J K Associates Vs ITO (ITAT Ahmedabad)
In the matter abovementioned ITAT deleted the addition made AO on account of unexplained investment in property after observation that investment was made by partners of the firm and their details establishing identity, genuineness and creditworthiness were filed before AO.
Assessee filed ITR for AY 2017-18 at Nil income. Information was received that assessee firm had purchased immovable property of Rs.1 Crore during AY 2017-18. Case was reopened after recording proper reason. Assessment was completed u/s.147 r.w.s. 144B of the Act on 25.03.2022, wherein addition of Rs.1 Crore was made in respect of unexplained investment in the immovable property.
Appeal filed before CIT (A) was dismissed.
Before ITAT it was submitted on behalf of assessee that reopening was bad in law AO had not recorded any specific reason for escapement of income. No addition was made by the AO on the ground on which the case was reopened by the AO and, therefore, no other addition could have been made. Reliance was placed on the decision of Hon’ble Gujarat High Court in the case of CIT vs. Mohd. Juned Dadani (30 Taxmann.com 1) (Guj.) On the other hand revenue submitted that AO had not only recorded specific reason for escapement of income in respect of unexplained investment in immovable property but an addition of Rs.1 Crore was also made in the assessment order on account of unexplained investment in the immovable property. Case relied upon has different facts and circumstances.
