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Facts
The Revenue filed an appeal against the CIT(A)'s order for assessment year 2010-11, which allowed relief on additions made by the AO concerning unexplained receipts and investments. The CIT(A) deleted an addition of Rs. 3,00,000 for unexplained receipts, finding that the assessee proved the source as investment from the preceding year due to purchase cancellation. The CIT(A) also deleted an addition of Rs. 2,46,00,000 related to an FDR found in the name of M/s Matarani Trust.
Held
The Tribunal held that the assessee had sufficiently explained the source of Rs. 3,00,000, proving it was an investment from a prior year due to a cancelled purchase, thus rejecting the Revenue's ground on this issue. Regarding the Rs. 2,46,00,000 FDR, the Tribunal found it was invested by M/s Matarani Trust and not by the assessee, rejecting the Revenue's appeal on this ground as well.
Key Issues
Whether the CIT(A) erred in deleting additions made by the AO for unexplained receipts and investments, particularly concerning an FDR found in the name of a trust.
Sections Cited
143(3), 1961
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Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
ORDER
PER SATBEER SINGH GODARA, JUDICIAL MEMBER:
This Revenue’s appeal for assessment year 2010-11 arises against Commissioner of Income Tax (Appeals), [in short, the “CIT(A)”] Gwalior’s order dated 21.02.2017, in case No. 566/IT/2011-12/Gwl, involving proceedings under Section 143(3) of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’].
Heard both the parties at length. Case file perused.
The revenue raises the following substantive ground in the instant appeal:
1. Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and in fact in allowing a relief of Rs. 3,00,000/- which has been added by the A.O. on account of unexplained receipt, in spite of the facts on records that the assessee has failed to produce any admissible evidence during the course of assessment proceedings before the Assessing Officer.
2. Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and in fact in allowing a relief of Rs. 2,74,00,000/- which has been added by the A.O. on account of unexplained investment during the relevant financial year, in spite of the facts on records that the assessee has failed to produce any admissible evidence during the course of assessment proceeding before the AO.”
Coming to the Revenue’s above extracted former ground that the learned CIT(A) has erred in law on facts in deleting Rs.3 lacs addition made by the Assessing Officer alleging unexplained receipts, it emerges from a perusal of lower appellate discussion at page 16 onwards that the assessee had duly proved source thereof as investment in the preceding year(s) and returned back in the impugned assessment year on account of cancellation of purchase. We thus find no reason to revive the impugned addition in the instant former substantive ground which stands rejected.
Coming to the second issue between the parties regarding unexplained FDR making addition of Rs.2,46,00,000/- which was admittedly found in the name of M/s Matarani Trust than the assessee, we are of the considered view that the said sum has to be held as invested by the trust than the assessee. We accordingly reject the Revenue’s instant latter ground as well.
This Revenue’s appeal is dismissed.
Order pronounced in the open court on 12.02.2025