A.C.I.T., CIRCLE-3, SRINAGAR vs. M/S. SHAW & BROTHERS, SRINAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER

ITA No.389/ASR/2017 Assessment Year : 2011-12 The ACIT, Vs. M/s Shaw & Brothers, Circle-3, The Bund Srinagar Srinagar. PAN: AAOFS8284N (Appellants) (Respondents)

Assessee By : Shri Malik Manzoor Ahmad, Advocate Department By : Shri S.S. Negi

Date of Hearing : 19.02.2018 Date of Pronouncement : 20.02.2018

ORDER PER R.S. SYAL, VP: This appeal filed by the Revenue is directed against the order passed by the CIT(A) on 31.03.2017 in relation to the Assessment Year 2011-12.

ITA No.389/ASR/2017

addition in respect of unexplained investment in mutual funds and

shares.

Officer received AIR information indicating that the assessee made

investments in mutual funds and shares amounting to

Rs.529,03,977/-. On being called upon to explain the source of the

investments, the assessee submitted that such investments were

made from the regular books of account. Considering the fact that

the balance of investments in mutual funds and shares, etc., at the

end of the year stood at Rs.3,48,33,926/-, the Assessing Officer

made an addition for the differential amount of Rs.180,70,051/-

(Rs.5.29 crore minus Rs.3.48 crore). The Ld. CIT(A) deleted the

addition, against which the Revenue has come up in appeal before

the Tribunal.

record. It is observed that the Assessing Officer got AIR information

ITA No.389/ASR/2017

about the assessee having made investment in mutual funds and shares

during the year amounting to Rs.5.29 crore. As against such

investments, he considered only the closing balance in the assessee’s

balance sheet for making an addition of Rs.1.80 crore. It can be seen

from the Amexco IBC Investment account in the assessee’s books of

account that as against the opening balance of Rs.1.93 crore, the

assessee made fresh investments to the tune of Rs.5.06 crore in, bringing

the balance up to Rs.6.99 crore. A copy of such account has been placed

at pages 17 to 20 of the Paper book. Apart from this, the assessee also

made fresh investments amounting to Rs.10 lac in India REIB Fund

Scheme IB amounting to Rs.10 lac and Rs.40 lac in Fortis Fixed Term

Fund Series 18B D, whose copies have been placed at pages 36 and 39

of the Paper book. Thus, it is manifest that the assessee made total

investments of Rs.5.56 crore [Rs.5.06 crore plus Rs.10 lac plus Rs. 40

lac] during the year. After certain redemptions and maturities, the

closing balance of investments stood at Rs.3.48 crore. Since the

information with the Assessing Officer was about the assessee having

made investments to the tune of Rs.5.29 crore which is, in fact, lower 3

ITA No.389/ASR/2017

than the actual investment made by the assessee at Rs.5.56 crore, we are

of the considered opinion that the Assessing Officer was not justified in

considering only the closing balance of investments overlooking the

redemptions and maturities made during the year. We, therefore, uphold

the impugned order deleting the addition.

The order pronounced in the open court on 20.02.2018.

Sd/- Sd/-

[N.K. CHOUDHRY] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT

Dated, 20th February, 2018. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, AMRITSAR.