TaxTMI 
TaxTMI 
2026 (7) TMI 418
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....explained investment under Section 69 of the Income Tax Act, 1961. 2. We have heard both the sides, perused the material on record and the impugned order. Admittedly, the proceeding were initiated under Section 148 by issuing a notice under Section 148 based on information received from National Spot Exchange Limited (NSEL) vide letter dated 25.05.2017, where assessee's name appeared in that information. The AO has passed the assessment order based on information that investment made on the NSEL Exchange amounting to Rs. 74,42,550/- and added to the return of income of the assessee as unexplained under Section 69 of the Act. 3. The Ld. CIT(A) has confirmed the addition by observing vide para no. 6.3 as under:- 6.3 I have gone....
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..... 3 and 4 are dismissed. 4. The Ld. counsel for the assessee submitted that the Ld. CIT(A) was not justified in confirming the addition of Rs. 74,42,550/- as unexplained investment under Section 69 of the Act, being bad in law and facts. The Ld. CIT(A) has not considered the facts on validity of the reassessment proceeding that no independent enquiry was made from the assessee or NSEL; that AO did examine whether the alleged income truly escaped assessment and that the AO did not call for material on the basis of NSEL flagged the assessment transaction as suspicious. 5. The Ld. counsel further contended that during the financial year 2013-14, the appellant traded on the NSEL platform in commodities, namely, sugar, cotton oil, paddy an....
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.... his investment is only limited to Rs. 7,44,255/- being 10% of the total purchase value of Rs. 74,42,550/- is not correct. The purchase of the contract aggregating to Rs. 74,42,550/- is made on behalf of the assessee by his broker Geojit Commotrade Ltd and in view of the above, the same shall be considered as investment made by the assesee. 1.9. In the present case, the Assessee has provided a detailed, cogent, and fully documented explanation demonstrating that: (i) The actual investment by the Assessee from his own funds was limited to 10% margin money of approximately Rs. 7,44,255/-; (ii) The balance 90% was financed by GCPL, an RBI-registered NBFC, under a duly executed credit facility agreement for Rs. 4,50,0....
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....indra Bank 28.03.2012 13,100/- Kotak Mahindra Bank 06.04.2013 4,82,818/- Kotak Mahindra Bank 19.06.2016 16,000/- Kotak Mahindra Bank Total 8,11,918/- 1.12. The total amount recoverable from NSEL as on that date was Rs. 72,66,467/- which is approtionable as under: Claimant Amount(Rs.) GCPL (Finance Company-90% share) 64,83,113/- Interest payable to GCPL 55,825/- Bhanwar Lal Khatik (Assessee- Own 10%) 7,27,529/- Total recoverable from NSEL 72,66,467/- 1.13. The outstanding financed amount of Rs. 64,83,113/- due as on 31.03.2014 is owed by the Appellant to GCPL (a RBI-registered NBFC) and will be repaid as and when the same is recovered from NSEL. ....
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....xplained with supporting documentation. 1.18. The Madras High Court in CIT v. N. Swamy [1998] 241 ITR 363 (Mad.) held that: 'The burden of showing that the assessee had undisclosed income is on the Revenue, and that burden cannot be discharged by merely relying on statements made by the assessee to a third party in connection with a transaction not directly related to the assessment.' The said ratio directly applies in the facts of the present case. 1.19. The ITAT Delhi in Anova Infracon Private Limited (ITA Nos. for AY 2011-12 and 2012-13) has recently held that additions under Section 69 cannot be sustained where the investment is duly recorded in the books of accounts and supported by explained banking transacti....