DURGAMATA COOMERCIAL PVT. LTD. ,KOLKATA vs. ITO,WD-9(1), KOLKATA. , KOLKATA

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ITA 861/KOL/2023Status: DisposedITAT Kolkata08 April 2024AY 2014-15Bench: DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the investments were indeed reflected in the balance sheet as opening balances from earlier financial years. Therefore, the addition made by the AO and sustained by the CIT(A) was incorrect.

What were the facts?

The assessee's case was selected for scrutiny, and the Assessing Officer (AO) made an addition of Rs. 2,04,50,000/- on account of unexplained investment in unlisted equity shares. The assessee contended that these investments were reflected in the balance sheet as opening balances from prior years.

What were the issues?

Whether the addition made by the AO under Section 69 for unexplained investment in equity shares was justified, and consequently, whether the penalty under Section 271(1)(c) was sustainable.

Which sections of the Income-tax Act were involved?

Section 69,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA

Before: DR. MANISH BORAD & SONJOY SARMA

order : April 8th, 2024 ORDER Per Sonjoy Sarma, Judicial Member: Both these appeals filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2014-15 are directed against separate orders passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 27.06.2023.

2.

The brief facts of the case are that the assessee filed its return of income for the AY 2014-15 by declaring total income of Rs. 1,46,870/-. Subsequently, the case of the assessee was selected for scrutiny under CASS followed by I.T.A. Nos.: 861 & 864/Kol/2023 Assessment Year: 2014-15 Durgamata Commercial Pvt. Ltd. notices issued u/s 143(2) & 142(1) of the Act. However, in response to the notices, none turned up. Therefore, the Assessing Officer (in short ld. 'AO') framed the assessment u/s 144 of the Act. During the scrutiny proceeding, on verification of the books of accounts and comparison of balance sheet for the AY 2013-14 & AY 2014-15 ld. AO noticed that the assessee had invested in unlisted equity shares to the tune of Rs. NIL and Rs. 2,04,50,000/- respectively. From the facts narrated above he transpires that the assessee company had invested an amount of Rs. 2,04,50,000/- in equity during the year under consideration. But it remains as unexplained on the part of the assessee regarding the nature and source of the investment. Accordingly, he added the income of the assessee u/s 69 of the Act by assessing the total income of the assessee at Rs. 2,05,96,870/-. Aggrieved by the order of the AO, the assessee went into appeal before the ld. CIT(A). However, assessee could not succeed there.

3.

Dissatisfied with the appellate order, assessee is now in appeal before this Tribunal raising three grounds of appeal. However, the main grievance of the assessee is regarding ld. CIT(A) confirming the addition made by the AO u/s 69 of the Act in respect of alleged undisclosed investment in the balance sheet amounting to Rs. 2,04,50,000/- in the hands of the assessee.

4.

At the time of hearing, the contention of the ld. A/R is that the alleged investments were duly reflected in the balance sheet of the assessee as clearly stated in details of investment in unquoted equity shares forming part of Note no. 4 of the balance sheet which is reproduced as under:

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