MANISH PAHWA,NEW DELHI vs. ITO WARD 45(2), NEW DELHI

Facts

The assessee's case was reopened based on information about a transaction with M/s Global IT International. During the assessment, additions were made for bogus expenditure, cash deposits, unexplained investment in property, and cost of improvement. The assessee contested these additions.

Held

The Tribunal found that the addition for unexplained investment in property needs further inquiry regarding the OD facility's fund flow. The addition for unexplained improvement expenditure was restored for reconciliation of payments. The disallowance for website services was contested by the assessee, who provided a tax invoice and proof of payment, arguing it was a genuine business transaction. The addition for unexplained cash deposit was rejected as the assessee provided explanations and evidence of cash generation from business.

Key Issues

Whether the additions made by the AO for unexplained investment in property, unexplained improvement expenditure, bogus website services, and unexplained cash deposit are sustainable.