DCIT Vs Continental Construction Limited (ITAT Delhi)
The Delhi ‘B’ Bench of the Income Tax Appellate Tribunal, Delhi Bench dismissed the Revenue’s appeal for AY 2017-18 in the case of Continental Construction Limited, affirming the deletion of addition made under section 69 on account of alleged unexplained investments.
The AO had completed the reassessment ex-parte under sections 147/144 after noticing, from Form 26AS, interest income and time deposits aggregating ₹5.55 crore, and treated the same as unexplained investments. The CIT(A), however, found on record that there was no fresh investment during the year: the deposits represented renewal/reinvestment of existing fixed deposits (earlier created as performance security for bank guarantees) and auto-sweep balances in a flexi current account—transactions merely reported as “investments” in Form 26AS. The assessee was defunct during the year and had no fresh inflows.
Rejecting the Revenue’s Rule 46A objection, the Tribunal held that the CIT(A)’s conclusion flowed from admitted facts and records (renewal of old FDs and bank auto-sweeps), not from any impermissible additional evidence. Consequently, invocation of section 69 was unsustainable. The ITAT found no infirmity in the CIT(A)’s order and dismissed the Revenue’s appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the Revenue against the order dated 04.07.2024 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1066411733(1)arising out of the order dated 29.03.2022 u/s 147r.w.s144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Assessment Centre, Delhi for AY: 2017-18.
