TEEVRA EDUTECH PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, WARD 12(2)(1), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the Assessee is directed against order dated 30.10.2025, passed by the learned Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short, “the learned CIT(A)”], for Assessment Year 2022–23, raising following grounds:

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“Grounds of appeal rounds of appeal - 1. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Income Tax (Appeals) has erred in confirming the addition made by the Id. A.O. of Income Tax (Appeals) has erred in confirming the addition made by the Id. A.O. of Income Tax (Appeals) has erred in confirming the addition made by the Id. A.O. of Rs.2,90,36,755/- u/s 69 of the Act on account of non compliance of one notice out u/s 69 of the Act on account of non compliance of one notice out u/s 69 of the Act on account of non compliance of one notice out of six notices issued u/s 133(6) of the Act ignoring the fact that relevant details / of six notices issued u/s 133(6) of the Act ignoring the fact that relevant of six notices issued u/s 133(6) of the Act ignoring the fact that relevant evidences were submitted by the appellant evidences were submitted by the appellant 2. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in not considering that the ld. A.O. has arbitrarily Income Tax (Appeals) has erred in not considering that the ld. A.O. has arbitrarily Income Tax (Appeals) has erred in not considering that the ld. A.O. has arbitrarily rejected the explanation of the appellant rejected the explanation of the appellant submitted in response to SCN for the submitted in response to SCN for the impugned addition 3. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the conclusion of the ld. A.O. that Income Tax (Appeals) has erred in confirming the conclusion of the ld. A.O. that Income Tax (Appeals) has erred in confirming the conclusion of the ld. A.O. that provisions of section 69 are applicable provisions of section 69 are applicable though the transactions of issue of equity though the transactions of issue of equity shares against intangible fixed assets are duly recorded in the audited books of shares against intangible fixed assets are duly recorded in the audited books of shares against intangible fixed assets are duly recorded in the audited books of account & reflected in the audited financial statements of the appellant and non account & reflected in the audited financial statements of the appellant and non account & reflected in the audited financial statements of the appellant and non recording in the books of account is a precondition recording in the books of account is a precondition to invoke the provisions of to invoke the provisions of section 69 of the Act. section 69 of the Act. 4. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming addition of Rs. 2,90,36,755/- u/s Income Tax (Appeals) has erred in confirming addition of Rs. 2,90,36,755/ Income Tax (Appeals) has erred in confirming addition of Rs. 2,90,36,755/ 69 r.w.s.115BBE made by 69 r.w.s.115BBE made by ld. A.O. and failed to appreciate the fact that it was a appreciate the fact that it was a genuine transaction. genuine transaction. 5. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the impugned addition of Income Tax (Appeals) has erred in confirming the impugned addition of Income Tax (Appeals) has erred in confirming the impugned addition of Rs.2,90,36,755/- though the ld. A. O. stated that t though the ld. A. O. stated that the transaction has never he transaction has never happened & if that is so then question of making addition simply does not arise happened & if that is so then question of making addition simply does not arise happened & if that is so then question of making addition simply does not arise on the ground of unexplained investment on the finding of the A.O. itself. on the ground of unexplained investment on the finding of the A.O. itself. on the ground of unexplained investment on the finding of the A.O. itself. 6. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Income Tax (Appeals) has erred in confirming the action of the Id. A. O. for not Income Tax (Appeals) has erred in confirming the action of the Id. A. O. for not Income Tax (Appeals) has erred in confirming the action of the Id. A. O. for not making any further inquiry to verify the genuineness of the documents submitted making any further inquiry to verify the genuineness of the documents submitted making any further inquiry to verify the genuineness of the documents submitted in the proceeding from the MCA website OR by issuing summons u/s 131 of the in the proceeding from the MCA website OR by issuing summons u/s 131 of the in the proceeding from the MCA website OR by issuing summons u/s 131 of the Act to the party OR through Verification Unit before arriving at an erroneous OR through Verification Unit before arriving at an erroneous OR through Verification Unit before arriving at an erroneous conclusion. 7. On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in arriving at an erroneous conclusion that Income Tax (Appeals) has erred in arriving at an erroneous conclusion that Income Tax (Appeals) has erred in arriving at an erroneous conclusion that addition for Rs.2,90,36,755/ addition for Rs.2,90,36,755/- can be made u/s 68 of the Act ignoring the finding can be made u/s 68 of the Act ignoring the finding of the A.O. that the transaction never happened & if so how the addition u/s 68 of the A.O. that the transaction never happened & if so how the addition u/s 68 of the A.O. that the transaction never happened & if so how the addition u/s 68 is not at all warranted. is not at all warranted.

Teevra Edutech Private Limited Teevra Edutech Private Limited 3 ITA No. 7224/MUM/2025

2.1 During the course of assessment proceedings, the During the course of assessment proceedings, the During the course of assessment proceedings, the ld. Assessing Officer observed that the assessee had recorded Assessing Officer observed that the assessee had recorded Assessing Officer observed that the assessee had recorded investments aggregating to investments aggregating to ₹7,18,89,026/- and unsecured loans and unsecured loans amounting to ₹48,50,000/ 48,50,000/- in its books of account. For the purpose in its books of account. For the purpose of verification, notices under section 133(6) of the Act were issued to of verification, notices under section 133(6) of the Act were issued to of verification, notices under section 133(6) of the Act were issued to parties in respect of the investments and loans. While responses parties in respect of the investments and loans. While responses parties in respect of the investments and loans. While responses

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were received from the other parties, no reply was furnished by one were received from the other parties, no reply was furnished by on were received from the other parties, no reply was furnished by on of the entities, namely, M/s Namah Educational Institute Pvt. Ltd. of the entities, namely, M/s Namah Educational Institute Pvt. Ltd. of the entities, namely, M/s Namah Educational Institute Pvt. Ltd. 2.2 The ld. Assessing Officer noted that during the relevant Assessing Officer noted that during the relevant Assessing Officer noted that during the relevant previous year the assessee had allotted equity shares aggregating to previous year the assessee had allotted equity shares aggregating to previous year the assessee had allotted equity shares aggregating to ₹2,90,36,755/- to M/s Namah Educational Institute Pvt. Lt to M/s Namah Educational Institute Pvt. Ltd. to M/s Namah Educational Institute Pvt. Lt against acquisition of intangible assets comprising goodwill valued against acquisition of intangible assets comprising goodwill valued against acquisition of intangible assets comprising goodwill valued at ₹99,69,730/- and non compete rights valued at ₹1,90,67,025/-. and non-compete rights valued at In response to the query regarding non In response to the query regarding non-compliance with the notice compliance with the notice issued under section 133(6), the assessee explained that the said issued under section 133(6), the assessee explained th issued under section 133(6), the assessee explained th notice had not been received by the concerned party. The assessee notice had not been received by the concerned party. The assessee notice had not been received by the concerned party. The assessee further furnished extensive documentary evidence, including the further furnished extensive documentary evidence, including the further furnished extensive documentary evidence, including the agreement for allotment of shares, Board resolutions, Form PAS-3, agreement for allotment of shares, Board resolutions, Form PAS agreement for allotment of shares, Board resolutions, Form PAS Form MGT-14, statutory challans, share certifica 14, statutory challans, share certifica 14, statutory challans, share certificates and other supporting documents evidencing the transaction. The assessee supporting documents evidencing the transaction. The assessee supporting documents evidencing the transaction. The assessee also placed on record the agreement executed with M/s Namah also placed on record the agreement executed with M/s Namah also placed on record the agreement executed with M/s Namah Educational Institute Pvt. Ltd. under which the aforesaid intangible Educational Institute Pvt. Ltd. under which the aforesaid intangible Educational Institute Pvt. Ltd. under which the aforesaid intangible assets were acquired in consideration of issuance o assets were acquired in consideration of issuance of equity shares. f equity shares. 2.3 The ld. Assessing Officer, however, remained unconvinced. Assessing Officer, however, remained unconvinced. Assessing Officer, however, remained unconvinced. Proceeding solely on the premise that no response had been Proceeding solely on the premise that no response had been Proceeding solely on the premise that no response had been received from M/s Namah Educational Institute Pvt. Ltd. in received from M/s Namah Educational Institute Pvt. Ltd. in received from M/s Namah Educational Institute Pvt. Ltd. in response to the notice issued under section 133(6), he concluded response to the notice issued under section 133(6), he conc response to the notice issued under section 133(6), he conc that that that the the the assessee assessee assessee had had had failed failed failed to to to establish establish establish the the the identity, identity, identity, creditworthiness and genuineness of the transaction. Consequently, creditworthiness and genuineness of the transaction. Consequently, creditworthiness and genuineness of the transaction. Consequently,

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he held that the source of the investment represented by the he held that the source of the investment represented by the he held that the source of the investment represented by the aforesaid intangible assets amounting to ₹2,90,36,755/ aforesaid intangible assets amounting to 2,90,36,755/- remained unexplained and, accordingly, invoked the provisions of section 69 nexplained and, accordingly, invoked the provisions of section 69 nexplained and, accordingly, invoked the provisions of section 69 of the Act. The relevant finding of the The relevant finding of the Assessing Officer Assessing Officer is reproduced as under: reproduced as under:

“3.5.1 As discussed above, the assessee during the period under consideration 3.5.1 As discussed above, the assessee during the period under consideration 3.5.1 As discussed above, the assessee during the period under consideration has submitted details of has submitted details of intangible asset added total amounting to intangible asset added total amounting to Rs.7,18,89,026/-. In order to verify the identity, creditworthiness and . In order to verify the identity, creditworthiness and . In order to verify the identity, creditworthiness and genuineness of the transaction, notices u/s 133(6) of the Act have been issued genuineness of the transaction, notices u/s 133(6) of the Act have been issued genuineness of the transaction, notices u/s 133(6) of the Act have been issued to around 3 (three) parties requiring each party to furnish their reply by to around 3 (three) parties requiring each party to furnish the to around 3 (three) parties requiring each party to furnish the 04.03.2024. The notices have been duly delivered through their respective 04.03.2024. The notices have been duly delivered through their respective 04.03.2024. The notices have been duly delivered through their respective registered e-mail ID. However, no reply/confirmation have been received from mail ID. However, no reply/confirmation have been received from mail ID. However, no reply/confirmation have been received from M/s Namah Educational Institute P. Ltd., whose details are given below – M/s Namah Educational Institute P. Ltd., whose details are given below M/s Namah Educational Institute P. Ltd., whose details are given below Name PAN Asset Value(Rs.) 1 Namah Educational Namah Educational AACCN 2357 A Goodwill Goodwill & & Non 2,90,36,755 Non Institute P. Ltd. Institute P. Ltd. compete fee

Since no reply has been received from the above parties, the identity, Since no reply has been received from the above parties, the identity, Since no reply has been received from the above parties, the identity, creditworthiness and genuineness of the transaction cannot be verified and still creditworthiness and genuineness of the transaction cannot be verified and still creditworthiness and genuineness of the transaction cannot be verified and still remain unverified. 3.5.2 In view of above, it is evident that no actual transaction has ever happened In view of above, it is evident that no actual transaction has ever happened In view of above, it is evident that no actual transaction has ever happened with M/s Namah Educational Institute P. Ltd., and the purported transaction Namah Educational Institute P. Ltd., and the purported transaction Namah Educational Institute P. Ltd., and the purported transaction carried out during the year under consideration with the assessee are sham / carried out during the year under consideration with the assessee are sham / carried out during the year under consideration with the assessee are sham / bogus without any economic rationale. The said parties have failed to furnish any ogus without any economic rationale. The said parties have failed to furnish any ogus without any economic rationale. The said parties have failed to furnish any information/documents to substantiate the identity and genuineness of the information/documents to substantiate the identity and genuineness of the information/documents to substantiate the identity and genuineness of the transactions. The assessee had to carry out genuine business transaction with transactions. The assessee had to carry out genuine business transaction with transactions. The assessee had to carry out genuine business transaction with the said parties. In th the said parties. In the instant case, it is ascertained that since no actual e instant case, it is ascertained that since no actual transaction has taken place or since the party itself is not carrying out any transaction has taken place or since the party itself is not carrying out any transaction has taken place or since the party itself is not carrying out any business activities (or with the assessee) it failed to comply to the notices and business activities (or with the assessee) it failed to comply to the notices and business activities (or with the assessee) it failed to comply to the notices and communication made by the department. Hen communication made by the department. Hence, the sources of investment in the ce, the sources of investment in the intangible asset amounting to Rs. 2,90,36,755/ intangible asset amounting to Rs. 2,90,36,755/- still remained unexplained. still remained unexplained. 3.5.3 In view of the fact as discussed above, and in the absence of sources of 3.5.3 In view of the fact as discussed above, and in the absence of sources of 3.5.3 In view of the fact as discussed above, and in the absence of sources of investment in the said intangible asset along with documentary evidence, Rs. investment in the said intangible asset along with documentary e investment in the said intangible asset along with documentary e 2,90,36,755/-, being value of the asset added, is hereby treated as unexplained , being value of the asset added, is hereby treated as unexplained , being value of the asset added, is hereby treated as unexplained investment u/s 69 of the Act on which tax is being charged as per provisions of investment u/s 69 of the Act on which tax is being charged as per provisions of investment u/s 69 of the Act on which tax is being charged as per provisions of section 115BBE of the Act and the same is added back to the income of the section 115BBE of the Act and the same is added back to the income of the section 115BBE of the Act and the same is added back to the income of the assessee.

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(Addition u/s 69 of Rs. 2,90,36,755/-) (Addition u/s 69 of Rs. 2,90,36,755/ 3. Aggrieved, the assessee carried the matter in appeal before the Aggrieved, the assessee carried the matter in appeal before the Aggrieved, the assessee carried the matter in appeal before the learned CIT(A). It was contended that the Assessing Officer had learned CIT(A). It was contended that the Assessing Officer had learned CIT(A). It was contended that the Assessing Officer had fundamentally misdirected himself in law by invoking section 69 of fundamentally misdirected himself in law by invoking section 69 of fundamentally misdirected himself in law by invoking section 69 of the Act. According to the assessee, considerations relating to the Act. According to the assessee, considerations relating t the Act. According to the assessee, considerations relating t identity, creditworthiness and genuineness are germane to identity, creditworthiness and genuineness are germane to identity, creditworthiness and genuineness are germane to proceedings under section 68 and have no application where an proceedings under section 68 and have no application where an proceedings under section 68 and have no application where an addition is sought to be made under section 69. It was further addition is sought to be made under section 69. It was further addition is sought to be made under section 69. It was further submitted that the impugned transaction stood duly recorded in the submitted that the impugned transaction stood duly recorded in the submitted that the impugned transaction stood duly recorded in the books of account and was reflected in the audited financial s of account and was reflected in the audited financial s of account and was reflected in the audited financial statements, thereby rendering the provisions of section 69 wholly statements, thereby rendering the provisions of section 69 wholly statements, thereby rendering the provisions of section 69 wholly inapplicable. The assessee also asserted that the Assessing Officer inapplicable. The assessee also asserted that the Assessing Officer inapplicable. The assessee also asserted that the Assessing Officer had proceeded mechanically, without undertaking any meaningful had proceeded mechanically, without undertaking any meaningful had proceeded mechanically, without undertaking any meaningful enquiry and without properly appreciating the documentary uiry and without properly appreciating the documentary uiry and without properly appreciating the documentary evidence placed on record. The learned CIT(A), however, was not evidence placed on record. The learned CIT(A), however, was not evidence placed on record. The learned CIT(A), however, was not persuaded by the aforesaid submissions and proceeded to uphold persuaded by the aforesaid submissions and proceeded to uphold persuaded by the aforesaid submissions and proceeded to uphold the action of the Assessing Officer. While doing so, he extensively the action of the Assessing Officer. While doing so, he extensively the action of the Assessing Officer. While doing so, he extensively referred to the documents and explanations furnished by the ed to the documents and explanations furnished by the ed to the documents and explanations furnished by the assessee, the relevant assessee, the relevant portion whereof reads as under: portion whereof reads as under:

“3.3.1 On the issue of addition of intangible asset, the assessee in response to 3.3.1 On the issue of addition of intangible asset, the assessee in response to 3.3.1 On the issue of addition of intangible asset, the assessee in response to the show cause notice had furnished certain details/documents - agreement for the show cause notice had furnished certain details/documents the show cause notice had furnished certain details/documents allotment of shares, Board resolution, PASS allotment of shares, Board resolution, PASS-3, MGT-14, challan, share certificate 14, challan, share certificate etc., and also requested for availing of personal hearing through Video etc., and also requested for availing of personal hearing through Video etc., and also requested for availing of personal hearing through Video Conference. The submission filed by the assessee has been examined and placed Conference. The submission filed by the assessee has been examined and placed Conference. The submission filed by the assessee has been examined and placed on record. Accordingly, opportunity of Personal Hearing has also been adduced to ordingly, opportunity of Personal Hearing has also been adduced to ordingly, opportunity of Personal Hearing has also been adduced to the assessee by issuing of intimation dated 18.03.2024 and the hearing was the assessee by issuing of intimation dated 18.03.2024 and the hearing was the assessee by issuing of intimation dated 18.03.2024 and the hearing was fixed for 19.03.2024 at 03:00 PM. Shri Ashok Parihera, CA and Shri Ashish Jalan fixed for 19.03.2024 at 03:00 PM. Shri Ashok Parihera, CA and Shri Ashish Jalan fixed for 19.03.2024 at 03:00 PM. Shri Ashok Parihera, CA and Shri Ashish Jalan

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attended the conference/meetin attended the conference/meeting on the appointed date and time. The assessee, g on the appointed date and time. The assessee, through its representative, has submitted that the company had entered into an through its representative, has submitted that the company had entered into an through its representative, has submitted that the company had entered into an agreement with Namah for allotment of share in lieu of intangible asset (Goodwill agreement with Namah for allotment of share in lieu of intangible asset (Goodwill agreement with Namah for allotment of share in lieu of intangible asset (Goodwill and Non Compete fee) and the shares have been a and Non Compete fee) and the shares have been allotted by following the due llotted by following the due process and also furnished copy of certain documents as already stated above. process and also furnished copy of certain documents as already stated above. process and also furnished copy of certain documents as already stated above. The relevant part of the submission has been captured and produced as below – The relevant part of the submission has been captured and produced as below The relevant part of the submission has been captured and produced as below c. Namah Educational Pvt Ltd, for Goodwill and Non Namah Educational Pvt Ltd, for Goodwill and Non-compete fees, Rs. Namah Educational Pvt Ltd, for Goodwill and Non 2,90,36,755/: 90,36,755/: i. Understand from Namah that they have not received any notice from the Income . Understand from Namah that they have not received any notice from the Income . Understand from Namah that they have not received any notice from the Income tax department and therefore have not responded, tax department and therefore have not responded, ii. The company had entered into an agreement with Namah, the copy of this ii. The company had entered into an agreement with Namah, the copy of this ii. The company had entered into an agreement with Namah, the copy of this agreement was uploaded on the income tax portal vide our response dated agreement was uploaded on the income tax portal vide our response dated agreement was uploaded on the income tax portal vide our response dated 07/03/2024, Teevra had allotted Equity shares, on 20th May, 2021, as a total 07/03/2024, Teevra had allotted Equity shares, on 20th May, 2021, as a total 07/03/2024, Teevra had allotted Equity shares, on 20th May, 2021, as a total consideration as per the terms o consideration as per the terms of this agreement. iii. The shares have been allotted by following the due process as prescribed iii. The shares have been allotted by following the due process as prescribed iii. The shares have been allotted by following the due process as prescribed under the Companies Act, 2013 and the requisite documents have been uploaded Companies Act, 2013 and the requisite documents have been uploaded Companies Act, 2013 and the requisite documents have been uploaded on the MCA portal at the time of allotment of such shares, on the MCA portal at the time of allotment of such shares, iv. These documents hav iv. These documents have already been uploaded on the income tax portal along e already been uploaded on the income tax portal along with our responses dated 16.03.2024, with our responses dated 16.03.2024, v. These documents include EGM & Board Resolutions, PASS v. These documents include EGM & Board Resolutions, PASS v. These documents include EGM & Board Resolutions, PASS-3 (Return of allotment) on MCA portal, copy of challan paid for PASS allotment) on MCA portal, copy of challan paid for PASS-3 filing, MGT 3 filing, MGT-14, copy of challan paid for MGT for MGT-14 filing, Stamp duty challan paid for issue of Equity share 14 filing, Stamp duty challan paid for issue of Equity share certificate, etc. vi. These documents can be independently verified by the Income tax department vi. These documents can be independently verified by the Income tax department vi. These documents can be independently verified by the Income tax department on MCA portal, on MCA portal, vii. The company has fulfilled all its obligation under the statute, . The company has fulfilled all its obligation under the statute, . The company has fulfilled all its obligation under the statute, viii. Having submitted above documents and availability of confirmation on MCA Having submitted above documents and availability of confirmation on MCA Having submitted above documents and availability of confirmation on MCA portal this cannot be called as Sham/Bogus transaction without any economic portal this cannot be called as Sham/Bogus transaction without any economic portal this cannot be called as Sham/Bogus transaction without any economic rationale, ix. This transaction is genuine business transaction carried out under normal ix. This transaction is genuine business transaction carried out under normal ix. This transaction is genuine business transaction carried out under normal course of busines course of business at arm's length and therefore cannot be included in the s at arm's length and therefore cannot be included in the proposed variation, proposed variation, x. Furthermore, it is an addition to the fixed assets required to carry out the x. Furthermore, it is an addition to the fixed assets required to carry out the x. Furthermore, it is an addition to the fixed assets required to carry out the business of operations of the company and therefore cannot be called as an operations of the company and therefore cannot be called as an operations of the company and therefore cannot be called as an investment, xi. The company has duly recorded these transactions in the books of account mpany has duly recorded these transactions in the books of account mpany has duly recorded these transactions in the books of account under the head of "Intangible Assets" (part of Fixed Assets), under the head of "Intangible Assets" (part of Fixed Assets), xii. The transaction with Namah is neither an Investment nor it is undisclosed in xii. The transaction with Namah is neither an Investment nor it is undisclosed in xii. The transaction with Namah is neither an Investment nor it is undisclosed in the books and therefore, it cannot fall under the books and therefore, it cannot fall under the ambit of Section 69 of the act. the ambit of Section 69 of the act. As

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this transaction does not fall under the ambit of Section 69 and any addition u/s this transaction does not fall under the ambit of Section 69 and any addition u/s this transaction does not fall under the ambit of Section 69 and any addition u/s this section, if made, will be misuse of powers. this section, if made, will be misuse of powers.” 4. Before us, the learned counsel appearing for the assessee Before us, the learned counsel appearing for the assessee Before us, the learned counsel appearing for the assessee filed a paper book containing pages 1 to 128. He aining pages 1 to 128. He assailed the orders of assailed the orders of the authorities below and submitted that the impugned addition of the authorities below and submitted that the impugned addition of the authorities below and submitted that the impugned addition of ₹2,90,36,755/- is wholly unsustainable both on facts and in law. is wholly unsustainable both on facts and in law. is wholly unsustainable both on facts and in law. Drawing our attention to the grounds of appeal, it was contended Drawing our attention to the grounds of appeal, it was contended Drawing our attention to the grounds of appeal, it was contended that the Assessing Officer proceeded merely on account of non Assessing Officer proceeded merely on account of non- Assessing Officer proceeded merely on account of non compliance of a single notice issued under section 133(6) of the Act compliance of a single notice issued under section 133(6) of the Act compliance of a single notice issued under section 133(6) of the Act to M/s Namah Educational Institute Pvt. Ltd., while completely to M/s Namah Educational Institute Pvt. Ltd., while completely to M/s Namah Educational Institute Pvt. Ltd., while completely disregarding the extensive documentary evidence furnished by the disregarding the extensive documentary evidence furnished by the disregarding the extensive documentary evidence furnished by the assessee in support of the transaction. ee in support of the transaction. 4.1 The learned counsel submitted that the assessee had placed The learned counsel submitted that the assessee had placed The learned counsel submitted that the assessee had placed on record the agreement for acquisition of goodwill and non- on record the agreement for acquisition of goodwill and non on record the agreement for acquisition of goodwill and non compete rights, Board and shareholders’ resolutions, Form PAS-3, compete rights, Board and shareholders’ resolutions, Form PAS compete rights, Board and shareholders’ resolutions, Form PAS Form MGT-14, challans evidencing s 14, challans evidencing statutory filings before the tatutory filings before the Ministry of Corporate Affairs, share certificates and other Ministry of Corporate Affairs, share certificates and other Ministry of Corporate Affairs, share certificates and other contemporaneous records establishing that equity shares were contemporaneous records establishing that equity shares were contemporaneous records establishing that equity shares were allotted against acquisition of identifiable intangible assets. It was allotted against acquisition of identifiable intangible assets. It was allotted against acquisition of identifiable intangible assets. It was argued that all such documents forme argued that all such documents formed part of the assessment d part of the assessment record and their authenticity was never disproved by the Assessing record and their authenticity was never disproved by the Assessing record and their authenticity was never disproved by the Assessing Officer. 4.2 It was further submitted that the Assessing Officer arbitrarily It was further submitted that the Assessing Officer arbitrarily It was further submitted that the Assessing Officer arbitrarily rejected the explanation furnished by the assessee without rejected the explanation furnished by the assessee without rejected the explanation furnished by the assessee without

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conducting any independent conducting any independent enquiry whatsoever. Despite the enquiry whatsoever. Despite the assessee specifically pointing out that the transaction and the assessee specifically pointing out that the transaction and the assessee specifically pointing out that the transaction and the corresponding statutory filings were verifiable from the records corresponding statutory filings were verifiable from the records corresponding statutory filings were verifiable from the records maintained on the MCA portal, no effort was made either to verify maintained on the MCA portal, no effort was made either to verify maintained on the MCA portal, no effort was made either to verify the documents from the concer the documents from the concerned authorities, to invoke the ned authorities, to invoke the provisions of section 131 of the Act, or to seek verification through provisions of section 131 of the Act, or to seek verification through provisions of section 131 of the Act, or to seek verification through any other statutory mechanism. According to the learned counsel, any other statutory mechanism. According to the learned counsel, any other statutory mechanism. According to the learned counsel, the conclusion that the transaction was sham or non-genuine was the conclusion that the transaction was sham or non the conclusion that the transaction was sham or non thus founded merely upon s thus founded merely upon suspicion and conjecture, unsupported uspicion and conjecture, unsupported by any cogent material on record. by any cogent material on record.

4.3 The learned counsel further contended that the very The learned counsel further contended that the very The learned counsel further contended that the very foundation of the addition under section 69 of the Act is legally foundation of the addition under section 69 of the Act is legally foundation of the addition under section 69 of the Act is legally untenable. Referring to the language employed in section 69, it was untenable. Referring to the language employed in section 69, it untenable. Referring to the language employed in section 69, it submitted that the jurisdictional condition precedent for invoking submitted that the jurisdictional condition precedent for invoking submitted that the jurisdictional condition precedent for invoking the said provision is the existence of an investment which is not the said provision is the existence of an investment which is the said provision is the existence of an investment which is recorded in the books of account recorded in the books of account maintained by the assessee. In maintained by the assessee. In the present case, the acquisition of goodwill and non-compete rights the present case, the acquisition of goodwill and non the present case, the acquisition of goodwill and non and the corresponding allotment of equity shares stand duly and the corresponding allotment of equity shares stand duly and the corresponding allotment of equity shares stand duly recorded in the books of account and are reflected in the audited recorded in the books of account and are reflected in the audited recorded in the books of account and are reflected in the audited financial statements. Consequently, the primary requirement for financial statements. Consequently, the primary requirement for financial statements. Consequently, the primary requirement for invocation of section 69 being absent, the impugned addition is invocation of section 69 being absent, the impugned invocation of section 69 being absent, the impugned liable to fail at the threshold. liable to fail at the threshold.

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4.4 Elaborating further, the learned counsel submitted that once Elaborating further, the learned counsel submitted that once Elaborating further, the learned counsel submitted that once an investment is duly recorded in the books of account, the an investment is duly recorded in the books of account, the an investment is duly recorded in the books of account, the question of treating the same as unexplained investment under question of treating the same as unexplained investment under question of treating the same as unexplained investment under section 69 does not ar section 69 does not arise. The source and nature of such ise. The source and nature of such transaction are inherently reflected through the corresponding transaction are inherently reflected through the corresponding transaction are inherently reflected through the corresponding entries in the books and financial statements. It was therefore entries in the books and financial statements. It was therefore entries in the books and financial statements. It was therefore argued that the Assessing Officer completely misconstrued the argued that the Assessing Officer completely misconstrued the argued that the Assessing Officer completely misconstrued the scope and ambit of section 69 wh scope and ambit of section 69 while framing the assessment. ile framing the assessment.

4.5 The learned counsel also invited our attention to the inherent The learned counsel also invited our attention to the inherent The learned counsel also invited our attention to the inherent contradiction in the findings recorded by the Assessing Officer. On contradiction in the findings recorded by the Assessing Officer. On contradiction in the findings recorded by the Assessing Officer. On the one hand, the Assessing Officer observed that “no actual the one hand, the Assessing Officer observed that “no actual the one hand, the Assessing Officer observed that “no actual transaction has ever happened” transaction has ever happened” with M/s Namah Educational with M/s Namah Educational Institute Pvt. Ltd.; on the other hand, he proceeded to make an Institute Pvt. Ltd.; on the other hand, he proceeded to make an Institute Pvt. Ltd.; on the other hand, he proceeded to make an addition on account of alleged unexplained investment arising from addition on account of alleged unexplained investment arising from addition on account of alleged unexplained investment arising from that very transaction. It was submitted that if the transaction itself that very transaction. It was submitted that if the transaction itself that very transaction. It was submitted that if the transaction itself is presumed not to have occ is presumed not to have occurred, there could be no occasion to urred, there could be no occasion to invoke section 69 and treat the same as an unexplained invoke section 69 and treat the same as an unexplained invoke section 69 and treat the same as an unexplained investment. The impugned addition, according to the learned investment. The impugned addition, according to the learned investment. The impugned addition, according to the learned counsel, is therefore self counsel, is therefore self-contradictory and unsustainable. contradictory and unsustainable.

4.6 The learned counsel further assailed th The learned counsel further assailed the findings of the e findings of the learned CIT(A) insofar as he sought to justify the addition by learned CIT(A) insofar as he sought to justify the addition by learned CIT(A) insofar as he sought to justify the addition by observing that the reference to section 69 by the Assessing Officer observing that the reference to section 69 by the Assessing Officer observing that the reference to section 69 by the Assessing Officer could be treated as a mere misquotation and that the addition could be treated as a mere misquotation and that the addition could be treated as a mere misquotation and that the addition

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could alternatively be sustained under sectio could alternatively be sustained under section 68 by invoking n 68 by invoking section 292B of the Act. It was submitted that sections 68 and 69 section 292B of the Act. It was submitted that sections 68 and 69 section 292B of the Act. It was submitted that sections 68 and 69 operate in distinct and mutually exclusive fields. Section 68 operate in distinct and mutually exclusive fields. Section 68 operate in distinct and mutually exclusive fields. Section 68 concerns unexplained credits found in the books of account, concerns unexplained credits found in the books of account, concerns unexplained credits found in the books of account, whereas section 69 deals with investments not recorded in the whereas section 69 deals with investments not recor whereas section 69 deals with investments not recor books. The essential conditions governing the applicability of the books. The essential conditions governing the applicability of the books. The essential conditions governing the applicability of the two provisions are fundamentally different and one provision cannot two provisions are fundamentally different and one provision cannot two provisions are fundamentally different and one provision cannot be substituted for the other by resorting to section 292B. be substituted for the other by resorting to section 292B. be substituted for the other by resorting to section 292B.

4.7 According to the learned counsel, even assuming for the sake According to the learned counsel, even assuming for the sake According to the learned counsel, even assuming for the sake of argument that the transaction required examination under of argument that the transaction required examination under of argument that the transaction required examination under section 68, no addition could be sustained thereunder in the facts section 68, no addition could be sustained thereunder in the facts section 68, no addition could be sustained thereunder in the facts of the present case. The transaction in question pertains to of the present case. The transaction in question pertains to of the present case. The transaction in question pertains to acquisition of intangible assets against issuance of equity shares tion of intangible assets against issuance of equity shares tion of intangible assets against issuance of equity shares and does not involve any unexplained cash credit received by the and does not involve any unexplained cash credit received by the and does not involve any unexplained cash credit received by the assessee. Therefore, the attempt of the learned CIT(A) to sustain the assessee. Therefore, the attempt of the learned CIT(A) to sustain the assessee. Therefore, the attempt of the learned CIT(A) to sustain the addition under section 68 is legally misconceived and contrary to addition under section 68 is legally misconceived and contrar addition under section 68 is legally misconceived and contrar the scheme of the Act. the scheme of the Act.

4.8 In support of the aforesaid propositions, the learned counsel In support of the aforesaid propositions, the learned counsel In support of the aforesaid propositions, the learned counsel placed reliance upon the judgment of the Hon’ble Bombay High placed reliance upon the judgment of the Hon’ble Bombay High placed reliance upon the judgment of the Hon’ble Bombay High Court in CIT v. Devesh Agarwal CIT v. Devesh Agarwal reported in 81 taxmann.com 257 81 taxmann.com 257 (Bom.), wherein it has been held that , wherein it has been held that section 69 cannot be invoked section 69 cannot be invoked unless it is first established that the investment in question was not unless it is first established that the investment in question was not unless it is first established that the investment in question was not recorded in the books of account. Reliance was also placed upon recorded in the books of account. Reliance was also placed upon recorded in the books of account. Reliance was also placed upon

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the decisions of the Coordinate Bench in the decisions of the Coordinate Bench in Rupee Finance & Rupee Finance & Management Pvt. Ltd. v. ACIT reported in 120 ITD 539 (Mum.) 120 ITD 539 (Mum.) and Management Pvt. Ltd. v. ACIT Sureshchandra Seksaria HUF v. ITO Sureshchandra Seksaria HUF v. ITO in ITA No. 531/Mum/2024 ITA No. 531/Mum/2024, wherein it has consistently been held that where the investment is wherein it has consistently been held that where the investment is wherein it has consistently been held that where the investment is duly recorded in the books of account, recourse to section 69 is duly recorded in the books of account, recourse to section 69 is duly recorded in the books of account, recourse to section 69 is impermissible.

4.9 On the strength On the strength of the aforesaid submissions, the learned of the aforesaid submissions, the learned counsel urged that the addition of ₹2,90,36,755/ counsel urged that the addition of 2,90,36,755/- made under section 69 and sustained by the learned CIT(A) deserves to be section 69 and sustained by the learned CIT(A) deserves to be section 69 and sustained by the learned CIT(A) deserves to be deleted in its entirety. deleted in its entirety.

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₹2,90,36,755/-, which was discharged through issuance of equity , which was discharged through issuance of equity , which was discharged through issuance of equity shares. The transaction was duly reflected in the books of account shares. The transaction was duly reflected in the bo shares. The transaction was duly reflected in the bo and the audited financial statements of the assessee. The Assessing and the audited financial statements of the assessee. The Assessing and the audited financial statements of the assessee. The Assessing Officer, however, proceeded to treat the said amount as unexplained Officer, however, proceeded to treat the said amount as unexplained Officer, however, proceeded to treat the said amount as unexplained investment under section 69 solely on the ground that M/s Namah investment under section 69 solely on the ground that M/s Namah investment under section 69 solely on the ground that M/s Namah Educational Institute Pvt. Ltd. did not f Educational Institute Pvt. Ltd. did not furnish a response to the urnish a response to the notice issued under section 133(6) of the Act. On appeal, the notice issued under section 133(6) of the Act. On appeal, the notice issued under section 133(6) of the Act. On appeal, the learned CIT(A), while affirming the addition, further observed that learned CIT(A), while affirming the addition, further observed that learned CIT(A), while affirming the addition, further observed that even if section 69 had been incorrectly invoked by the Assessing even if section 69 had been incorrectly invoked by the Assessing even if section 69 had been incorrectly invoked by the Assessing Officer, the addition could neverthe Officer, the addition could nevertheless be sustained under section less be sustained under section 68 of the Act by taking recourse to section 292B. 68 of the Act by taking recourse to section 292B. 6.2 The principal issue, therefore, is whether an investment The principal issue, therefore, is whether an investment The principal issue, therefore, is whether an investment admittedly recorded in the books of account of the assessee can be admittedly recorded in the books of account of the assessee can be admittedly recorded in the books of account of the assessee can be subjected to addition under section 69 of the subjected to addition under section 69 of the Act and, alternatively, Act and, alternatively, whether such addition can be sustained under section 68 of the whether such addition can be sustained under section 68 of the whether such addition can be sustained under section 68 of the Act. 6.3 At this stage, it would be apposite to advert to the statutory At this stage, it would be apposite to advert to the statutory At this stage, it would be apposite to advert to the statutory framework of section 69. The provision can be invoked only where framework of section 69. The provision can be invoked only where framework of section 69. The provision can be invoked only where the assessee has made investments which are not recorded in the not recorded in the the assessee has made investme books of account, if any, maintained by it. Thus, the non , if any, maintained by it. Thus, the non-recording , if any, maintained by it. Thus, the non of an investment in the books constitutes the foundational of an investment in the books constitutes the foundational of an investment in the books constitutes the foundational jurisdictional fact for attracting section 69. Unless this primary jurisdictional fact for attracting section 69. Unless this primary jurisdictional fact for attracting section 69. Unless this primary

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condition stands satisfied, condition stands satisfied, the question of calling upon the assessee the question of calling upon the assessee to explain the nature and source of such investment does not arise. to explain the nature and source of such investment does not arise. to explain the nature and source of such investment does not arise.

6.4 The aforesaid legal position stands authoritatively settled by The aforesaid legal position stands authoritatively settled by The aforesaid legal position stands authoritatively settled by the Hon’ble Bombay High Court in the Hon’ble Bombay High Court in CIT v. Devesh Agarwal CIT v. Devesh Agarwal (supra) wherein it was held that, unless it is first established that the wherein it was held that, unless it is first established that the wherein it was held that, unless it is first established that the investment is not recorded in the books of account, invocation of investment is not recorded in the books of account, invocation of investment is not recorded in the books of account, invocation of section 69 is wholly unjustified. The Hon’ble High Court observed section 69 is wholly unjustified. The Hon’ble High Court observed section 69 is wholly unjustified. The Hon’ble High Court observed that, in the absence of corroborative evidence establishing that, in the absence of corroborative evidence es that, in the absence of corroborative evidence es investments outside the regular books, the Revenue cannot proceed investments outside the regular books, the Revenue cannot proceed investments outside the regular books, the Revenue cannot proceed merely on suspicion to invoke the deeming provisions contained in merely on suspicion to invoke the deeming provisions contained in merely on suspicion to invoke the deeming provisions contained in section 69. The relevant part of decision of Hon’ble High Court is section 69. The relevant part of decision of Hon’ble High Court is section 69. The relevant part of decision of Hon’ble High Court is reproduced as under: reproduced as under:

“6. Being aggrieved the R Being aggrieved the Revenue filed two appeals to the Tribunal. By the evenue filed two appeals to the Tribunal. By the impugned order dated 10th April, 2014 the Revenue's appeal for both the impugned order dated 10th April, 2014 the Revenue's appeal for both the impugned order dated 10th April, 2014 the Revenue's appeal for both the Assessment Years was dismissed. The im Assessment Years was dismissed. The impugned order upheld the order dated ugned order upheld the order dated 25th March, 2011 of the CIT (A). We note that the CIT (A) had, while reversing the 25th March, 2011 of the CIT (A). We note that the CIT (A) had 25th March, 2011 of the CIT (A). We note that the CIT (A) had view of the Assessing Officer had inter alia, placed reliance upon the decision of view of the Assessing Officer had inter alia, placed reliance upon the decision of view of the Assessing Officer had inter alia, placed reliance upon the decision of the Tribunal in Rupee Finance & Management (P.) Ltd. v. Asstt. CIT [2008] 120 the Tribunal in Rupee Finance & Management (P.) Ltd. v. Asstt. CIT [2008] 120 the Tribunal in Rupee Finance & Management (P.) Ltd. v. Asstt. CIT [2008] 120 ITD 539 (Mum.). Mr. Mohanty the learned counsel for Revenue very fairly points ITD 539 (Mum.). Mr. Mohanty the learned counsel for Revenue very fairly p ITD 539 (Mum.). Mr. Mohanty the learned counsel for Revenue very fairly p out that the Revenue had filed an appeal against the order of the Tribunal in out that the Revenue had filed an appeal against the order of the Tribunal in out that the Revenue had filed an appeal against the order of the Tribunal in Rupee Finance and Management (P.) Ltd. (supra) to this Court being Income Tax Rupee Finance and Management (P.) Ltd. (supra) to this Court being Income Tax Rupee Finance and Management (P.) Ltd. (supra) to this Court being Income Tax Appeal No. 1208 of 2008. (CIT v. Rupee Finance & Management (P.) Ltd.). This Appeal No. 1208 of 2008. (CIT v. Rupee Finance & Management (P.) Ltd.). This Appeal No. 1208 of 2008. (CIT v. Rupee Finance & Management (P.) Ltd.). This Court by an order dated 20th October, 2008 had dismissed the Revenue's above dated 20th October, 2008 had dismissed the Revenue's above dated 20th October, 2008 had dismissed the Revenue's above appeal, inter alia, on the issue of addition on account of undisclosed investments appeal, inter alia, on the issue of addition on account of undisclosed investments appeal, inter alia, on the issue of addition on account of undisclosed investments under Section 69 of the Act for purchase of shares at a price lesser than its under Section 69 of the Act for purchase of shares at a price lesser than its under Section 69 of the Act for purchase of shares at a price lesser than its market value. No distinguishing fea market value. No distinguishing features in the present case has been shown to tures in the present case has been shown to us which would warrant taking a different view. Moreover, in the absence of any us which would warrant taking a different view. Moreover, in the absence of any us which would warrant taking a different view. Moreover, in the absence of any corroborative evidence establishing receipts and payments outside the regular corroborative evidence establishing receipts and payments outside the regular corroborative evidence establishing receipts and payments outside the regular books of Account, it cannot be alleged that investment books of Account, it cannot be alleged that investments have been made which s have been made which are not recorded. Further the Revenue has in this case proceeded to hold that are not recorded. Further the Revenue has in this case proceeded to hold that are not recorded. Further the Revenue has in this case proceeded to hold that there is investment in shares in excess of what is shown on the basis of pure there is investment in shares in excess of what is shown on the basis of pure there is investment in shares in excess of what is shown on the basis of pure suspicion i.e. the shares purchased at a price less than its actual valuation. suspicion i.e. the shares purchased at a price less than its actual valuation suspicion i.e. the shares purchased at a price less than its actual valuation Therefore unless it is first established beyond doubt that there is an investment Therefore unless it is first established beyond doubt that there is an investment Therefore unless it is first established beyond doubt that there is an investment

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which is not recorded by the Assessee in its books, no occasion to explain about which is not recorded by the Assessee in its books, no occasion to explain about which is not recorded by the Assessee in its books, no occasion to explain about the nature and source of the investment can arise. The invocation of Section 69 of the nature and source of the investment can arise. The invocation of Section 69 of the nature and source of the investment can arise. The invocation of Section 69 of the Act before establishing investment not recorded in its books of Account, is not before establishing investment not recorded in its books of Account, is not before establishing investment not recorded in its books of Account, is not justified.” 6.5 A similar view has been expressed by the Coordinate Bench in A similar view has been expressed by the Coordinate Bench in A similar view has been expressed by the Coordinate Bench in Rupee Finance & Management Pvt. Ltd. v. ACIT Rupee Finance & Management Pvt. Ltd. v. ACIT (supra) (supra), wherein it is held that section 69 has no applica held that section 69 has no application where the investments are tion where the investments are duly recorded in the books of account and there is neither any duly recorded in the books of account and there is neither any duly recorded in the books of account and there is neither any allegation nor any evidence of payment over and above the amount allegation nor any evidence of payment over and above the amount allegation nor any evidence of payment over and above the amount recorded therein. The relevant finding of the The relevant finding of the Tribunal Tribunal is reproduced as under:

“8.2 We take up third and fourth issues first. Section 69 reads as follows: third and fourth issues first. Section 69 reads as follows: third and fourth issues first. Section 69 reads as follows: "69. Where in the financial year immediately preceding the assessment "69. Where in the financial year immediately preceding the assessment "69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the year the assessee has made investments which are not recorded in the year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any sourc books of account, if any, maintained by him for any sourc 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 the assessee offers no explanation about the nature and source of the 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 investments or the explanation offered by him is not, in the opinion 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 Assessing Officer, satisfactory, the value of the investments may be Assessing Officer, satisfactory, the value of the investments may be deemed to be the income deemed to be the income of the assessee of such financial year." of the assessee of such financial year." The undisputed facts in this case are that the assessee company has purchased The undisputed facts in this case are that the assessee company has purchased The undisputed facts in this case are that the assessee company has purchased certain shares at a price which is below the market value. There is no dispute of certain shares at a price which is below the market value. There is no dispute of certain shares at a price which is below the market value. There is no dispute of the fact that the price paid for the shares by the asse the fact that the price paid for the shares by the assessee company were the cost ssee company were the cost incurred by the purchaser. It is also not disputed that all these investments were incurred by the purchaser. It is also not disputed that all these investments were incurred by the purchaser. It is also not disputed that all these investments were recorded in the books of account. Under section 69 only such value of the recorded in the books of account. Under section 69 only such value of the recorded in the books of account. Under section 69 only such value of the investments may be deemed to be the income of the assessee for the financial investments may be deemed to be the income of the assessee for the finan investments may be deemed to be the income of the assessee for the finan year, if they are not recorded in the books of account. Thus section 69 is not year, if they are not recorded in the books of account. Thus section 69 is not year, if they are not recorded in the books of account. Thus section 69 is not applicable in this case. The first appellate authority possibly realising this applicable in this case. The first appellate authority possibly realising this applicable in this case. The first appellate authority possibly realising this difficulty has chosen to invoke section 28(iv) and not to give a decisive finding as difficulty has chosen to invoke section 28(iv) and not to give a decisive finding as difficulty has chosen to invoke section 28(iv) and not to give a decisive finding as to whether Section 69 is applicable or not. We have to mention here that it is not ection 69 is applicable or not. We have to mention here that it is not ection 69 is applicable or not. We have to mention here that it is not the case of the revenue that the assessee company has paid certain amount in the case of the revenue that the assessee company has paid certain amount in the case of the revenue that the assessee company has paid certain amount in excess of what is recorded in the books of account for the purchase of the shares. excess of what is recorded in the books of account for the purchase of the shares. excess of what is recorded in the books of account for the purchase of the shares. There is not even an There is not even an allegation much less any evidence that the apparent allegation much less any evidence that the apparent consideration is not the real consideration. The only grouse of the revenue consideration is not the real consideration. The only grouse of the revenue consideration is not the real consideration. The only grouse of the revenue authorities have is that the assessee company has purchased the shares at a authorities have is that the assessee company has purchased the shares at a authorities have is that the assessee company has purchased the shares at a price which much lesser than the market price. This, price which much lesser than the market price. This, as already stated is not a as already stated is not a

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disputed fact. Thus on these facts we hold that no addition is sustainable under disputed fact. Thus on these facts we hold that no addition is sustainable under disputed fact. Thus on these facts we hold that no addition is sustainable under section 69. ordinate Bench in the case of Sureshchandra Sureshchandra 6.6 The Co-ordinate Bench in the case of Seksaria HUF (supra) Seksaria HUF (supra) also reiterated that where the investment reiterated that where the investment and its source are duly reflected in the books and financial and its source are duly reflected in the books and financial and its source are duly reflected in the books and financial statements, recourse to section 69 is impermissible. The relevant statements, recourse to section 69 is impermissible. statements, recourse to section 69 is impermissible. finding of the Co-ordinate Bench of the Tribunal ordinate Bench of the Tribunal is is reproduced as under:

“10. The facts of the present case are similar to the facts of the case relied upon the present case are similar to the facts of the case relied upon the present case are similar to the facts of the case relied upon by the assessee. The investment in diamonds is through banking channel, which by the assessee. The investment in diamonds is through banking channel, which by the assessee. The investment in diamonds is through banking channel, which is duly supported by the bank statement given by the assessee in the paper book is duly supported by the bank statement given by the assessee in the paper book is duly supported by the bank statement given by the assessee in the paper book at Page No. 13. It is also refle at Page No. 13. It is also reflected in the balance sheet filed with the return of cted in the balance sheet filed with the return of income and wealth- -tax records. Thus, once the investment has been shown in tax records. Thus, once the investment has been shown in books and the source of the investment are also from the books, then no addition books and the source of the investment are also from the books, then no addition books and the source of the investment are also from the books, then no addition u/s.69 can be made. In view of the above facts an u/s.69 can be made. In view of the above facts and for the reasons given by the d for the reasons given by the ITAT in the case of the Karta of the assessee HUF cited (supra), we set aside the ITAT in the case of the Karta of the assessee HUF cited (supra), we set aside the ITAT in the case of the Karta of the assessee HUF cited (supra), we set aside the order of Ld. CIT(A) on the subject of the issue and direct the AO to delete the order of Ld. CIT(A) on the subject of the issue and direct the AO to delete the order of Ld. CIT(A) on the subject of the issue and direct the AO to delete the 'addition. Applying the aforesaid principles to the facts of the present Applying the aforesaid principles to the facts of the present Applying the aforesaid principles to the facts of the present 6.7 case, we find that the very edifice of the addition is legally case, we find that the very edifice of the addition is legally case, we find that the very edifice of the addition is legally unsustainable. The acquisition of goodwill and non-compete rights unsustainable. The acquisition of goodwill and non unsustainable. The acquisition of goodwill and non is admittedly reflected in the books of account of the assessee and is admittedly reflected in the books of account of the assessee a is admittedly reflected in the books of account of the assessee a forms part of its audited financial statements. Once this position is forms part of its audited financial statements. Once this position is forms part of its audited financial statements. Once this position is accepted, the sine qua non for invoking section 69 ceases to exist. accepted, the sine qua non for invoking section 69 ceases to exist. accepted, the sine qua non for invoking section 69 ceases to exist. The Assessing Officer has nowhere recorded a finding that the The Assessing Officer has nowhere recorded a finding that the The Assessing Officer has nowhere recorded a finding that the investment was outside the books or that any consideration had investment was outside the books or that any consider investment was outside the books or that any consider passed beyond what was disclosed in the accounts. The addition passed beyond what was disclosed in the accounts. The addition passed beyond what was disclosed in the accounts. The addition has been made merely because one of the parties failed to respond has been made merely because one of the parties failed to respond has been made merely because one of the parties failed to respond to a notice issued under section 133(6). Such non to a notice issued under section 133(6). Such non- -compliance, by

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itself, cannot convert a duly recorded transaction into an itself, cannot convert a duly recorded transaction i itself, cannot convert a duly recorded transaction i unexplained investment within the meaning of section 69. unexplained investment within the meaning of section 69. unexplained investment within the meaning of section 69. 6.8 We also find considerable force in the contention of the assessee We also find considerable force in the contention of the assessee We also find considerable force in the contention of the assessee that the reasoning adopted by the Assessing Officer suffers from an that the reasoning adopted by the Assessing Officer suffers from an that the reasoning adopted by the Assessing Officer suffers from an inherent contradiction. Having observed that “no actual transaction inherent contradiction. Having observed that “no actu inherent contradiction. Having observed that “no actu has ever happened” with M/s Namah Educational Institute Pvt. has ever happened” with M/s Namah Educational Institute Pvt. has ever happened” with M/s Namah Educational Institute Pvt. Ltd., the Assessing Officer simultaneously proceeded to treat the Ltd., the Assessing Officer simultaneously proceeded to treat the Ltd., the Assessing Officer simultaneously proceeded to treat the very same transaction as an unexplained investment under section very same transaction as an unexplained investment under section very same transaction as an unexplained investment under section 69. If, according to the Assessing Officer, no tr 69. If, according to the Assessing Officer, no transaction had in fact ansaction had in fact taken place, there could be no occasion to invoke section 69 and taken place, there could be no occasion to invoke section 69 and taken place, there could be no occasion to invoke section 69 and bring the amount to tax as an investment made by the assessee. bring the amount to tax as an investment made by the assessee. bring the amount to tax as an investment made by the assessee. The findings, therefore, are mutually destructive and cannot The findings, therefore, are mutually destructive and cannot The findings, therefore, are mutually destructive and cannot coexist. 6.9 Equally untenable, in our consi Equally untenable, in our considered view, is the approach dered view, is the approach adopted by the learned CIT(A) in seeking to sustain the addition adopted by the learned CIT(A) in seeking to sustain the addition adopted by the learned CIT(A) in seeking to sustain the addition under section 68 of the Act by invoking section 292B. Sections 68 under section 68 of the Act by invoking section 292B. Sections 68 under section 68 of the Act by invoking section 292B. Sections 68 and 69 operate in distinct and separate fields. Section 68 deals with and 69 operate in distinct and separate fields. Section 68 deals with and 69 operate in distinct and separate fields. Section 68 deals with unexplained credits found i unexplained credits found in the books of account, whereas section n the books of account, whereas section 69 concerns investments not recorded in the books. The conditions 69 concerns investments not recorded in the books. The conditions 69 concerns investments not recorded in the books. The conditions precedent for invoking these provisions are materially different and precedent for invoking these provisions are materially different and precedent for invoking these provisions are materially different and one provision cannot be substituted for the other merely by one provision cannot be substituted for the other merely by one provision cannot be substituted for the other merely by resorting to section 292B. The said provision cures technical defects 292B. The said provision cures technical defects 292B. The said provision cures technical defects in proceedings; it does not confer jurisdiction where none otherwise in proceedings; it does not confer jurisdiction where none otherwise in proceedings; it does not confer jurisdiction where none otherwise

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exists, nor does it permit substitution of one charging provision exists, nor does it permit substitution of one charging provision exists, nor does it permit substitution of one charging provision with another having different statutory ingredients. with another having different statutory ingredients. 6.10 Even otherwise, the impugned addition does not fall within the e, the impugned addition does not fall within the e, the impugned addition does not fall within the ambit of section 68. The subject matter of dispute is the acquisition ambit of section 68. The subject matter of dispute is the acquisition ambit of section 68. The subject matter of dispute is the acquisition of intangible assets against issuance of equity shares. In the case of intangible assets against issuance of equity shares. of intangible assets against issuance of equity shares. assessee has made payment for purchase of investment and thus assessee has made payment for purchase of investment and thus assessee has made payment for purchase of investment and thus verification of creditworthiness of recipient of payment is not cation of creditworthiness of recipient of payment is not cation of creditworthiness of recipient of payment is not relevant at all. The addition has not been made in respect of any The addition has not been made in respect of any The addition has not been made in respect of any credit entry found in the books credit entry found in the books of assessee. If the Assessing Officer . If the Assessing Officer entertained any doubt regarding any credit appearing in the books entertained any doubt regarding any credit appearing in the entertained any doubt regarding any credit appearing in the of account of assessee, of assessee, it was incumbent upon him to examine such it was incumbent upon him to examine such credit independently in accordance with section 68. However, the credit independently in accordance with section 68. However, the credit independently in accordance with section 68. However, the acquisition of an asset acquisition of an asset and payment thereof cannot, by itself, be cannot, by itself, be treated as a cash credit under section 68. treated as a cash credit under section 68. 6.11 In the present case, the assessee had furnished before the he present case, the assessee had furnished before the he present case, the assessee had furnished before the authorities below the agreement for allotmen authorities below the agreement for allotment of shares, Board t of shares, Board resolutions and statutory and statutory filings made with the Ministry of filings made with the Ministry of Corporate Affairs, share certificates and other contemporaneous Corporate Affairs, share certificates and other contemporaneous Corporate Affairs, share certificates and other contemporaneous records evidencing the transaction. The Assessing Officer neither cing the transaction. The Assessing Officer neither cing the transaction. The Assessing Officer neither disproved these documents nor conducted any meaningful enquiry disproved these documents nor conducted any meaningful enquiry disproved these documents nor conducted any meaningful enquiry to establish that the transaction was fictitious or that any to establish that the transaction was fictitious or that any to establish that the transaction was fictitious or that any unaccounted consideration had changed hands. In the absence of unaccounted consideration had changed hands. In the absence of unaccounted consideration had changed hands. In the absence of

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such material, the addition rests merely upon surmise and e addition rests merely upon surmise and e addition rests merely upon surmise and conjecture, which cannot take the place of evidence. conjecture, which cannot take the place of evidence. conjecture, which cannot take the place of evidence.

6.12 In view of the foregoing discussion, and respectfully following In view of the foregoing discussion, and respectfully following In view of the foregoing discussion, and respectfully following the ratio laid down by the Hon’ble Bombay High Court in Devesh the ratio laid down by the Hon’ble Bombay High Court in the ratio laid down by the Hon’ble Bombay High Court in Agarwal (supra) as well as th (supra) as well as the decisions of the Coordinate Benches e decisions of the Coordinate Benches in Rupee Rupee Rupee Finance Finance Finance & & & Management Management Management Pvt. Pvt. Pvt. Ltd. Ltd. Ltd. (supra) and Sureshchandra Seksaria HUF Sureshchandra Seksaria HUF (supra), we hold that the impugned (supra), we hold that the impugned addition of ₹2,90,36,755/ 2,90,36,755/- is unsustainable in law. The orders of is unsustainable in law. The orders of the lower authorities are accordingly the lower authorities are accordingly set aside and the Assessing set aside and the Assessing Officer is directed to delete the addition. Officer is directed to delete the addition.

6.13 Since the addition itself has been deleted on the principal legal Since the addition itself has been deleted on the principal legal Since the addition itself has been deleted on the principal legal issue, the remaining grounds raised by the assessee become merely issue, the remaining grounds raised by the assessee become merely issue, the remaining grounds raised by the assessee become merely academic and do not call for separate adjudicat academic and do not call for separate adjudication.

Teevra Edutech Private Limited Teevra Edutech Private Limited 20 ITA No. 7224/MUM/2025

BY ORDER, BY ORDER,

//True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai