PRAKASH INGOLE,NAGPUR vs. ITO WARD 3(3),, NAGPUR

ITA 199/NAG/2024Status: DisposedITAT Nagpur24 June 2025AY 2013-20144 pages

AI SummaryN/A

Facts

The Assessing Officer reopened the assessment for AY 2013-14, making additions for unexplained investment in Wasankar Wealth Management (₹1,65,000), unaccounted money (₹2,48,000 under Section 69A), interest income (₹46,613), and undisclosed investment in shares (₹9,28,735). The assessee contended that Wasankar Wealth Management had defrauded the public, for which a police report was filed, and that his pension income made the ₹2,48,000 investment plausible, while his overall income was below the taxable limit, explaining the undeclared interest income.

Held

The tribunal held that the addition of ₹9,28,735/- for undisclosed investment in shares was unsustainable, as no prima-facie case was established and the AO relied on information without substantive material. Similarly, the addition of ₹2,48,000/- for unaccounted money under Section 69A was deemed unsustainable given the assessee's plausible pension income. The addition of ₹46,613/- for interest income was also found unsustainable as the assessee's overall income was below the taxable limit.

Key Issues

The key issues were the sustainability of additions made by the Assessing Officer for unexplained investment in shares, unaccounted money, and interest income, considering the assessee's financial circumstances and the circumstances of the investment in a defrauding entity.

Sections Cited

Section 250 of the Income Tax Act, 1961, Section 69A of the Income Tax Act, 1961

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR SMC” BENCH : NAGPUR

Before: SHRI NARENDER KUMAR CHOUDHRY

Hearing: 24.06.2025Pronounced: 24.06.2025

These appeals have been preferred by the same assessee against the separate orders each dated 29/01/2024 impugned herein passed by the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [in short, “Ld.Commissioner”] u/sec. 250 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year (for short, “AY”) 2013-14.

Both the appeals are having involved identical facts and issues, therefore, for the sake of convenience and brevity, the same were heard together and are being disposed of by this composite

2 ITA.No.199 & 200/NAG/2024 order by taking into consideration as a lead case.

In the instant case, the Assessing Officer has recorded the reasons for reopening to the effect that during the A.Y. 2013–14, the assessee had invested ` 1,65,000/– in Wasankar Wealth Management, Nagpur, but failed to explain the source of investment along with documentary evidence and, hence, the source of investment of ` 1,65,000/– remains unexplained. The Assessing Officer, ultimately, made the addition of ` 2,48,000/– on account of unaccounted money u/sec. 69A of the Act, addition of ` 46,613/– on account of interest income and addition of ` 9,28,735/– as undisclosed investment in shares. Admittedly, the aforesaid additions are not in sync with the reasons recorded for reopening and even otherwise it is an admitted fact that Wasankar Wealth Management, Nagpur has cheated the public at large and for that the assessee has also filed a police report before the Economic Crime Branch at Nagpur on 19/02/2015, which supports the contention of the assessee. Admittedly, the Assessing Officer has made the addition of ` 9,28,735/– just on the basis of information available, but without disclosing any substantive material. Unless and until prima–facie the case is established against the assessee, the liability upon the assessee cannot be fastened, as enshrined in the law applicable. Thus, the instant addition is unsustainable.