleted. It was submitted that the impugned addition is merely on the basis of a clerical reporting error in the Asset and Liability Schedule of the Income Tax Return and such arbitrary and unreasonable addition of Rs.12,76,80,270/- made under section 69 of the Act is not at all justified and the same be deleted.
It was further submitted that on part of the assessee, the necessary evidences in support of the investments have already been placed on record and a summary chart was submitted during the course of hearing showing the investments (shares and securities) made as on 31.03.2022 and the investment (shares and securities) made as on 31.03.2023 and the contents thereof read as under:
i. The consolidated chart showing total investments in shares, mutual funds and alternative investment funds made as on March 2022 and March 23 is enclosed at page 1 attached herewith. ii. The summery of total investments in shares and securities made in March 2022 and March 2023 and also the investment in shares and securities made during the year under consideration is attached at page 3 attached herewith. iii. The list of investments in shares and securities made in shares and securities as on 31.03.2022 is at pages 4-5. The total investment (shares and securities) made as on 31.03.2022 is amounting to Rs.1,50,78,978/-. However, inadvertently a figure of Rs.1,96,81,253/- was reported in the updated returns filed for the A.Y. 2022-23. It is pertinent to note that the difference of Rs.59,93,108/- is the investment (shares and securities) made in the year under consideration i.e. A.Y. 2023-24 and the same is duly included in the total investments (shares and securities) as on 31.03.2023. iv. The list of1 investments made in shares and securities as on 31.03.2023 is at pages 6 7. The total investment made in shares and securities as on 31.03.2023 is amounting to Rs.2,09,26,233/-. The said chart also reflects that, the Appellant has made total investment in shares and securities of Rs.59,93,108/- during the year under consideration.
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 17. It was submitted that the assessee has made investment in shares and securities to the tune of Rs.59,93,108/- only during the financial year relevant to the impugned assessment year duly supported by documentary evidences and where the Bench so decide, the matter may be remanded to the file of Jurisdictional Assessing Officer to verify the investments in shares and securities so made during the financial year relevant to the impugned assessment year.
The ld. DR has relied on the order and findings of the Assessing Officer as well as that of the ld. CIT(A). At the same time, the ld DR didn’t object where the matter is set-aside to the file of the AO for necessary verification.
We have heard the rival contentions and pursued the material available on record. The matter under consideration relates to addition of Rs 12,76,80,270 made by the AO invoking provisions of section 69 of the Act. Section 69 provides that where in the financial year immediately preceding the assessment year, the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.
On reading of the aforesaid provision, we find that it talks about the investments made by the assessee in the financial year; where books of accounts are maintained by the assessee and such investments are not recorded in the books of accounts; and the assessee either offers no explanation about the nature and source of such investments or the explanation offered by the assessee is not found satisfactory by the
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta Assessing officer, in such a situation, the value of investment may be deemed to be income of the assessee for such financial year.
Therefore, before invocation of provisions of section 69, the initial onus is on the Assessing officer to determine the investments made by the assessee during the financial year relevant to impugned assessment year 2023-24. Once the nature and quantum of investments are determined by the Assessing officer, the onus shifts on the assessee to explain the nature and source of such investments.
For the purposes, there is no denial of the fact that return of income so filed by the assessee would be a good starting point for the Assessing officer to verify the investments so made by the assessee and thereafter, seeks necessary documentation and call for the explanation from the assessee regarding the nature and source of such investments.
In the return of income so filed by the assessee for the impugned assessment year 2023-24 under the “schedule of Assets and liabilities”, the assessee has disclosed investments in shares and securities to the tune of Rs 13.50 crores. Here, it is relevant to note that these disclosures are in respect of assets (and liabilities) as at the end of the financial year and reflect the cumulative position of investments as on 31.03.2023 and doesn’t reflect the investments which were necessarily made during the financial year and remain invested as on 31.03.2023 as the same could possibly include the investments which were made during the earlier financial year and which have continued during the year under consideration. Apparently, there is no provision in the return of income to disclose corresponding figures of investments as on 31.03.2022. Therefore, basis such disclosure on a standalone basis and without further verification, it cannot be held that the assessee has made fresh
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta investments during the year under consideration to the tune of Rs 13.50 crores.
Further, we find that the Assessing officer thereafter has sought explanation from the assessee during the course of assessment proceedings and the assessee has submitted that the said figure of investment has been wrongly reported due to inadvertent error on part of the tax professional from whom the assessee has sought assistance with the filing of the return of income and further, the details of investments of Rs 73,19,730/- as on 31.03.23 along with supporting documentation were submitted. The Assessing officer allowed the credit of Rs 73,19,730/- and remaining amount of Rs 12,76,80,270/- was brought to tax as unexplained investments invoking provisions of section 69 of the Act.
As we have discussed earlier, what is relevant is quantum of investments made during the financial year however, we find that other than tax filing by the assessee, there is nothing on record to demonstrate that the assessee has made investments to the tune of Rs 13.50 crores during the financial year relevant to impugned assessment year and a presumption has thus been drawn by the Assessing officer that the value of the investments as on 31.03.23 is the value of investments which have been made during the financial year 2022-23 and that too, without any substantial basis. Further, once the assessee submits that the value of investments as on 31.03.23 is to the tune of Rs 73,19,730/- and the Assessing officer accepts that, and in such a situation, the question of retaining the value of investments at Rs 13.50 crores shows an inconsistent approach and lack of understanding on part of the Assessing officer.
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 26. At the same time, we find that the assessee during the course of appellate proceedings before the ld CIT(A) submitted that while filing the return of income, the value of investment in shares and securities as on 31.03.2023 were wrongly shown as Rs. 13.50 crores instead of Rs. 2,09,26,233/-. It was submitted that total investment as on 31.03.2022 was Rs. 1,96,81,250/- and as on 31.03.2023 was Rs. 2,09,32,733/-, and investment of Rs. 12,44,983/- has only been made by way of fresh investment during the year and the remaining investment has been carried forward from the earlier financial years.
We therefore find that it is for the first time during the appellate proceedings that the details of movement in the investments held by the assessee in terms of opening investments, closing investments and actual investments made during the year under consideration were brought on record by the assessee. It was further submitted that the said investment has been made by the assessee out of his own sources of income and the details of investment amounting to Rs. 73,19,730/- were duly submitted during the course of assessment proceedings and in respect of remaining investments, the assessee wishes to submit the additional evidences and has moved an application for admission of additional evidence under Rule 46A of the Income tax Rules and in respect of which, remand report was called from the Assessing officer.
We find that the Assessing officer acknowledged the fact that the assessee has submitted the documentation showing investment of Rs 2,09,26,233/- and at the same time objected to the admission thereof. The ld CIT(A) however held that the evidences so filed by the assessee relate to core issue of investment and the same were admitted in the interest of substantial justice. The Revenue is not in appeal against the said admission of additional evidence by the ld CIT(A) nor the said action
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta of the ld CIT(A) has been contested during the course of hearing before us.
The question that now arises for consideration is once the ld CIT(A) is ceased of the complete picture of the quantum of the investments held by the assessee – at the beginning of the financial year, investments made during the course of financial year and investments at the end of the financial year, and having admitted the additional evidences, what should be the appropriate course of action. To our mind, the value of the investments made during the year should have been considered and the explanation about the nature and source of such investments should be examined in context of provisions of section 69 invoked by the Assessing officer at first place.
We, however, find that the ld CIT(A) has gone back and referred to the tax filings done by the assessee and has held that such tax filings and disclosures made therein carry evidentiary value and cannot be ignored, the explanation of the assessee regarding mistake while filing the return of income lack credibility and confirmed the addition of Rs 12,76,80,270/- u/s 69 of the Act.
In this regard, we find that there cannot be any manner of dispute that the tax filings u/s 139 are voluntary disclosures made by the assessee in terms of income which has accrued/received during the financial year and relates disclosures of assets (liabilities) as at the end of the financial year. At the same time, it is also a settled legal proposition that it is only the legitimate taxes mandated by law which can be recovered from the assessee and no tax shall be levied or collected except by authority of law.
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta 32. The assessee has admittedly neither revised the return of income nor moved any rectification application, however, once the ld CIT(A) is ceased of the matter originating from the assessment proceedings and contested by the assessee and having admitted the additional evidence lead by the assessee, the ld CIT(A) ought to have examined the additional evidence and decided the matter instead of confirming the findings of the AO. We find that such an action on part of the ld CIT(A) brings an inherent contradiction in the approach adopted by him where, on one hand, he has admitted the additional evidence holding that the same relates to core issue of investment and at the same time, completely ignoring the same and thus defeating the very purposes of admission of such evidence.
Regarding disclosure of assets in the return of income, the ld CIT(A) has failed to appreciate that such disclosure was in respect of investments as on close of the financial year and not the investments which were made during the financial year and which can only be made subject matter of addition, if any, by invoking the deeming provisions of section 69 of the Act. As we have stated earlier, the tax filings are a good starting point for the Assessing officer to examine the quantum and source of investments, however, the initial onus before invoking the provisions of section 69 is on the Assessing officer and not the assessee. The Assessing officer has to lead positive evidence that the assessee has made certain investments during the year and the quantum of such investments and thereafter, the explanation of the assessee has to be sought which thereafter have to be tested by the Assessing officer on the principle of reasonability.
In light of aforesaid discussion, we are of the considered view that the matter needs to be restored to the file of the AO to examine the matter afresh in light of the aforesaid discussion as so agreed by both parties
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta during the course of hearing. Taking into considerations the investments made in the earlier years as well as investments which have been carried forward in subsequent years, the AO shall determine and examine the value of the investments made during the year and the explanation from the assesse shall be sought and examined about the nature and source of such investments and thereafter decide the matter in accordance with law after providing reasonable opportunity to the assessee. The assessee is also directed to furnish all relevant information/documentation in terms of details of the investments and related investment and bank records and furnish any other information/documentation as sought by the AO and/or as advised and is at liberty to raise the necessary contentions as so advised.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 15.09.2026
Sd/- Sd/- SIDDHARTHA NAUTIYAL VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)
Mumbai, Dated: 15.09.2026 Karishma J. Pawar, SR. PS
Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file
ITA No. 3287/Mum/2026; A.Y. 2023-24 Kashyap Ghanshyam Mehta By Order
Dy./Asst. Registrar I.T.A.T, Mumbai
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