INCOME TAX OFFICER, WARD 2(2), GURUGRAM, GURUGRAM V. LIMITLESS KNOWLEDGE PRIVATE LTD., GURGAON

ITA 4227/DEL/2024

AI Insights

The case revolves around an appeal by the Income Tax Officer, Ward-2(2), Gurgaon against Limitless Knowledge Pvt. Ltd., concerning the reassessment of income for the assessment year 2012-13. The primary issue was the addition of Rs. 3,00,00,000 to the assessee's income, which was initially deemed unexplained by the Assessing Officer (AO) under Section 143(3) read with Section 147 of the Income Tax Act, 1961. The CIT(A) later deleted this addition, a decision which the Revenue challenged in the Tribunal. The Tribunal's decision to dismiss the appeal was based on the finding that the assessee had adequately explained the source of the advance through documented evidence, which was not considered by the AO in the original assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312944 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings; Unexplained investment
• Section: 147; 143(3)

Judgement Text

"1 ITA No. 4227/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E ”: NEW DELHI BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 4227/DEL/2024 Assessment Year: 2012-13 Income Tax Officer, Ward-2(2), Gurgaon. Vs Limitless Knowledge Pvt. Ltd., Ireo Campus, Sector-59, Gurgaon-122101. APPELLANT RESPONDENT Assessee represented by Shri Ruchesh Sinha, Adv. Department represented by Shri Amit Katoch, Sr. DR Date of hearing 10.03.2025 Date of pronouncement 30.04.2025 O R D E R PER Ms. MADHUMITA ROY, JM: The instant appeal, filed by the Revenue, is directed against the order dated 21.06.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 24.12.2019 passed by the ACIT, Circle-3(1), Gurgaon under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for assessment year 2012-13, whereby and whereunder the addition made by the Ld. AO has been deleted. 2. Heard and parties and perused the records. 2 ITA No. 4227/Del/2024 3. The assessee filed its original return for A.Y. 2012-13 at a loss of Rs. 77,47,709/- on the basis of information received by the Department that the assessee had given certain advances to the tune of Rs. 3,00,00,000/- to M/s M. Public S or RG Reality Private Limited, the source whereof remained unexplained and thus assessment was reopened under Section 147 of the Act with the prior approval of the Ld. PCIT. After procedural formalities being completed the Ld. AO finalized the reassessment proceedings upon making the addition of Rs. 3,00,00,000/- to the returned loss of Rs. 77,47,709/- and the income was assessed at Rs. 2,22,52,290/-. In appeal remand report was sought for and on the basis of the remand report the Ld. CIT(A) deleted the addition with the following observations: “5.4.4 It is seen that the appellant had received a total of Rs.21.92 Crs as investment from Tiffany Ltd., Mauritius (which is a parent company) in form FDI through banking system after regulatory approval. (Appellant is 100 percent subsidiary of the Tiffany Ltd., Mauritius) It received Rs.21.92 Crs in FY 2010-11 and Rs.0.5 Crs in FY 2011-12. This was advanced to group company Ireo Waterfront Pvt. Ltd. which was received back and out of it Rs. 3.00 Crs was advanced to the RRG Realty Pvt. Ltd. Thus, the appellant has clearly explained the source of advance of Rs.3 Crs made to RRG Realty Pvt. Ltd., for land aggregation. The said amount has been received back, for which evidence were provided to the Ld.JAO. The assertion made in the assessment order vide DIN & Letter No: ITBA/AST/F/17/2019- 20/1022992829(1) dated 24/12/2019, that 'On perusal of the various notices issued to the assessee, it has been observed that despite of issuance of our show cause notice dated 14.11.2019, the assessee did not submit any details with respect to the source of investments of Rs. 3,00,00,000/- made by the assessee in the form of loans and advances given to RRG realtors Private Limited. It is also noteworthy to mention here that in the same year the assessee has filed a return showing losses of about Rs. (77,47,709/-) and simultaneously it has advanced such huge amount toanother company. 3 ITA No. 4227/Del/2024 Therefore, the assessee has not provided any documentary evidence such as Ledger's, confirmations, its balance sheet, its profit and loss account or any other financial statements to prove the source of these investments. Therefore they are unexplained investments made by the assessee and added back to the return of the assessee for assessment year 2012-13.' is not in order, as the submissions were uploaded during the assessment proceeding, which were not considered while passing the assessment order. Ld.JAO was provided with all the evidence qua source of the investments of Rs.3 Crs made by appellant in form of loans and advances given to RRG Realtors Pvt. Ltd. 5.4.5 Qua 69A - where in any financial year the assessee is found to be the owner of any money, bullion, jewelry, or other valuable article and such money, bullion, jewellery, or valuable article is not recorded in the books of account, if any. maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery, or valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery, or other valuable article may be deemed to be the income of the assessee for such financial year. So, the conditions under Section 69A are as follows: The assessee (taxpayer) is found to be the owner of money, bullion, jewelry, or other valuable articles. These assets are not recorded in the books of account maintained by the assessee for any source of income. The assessee does not provide a satisfactory explanation regarding the nature and source of acquisition of these assets. If the explanation provided by the assessee is not deemed satisfactory by the Assessing Officer, they have the authority to treat the value of the assets as the income of the assessee for that financial year. 5.4.6 Thus, in view of above discussions and lack of marshalling of contrary evidence in assessment order/remand report proceedings, I have no hesitation in holding that appellant had discharged its onus by providing plethora of documents/evidence on record, to Ld.JAO. No adverse inference has been drawn on the documents available in assessment proceedings and even in the remand report proceedings. As the onus has not been discharged 4 ITA No. 4227/Del/2024 and remained on Ld.JAO, therefore, it is held that addition made to income under section 69A is to be deleted. Relief is thus allowed in terms of Grounds of appeal. 4. Having regard to the fact that the assessee provided sufficient evidences to the Ld. AO whereon no adverse inference was drawn the deletion of addition made by the Ld. CIT(A) is deemed to be just and proper so as not to warrant any interference and is therefore upheld. 5. The appeal preferred by the Revenue is, thus, dismissed. Order pronounced in open court on 30.04.2025. Sd/- Sd/- (NAVEEN CHANDRA) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "