ITO WD-2(1), KOL, KOLKATA vs. DEVINE DISTRIBUTORS (P) LTD, DELHI

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ITA 2018/KOL/2024Status: DisposedITAT Kolkata20 March 2025AY 2012-13Bench: us, the Ld. DR read out from relevant portions from the Ld. AO's order and stated that before the Ld. AO, the assessee did not produce the necessary details in justification of the source of investment in said property. However, it is seen that in the impugned order, it is clearly recorded in para 5.3 that to obtain funds for the impugned investment, the assessee company sold its investments in as many as 9 companies to obtain Rs.3 Crores for effecting the impugned transactions. The Ld. CIT3 pages

AI SummaryDismissed

Facts

The Revenue challenged the CIT(A)'s order deleting an addition of Rs. 2.90 Crores, which the AO had treated as unexplained investment in property. The CIT(A) had accepted the assessee's explanation that the funds were generated from the sale of investments in nine companies.

Held

The Tribunal upheld the CIT(A)'s decision, confirming that the investment in property was made from funds obtained through the sale of shares. It noted that the department did not raise specific grounds regarding fresh evidence or denial of opportunity to the AO.

Key Issues

Whether the CIT(A) was justified in deleting the addition of Rs. 2.90 Crores, which was made on account of unexplained investment in property, considering the assessee's claim that funds were sourced from the sale of shares.

Sections Cited

250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH KOLKATA

Date of concluding the hearing : 20.03.2025 Date of pronouncing the order : 20.03.2025 O R D E R PER BENCH 1. This appeal arises from the order u/s 250 of the Income Tax Act, 1961 (hereafter ‘the Act’) dated 31.07.2024, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.

1.1 In this case, the Ld. CIT(A) has deleted the addition of Rs. 2,90,00,000/- having been made as investment in property from allegedly unexplained sources. The Revenue is in appeal with the following grounds:

“1. The Ld. CIT(A) has erred in law in deleting the addition of Rs. 2,90,00,000/- without appreciating the merit of the case.

Devine Distributors (P ) Ltd. 1.2 On the last date of hearing, none appeared on behalf of the assessee. However, it was decided to proceed ahead with the adjudication with the help of Ld. DR.

Before us, the Ld. DR read out from relevant portions from the Ld. AO’s order and stated that before the Ld. AO, the assessee did not produce the necessary details in justification of the source of investment in said property. However, it is seen that in the impugned order, it is clearly recorded in para 5.3 that to obtain funds for the impugned investment, the assessee company sold its investments in as many as 9 companies to obtain Rs. 3 Crores for effecting the impugned transactions. The Ld. CIT(A) has recorded in detail these factors in paras 5.2, 5.3 and 5.4 regarding the details as would have been before the Ld. AO. It is further recorded in para 5.4 of the impugned order that the Ld. AO has mentioned about the source of funds being from investment in shares. The Ld. DR vehemently argued that it was not clear whether the details submitted before the Ld. CIT(A) were actually before the Ld. AO or not. He requested that this matter should be remanded back for examination by the Ld. AO. It is seen that the department has not take any specific ground regarding admission of fresh evidence or even denial of any opportunity to the Ld. AO. Thus, we deem it fit to uphold the finding of Ld. CIT(A) and record that the investment in property was done from fund obtained from sale of shares held by the assessee.

In the result, appeal filed by the Revenue is dismissed.