Abuchi Infra Ventures Limited Vs ITO (ITAT Delhi)
Section 69 Cannot Apply to Recorded Investments: ITAT Delhi Deletes ₹1.11 Cr Addition Made on Mere Non-Compliance
Abuchi Infra Ventures Ltd filed its return declaring income of ₹1,27,520. The case was selected for limited scrutiny to verify investments, loans/advances & property transactions. Due to repeated non-compliance to notices u/s 142(1) & final show-cause, the AO passed a best-judgment order u/s 144, treating the full investment of ₹1.11 crore towards purchase of an auctioned property from Indian Bank as unexplained investment u/s 69 & applied s.115BBE.
Before the CIT(A)-NFAC, Assessee filed additional evidence, including:
- ledger of “advance against property”;
- bank statements showing payments through banking channel;
- registered sale deed dated 02.05.2019;
- explanation that the payment was made in FY 2016-17 & recorded in books;
- claim that funds were sourced from liquidation of investments.
CIT(A) admitted additional evidence, called for a remand report, but the AO did not respond. Despite this, the CIT(A) sustained the addition alleging incomplete details & doubting the explanation, without independently examining the documentary evidence.
Before the Tribunal, the assessee argued that section 69 applies only when the investment is NOT recorded in the books, whereas here the entire advance was duly recorded & paid through proper bank channels. Reliance was placed on SC in Best Cybercity India (P) Ltd (2021) & Gujarat HC in Simpex Granito (2024).
