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

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ITA 200/NAG/2024Status: DisposedITAT Nagpur24 June 2025AY 2014-20154 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹9,28,735/- as undisclosed investment in shares was unsustainable because it was made without disclosing substantive material and was based on information from Wasankar Wealth Management, which had defrauded the public, a fact supported by the assessee's police report. The Tribunal found that without prima-facie establishing a case against the assessee, liability could not be fastened. Regarding the addition of ₹2,48,000/- under Section 69A, the Tribunal considered the assessee's pension income of ₹1,10,988/- and found the investment of ₹2,48,000/- to be probable and plausible, thus unsustainable. For the addition of ₹46,613/- as interest income, the Tribunal noted that the assessee's income was below the taxable limit, and the interest amount was not shown in the return, making this addition unsustainable as well. Consequently, the appeals were allowed.

What were the facts?

The assessee, Prakash Ingole, filed appeals against orders dated 29/01/2024 passed by the Commissioner of Income Tax (Appeals)/NFAC, Delhi, under Section 250 of the Income Tax Act, 1961, for Assessment Years 2013-14 and 2014-15. The Assessing Officer (AO) reopened the assessment for AY 2013-14 based on an alleged investment of ₹1,65,000/- in Wasankar Wealth Management, Nagpur, for which the source was unexplained. The AO made additions totaling ₹2,48,000/- under Section 69A for unaccounted money, ₹46,613/- for interest income, and ₹9,28,735/- as undisclosed investment in shares. The assessee contended that Wasankar Wealth Management had defrauded the public, and a police report was filed. The assessee also stated that the additions were not in sync with the reasons for reopening. The assessee was drawing a pension of ₹1,10,988/-.

What were the issues?

1. Whether the addition of ₹9,28,735/- as undisclosed investment in shares is sustainable, given that it was made solely on information without substantive material and the company involved had defrauded the public, as argued by the assessee. The revenue's arguments are not recorded. 2. Whether the addition of ₹2,48,000/- under Section 69A for unaccounted money is sustainable, considering the assessee's pension income of ₹1,10,988/-, as argued by the assessee. The revenue's arguments are not recorded. 3. Whether the addition of ₹46,613/- on account of interest income is sustainable, especially when the assessee's income was below the taxable limit and the interest amount was not shown in the return, as argued by the assessee. The revenue's arguments are not recorded.

Which sections of the Income-tax Act were involved?

Section 69A,Section 250

AI-generated summary — verify with the full judgment below

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.

2.

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.

3.

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.

4.

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.

5.

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.

7.

In the result, the appeals of the Assessee in & 200/NAG/2024 are allowed.

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