Lalit Kumar Modi Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition under section 69 of the Income Tax Act on protective basis not justified since assessee established genuineness of transaction and creditworthiness of entity from which share application money is received.
Facts- As per the information received from Foreign Tax Division (FT & TR-I), CBDT, New Delhi, the Assessing Officer has summarised the credit cards purchases made by the assessee on the basis of credit card bills, details. Notably, during the year, the assessee has made huge payments through these credit cards as has been gathered from enquiries collected, hence the expenses incurred are liable to be treated as unexplained expenditure u/s 68 of the Act because the source of the expenditure is not explained. Accordingly, the Assessing Officer proceeded to make the addition u/s 69C of the Act by converting the amount of foreign currency spent by the assessee utilising 1 US $ = Rs.55 & 1 UK Pound = Rs.82 and made the addition of Rs.5,12,85,895/-.
Further, AO treated the entire investment of Rs.14,14,03,838/- received from Ananda Heritage Hotels P. Ltd. which is owned by the assessee as unexplained money u/s 69 of the Act. Also this is being added protectively in the hands of the assessee.
