Addition of unexplained investment unsustained on failure to establish that society was benamidar of assessee

ITO Vs Rajendra Shivhare (ITAT Raipur)

ITAT Raipur held that addition towards unexplained investment unsustainable as AO failed to place on record any material which would conclusively establish that the said society was a benamidar of the assessee. Accordingly, addition based on bald allegation couldn’t be accepted.

Facts- Original assessment was framed by the A.O in the case of the assessee vide order passed u/s.144 of the Act, determining his total income at Rs. 1,76,68,313/-, which thereafter was upheld by the CIT(Appeals).

On appeal, the ITAT, Bilaspur set-aside the order of the CIT(Appeals) and restored the matter to the file of the AO for fresh consideration after affording a reasonable opportunity to the assessee. AO pursuant to the aforesaid direction of the Tribunal framed assessment vide his order passed u/s. 144 r.w.s. 254 assessing the total income of the assessee at Rs. 1,71,30,153 / – after making various additions. CIT(A) partly allowed the appeal. Being aggrieved, revenue has preferred the present appeal.

Conclusion- When the assessee had duly demonstrated the investments in the immovable properties were sourced from his capital and withdrawals from his current account with the society i.e. CMS, therefore, there was no justifiable reason for the A.O to have drawn any adverse inferences in the hands of the assessee by holding any part of the same as unexplained investment u/s.69 of the Act.

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