TaxTMI 
TaxTMI 
2026 (9) TMI 684
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....20. The assessee has raised various grounds, including legal grounds challenging the validity of reopening under sections 147/148 of the Act. However, one of the principal grounds urged before us, being Ground No. 6, challenges the addition of Rs. 80,00,000 made under section 69 of the Act on the fundamental ground that the alleged investment itself was made during Financial Year 2017-18, relevant to Assessment Year 2018-19, and therefore could not, by any process of reasoning, be brought to tax under section 69 in Assessment Year 2019-20. 2. The material facts relevant for adjudication of this ground are that the assessee had acquired an immovable property for an agreed consideration of Rs. 1,55,00,000, as against the stamp duty valuati....
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....e., during Financial Year 2017-18. The assessee explained that the corresponding amount had been received from M/s Sai Leela Corporation through her IDBI Bank account on account of refund of the amounts earlier paid to the said builder. The Assessing Officer, however, was not satisfied with the explanation, principally for the reason that the assessee could not furnish the cancellation agreement with M/s Sai Leela Corporation and, according to him, had also not satisfactorily established the original source of the amount earlier invested with the said builder. He accordingly treated Rs. 80,00,000 as unexplained investment under section 69 of the Act in Assessment Year 2019-20. 4. Before the learned CIT(A), the assessee specifically chall....
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....ayments appearing at page 98 of the paper book, which clearly records that the payments aggregating to Rs. 80,00,000 had been made in November 2017. Thus, whatever may be the controversy regarding the source of such payments, the fact remains that the investment represented by these payments stood made during Financial Year 2017-18. It was submitted that section 69 does not make the registration of an instrument or acquisition of legal title the taxable event; rather, it expressly refers to the financial year in which the assessee "has made investments". Therefore, an investment actually made in Financial Year 2017-18 cannot be shifted to Financial Year 2018-19 merely because the sale deed or conveyance came to be registered subsequently. ....
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....yments indisputably fall in Financial Year 2017-18, relevant to Assessment Year 2018-19. In fact, this factual position has not been disputed even by the learned CIT(A); rather, his order specifically proceeds on the premise that the payments towards acquisition of the property were made during Financial Year 2017-18. Once this foundational fact stands accepted, the conclusion that the same investment can nevertheless be assessed under section 69 in Assessment Year 2019-20 merely because the registered deed was executed during Financial Year 2018-19 is difficult to sustain. 8. The learned CIT(A), in our view, has conflated two conceptually distinct events, namely, making of the investment and acquisition or perfection of legal title in t....
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....on from the very investment which forms its foundation. 10. We may also clarify that the question before us is not whether the assessee had satisfactorily explained the original source of the amount paid to M/s Sai Leela Corporation or whether the documentary evidence regarding cancellation/refund was sufficient. Those questions would become relevant only in the assessment year in which an addition under section 69 could lawfully be considered in respect of the investment in question. For the present appeal, it is sufficient that the impugned investment of Rs. 80,00,000 was made during Financial Year 2017-18 and not Financial Year 2018-19. Therefore, even assuming, without accepting, the Assessing Officer's objection regarding the suffic....