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Facts
The assessee's cases for AY 2013-14 and 2014-15 involved reopening where the Assessing Officer made additions for unexplained investment in Wasankar Wealth Management (₹1,65,000), unaccounted money (₹2,48,000 u/s 69A), interest income (₹46,613), and undisclosed investment in shares (₹9,28,735). The assessee had also filed a police complaint against Wasankar Wealth Management for cheating.
Held
The Tribunal held that the additions for undisclosed investment in shares (₹9,28,735) were unsustainable as there was no substantive material against the assessee. The additions for unaccounted money (₹2,48,000) and interest income (₹46,613) were also found unsustainable, considering the assessee's pension income and income being below the taxable limit, respectively. Consequently, all appeals filed by the assessee were allowed.
Key Issues
The key issue was the sustainability of additions made by the Assessing Officer for unexplained investments, unaccounted money under Section 69A, and interest income, considering the assessee's explanation and financial circumstances.
Sections Cited
Section 250, Section 69A
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Income Tax Appellate Tribunal, NAGPUR SMC” BENCH : NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
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.
Coming to the other addition of `2,48,000/– made by the Assessing Officer u/sec. 69A of the Act, this Court observe that the assessee admittedly was drawing pension of ` 1,10,988/– and, therefore, investment to the amount of ` 2,48,000/– prima–facie
3 ITA.No.199 & 200/NAG/2024 seems to be probable and plausible. Thus, no addition on this count is also unsustainable.
Coming to the addition of ` 46,613/– which has been made by the Assessing Officer, this Court observe, as the assessee’s income was below the taxable limit and, therefore, he has not shown that particular interest amount of ` 46,613/– in its return of income and therefore, this addition on this count also unsustainable. Thus, the appeal of the assessee is allowed. is also applicable mutatis mutandis to the appeal in ITA No. 200/NAG/2024.
In the result, the appeals of the Assessee in & 200/NAG/2024 are allowed.