BIOGRAPHY INVESTMENTS PVT. LTD.,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(2),, AHMEDABAD

The appellant has taken following grounds of appeal :-

Facts of the case are that the appellant’s case was reopened on the information of the ACIT, Circle Gandhinagar for an unaccounted investment of Rs.50 lakhs in the share of company Infocity Club and Resorts Pvt. Ltd. However, on verification of audited account for assessment year 2004-05, the assessee company has not shown the said investment of R.50 lakhs in the balance sheet. Therefore, assessee was issued a show cause notice to this effect. The assessee replied but the same was not satisfactory to the Assessing Officer and copies of statement received from the ACIT Gandhinagar was sought by the assessee from the Assessing Officer but the same was not given to the assessee and addition of Rs.50 lakhs was made under section 69 of the Income Tax Act, 1961. Thereafter, assessee preferred first statutory appeal before the ld. CIT(A). Before the ld. CIT(A) assessee filed additional evidence under Rule 46A of the Income Tax Rules and in the remand report copy of the statement was supplied by the Assessing Officer to the learned CIT(A) and thereafter the CIT(A) supplied the copy of the reason for reopening to the assessee. Before the ld. CIT(A) in support of its contention assessee submitted details of the cheque payment for purchasing of shares worth Rs.50 lakhs and in order to purchase shares the assessee

We have gone through the relevant records and the impugned order. As we can see with regard to ground no.1 & 2, the Assessing Officer reopened the assessment which was done under section 143(1) of the Act on the basis of the information received from the ACIT, Gandhinagar for unaccounted dealing of shares worth Rs.50 lakhs. Therefore, in our considered opinion, the Assessing Officer was right in reopening the case. So far as the reopening is concerned, during the appellate proceedings, the learned CIT(A) supplied copy of the same to the assessee thus the same becomes infructuous. So far as the investment of Rs.50 lakhs is concerned in support of its contention the assessee has given source of the loan of Rs.50 lakhs including copies of bank statement, confirmation of the parties from whom the said fund was received including PAN, copy of the return of such parties as placed on page nos.31 to 37 of the Paper Book which has duly explained the source of impugned investment and same cannot be considered as unexplained. The assessee has also submitted copies of the share details purchased by it and thereafter assessee had also given all details pertaining to transfer of shares of Rs.50 lakhs to M/s. R. Natwrlal & Co. and filed all the relevant details such as bank statement copy of PAN, share transfer certificate and the same was done within financial year 2004-05 and we accept the contention of the assessee that shares were purchased and sold during the Financial Year 2004-05. Therefore, the same could not be shown in the balance sheet of the company. Thus, we find merit in the ground raised by the appellant and delete the addition of Rs.50 lakhs made by the Assessing Officer under section 69 and confirmed by the ld. CIT(A) on account of alleged unexplained investment in share of Infocity Club and Resorts Pvt. Ltd.