Unexplained investment addition of ₹12.30 Cr deleted – Funds for software project proved; Rule 46A objection rejected – ITAT Delhi

ITO Vs Prem Softech Private Ltd. (ITAT Delhi) In ITO vs Prem Softech Pvt. Ltd. (A.Y. 2014-15), the AO treated ₹12.30 crore invested in mutual funds as unexplained investment u/s 69 and also estimated income on contractual receipts after reopening assessment u/s 147. The CIT(A) deleted the addition after examining bank statements, mutual fund records and financials of Prem Power Construction Pvt. Ltd., which showed that funds were received for software development and later returned in the same year. Before the ITAT, the Revenue argued violation of Rule 46A and lack of creditworthiness of the...