DALBIR SINGH, JIND vs. INCOME TAX OFFICER, WARD-1, JIND

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ITA 1185/CHANDI/2025Status: DisposedITAT Chandigarh17 August 2026AY 2015-165 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 69 is attracted only when investments are unrecorded in the books of account. Since the investment in land was duly reflected in the assessee's financial statements, Section 69 could not be invoked. The addition was not sustainable on merits.

What were the facts?

The assessee purchased property for Rs. 126.58 Lacs, which was significantly higher than their declared income. The Assessing Officer treated this entire amount as unexplained investment. The assessee claimed the investment was made over several financial years from loans.

What were the issues?

Whether an investment duly recorded in the books of account can be treated as unexplained investment under Section 69 if the Assessing Officer is not satisfied with the source of funds. Whether investments made in earlier financial years can be taxed in the current assessment year.

Which sections of the Income-tax Act were involved?

Section 69,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHANDIGARH PHYSCIAL HEARING BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM आयकरअपीलसं. / ITA No.1185/CHANDI/2025 (िनधा�रणवष� / Assessment Year: 2015-16) Dalbir Singh ITO Ward - 1 बनाम/ House No. 190, Village Haivatpur Kothi No. 1234, Urban Estate, Jind PO Nirjan, Tehsil Jind Haryana – 126102 Vs. Haryana– 126102 �ायीलेखासं./जीआइआरसं./PAN/GIR No. CUBPS-6408-K (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Ashok Goyal & Sh. Tarun Jindal (CA’s) – Ld. ARs ��थ�कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 10-08-2026 घोषणाकीतारीख /Date of Pronouncement 17-08-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 22.07.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 29.03.2022. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.126.58 Lacs. Having heard rival submissions, the appeal is disposed-off as under.

2.

The assessee’s return of income as filed at Rs.2.48 Lacs was initially processed u/s 143(1). However, pursuant to receipt of information that the assessee purchased property for Rs.126.58 Lacs, the case was reopened. The assessee is stated to be engaged in business of poultry and allied activities from which the assessee declared business income. In the recorded reasons, it was alleged by Ld. AO that assessee’s Income Tax Return was not commensurate with the financial transaction of purchase of property and it was alleged that there was unexplained investment to the extent of Rs.126.58 Lacs. The assessee refuted the allegations of Ld. AO and stated that the impugned investment was made out of explained sources over different financial years which could be tabulated as under: - FY Amount of Investment (Rs.) 2012-13 Rs.45.75 Lacs 2013-14 Rs.50.72 Lacs 2014-15 Rs.36.58 Lacs Total Rs.133.05 Lacs In this year, the investment was only for Rs.36.58 Lacs and the stated investment was reflected in respective Balance Sheets. The investment was stated to be sourced out of loans taken by the assessee. The Ld. AO, going by the fact that the assessee had capital balance of Rs.32.80 Lacs, rejected the claim of the assessee. Finally, the amount of Rs.126.58 Lacs was added as unexplained investment u/s 69. The Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us.

Our findings and Adjudication 3. We have carefully heard the rival submissions and perused the material available on record. The short controversy before us is whether the Assessing Officer was justified in treating the entire amount of Rs.126.58 Lacs as unexplained investment u/s 69 of the Act, notwithstanding the fact that the assessee had duly reflected the investment in land in his financial statements over different years and had furnished an explanation regarding the source thereof. 4. On perusal of the Balance Sheet as on 31.03.2015, as placed on record, we find that the assessee has disclosed investment in land amounting to Rs.133.06 Lacs. Thus, the very investment which has been treated by Ld. AO as unexplained investment stood duly reflected in the books / financial statements of the assessee. In our considered opinion, the provisions of Section 69 would be attracted only where the assessee has made investments which are not found recorded in the books of account and the assessee either offers no explanation regarding the nature and source thereof or the explanation so offered is not found to be satisfactory. The first and foundational requirement for invoking Section 69 is, therefore, that the investment should be unrecorded. The same is not the case here. Merely because Ld. AO was not satisfied with the sources of such investment, the same, by itself, would not convert a duly recorded investment into an investment falling within the mischief of Section 69. The distinction between an investment which is not recorded in the books and an investment whose source is alleged to be unsatisfactory

cannot be lost sight of while invoking a deeming provision such as Section 69. Therefore, in our considered opinion, the essential condition for invoking Section 69 is not satisfied on the facts of the present case. 5. It could further be seen that investment made by the assessee during this year is Rs.36.58 Lacs only whereas Ld. AO has made entire addition though part of the investment has been made in earlier years. Such an approach, in our considered view, cannot be sustained. The provisions of Section 69 are year-specific and contemplate a deeming of the value of investment as income of the financial year in which the investment has been made. Consequently, an investment pertaining to earlier financial years cannot be mechanically brought to tax in AY 2015-16 merely because information regarding the aggregate property transaction was received during the course of the reassessment proceedings. We further find that the assessee duly furnished evidences qua unsecured loans which have not been doubted since the provisions of Sec.68 have not been invoked by Ld. AO while framing the assessment. A mere comparison between the assessee's capital balance and the amount of investment cannot justify the invocation of deeming fiction contained in Sec.69. 6. Finally on the given facts and circumstances of the case, the impugned addition could not be sustained on merits. We order so. Delving into the legal ground has been rendered academic in nature.

7.

In the result, the appeal of the assessee is allowed. Order pronounced on 17th August, 2026

-Sd- -Sd- (RAJESH DAMODARLAL SHARMA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 17-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH

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