Shankar Mallayya Vasal vs. Income Tax Officer

Parties Involved

Facts Summary

The Assessing Officer, based on the Risk Management Strategy, observed that the Assessee had invested Rs.50,00,000/- in applications for allotment in bonds, public debentures and IPOs of various companies, received Rs.47,700/- from shares during the year, and did not file return of income, hence, the assessment has been reopened under section 147 of the Act by issuing notice under section 148 of the Act dated 15.03.2023. The Assessee failed to comply with the notice by furnishing a return of income and did not comply with the notices under section 142(1) of the Act dated 27th October, 2023 and 16th November, 2023 and final show-cause notice dated 5th January, 2024. Therefore, the Assessing Officer made an addition of Rs.50,00,000/- under section 69 of the Act on account of unexplained investment made in IPO/ Funds, Rs.47,740/- on account of short-term capital gain on sale of securities. The assessment order has been passed under section 144 read with section 147 of the Act.…

Legal Issues

• 1. The Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [CIT(A)] erred in confirming the action of AO in issuing the notice u/s 148 of the Income Tax Act, 1961 (Act) and passing the order u/s 147 r.w.s 144B of the Act.
• 2. The Hon'ble CIT(A) erred in confirming the action of AO in making the addition of Rs.50,00,000/- being alleged unexplained investment u/s 69 of which nature and source is not explained by the Appellant.
• 3. The Hon'ble CIT(A) erred in confirming the action of AO in making addition of Rs.47,700/- being amount received on sale of securities and treating the same as Short Term Capital Gain earned by the Appellant.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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