SHALINI JAGWAYAN,JAIPUR V. ITO WARD 4(4), JAIPUR

ITA 987/JPR/2024

AI Insights

The case involves Shalini Jagwayan, the appellant, who appealed against the orders of the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)] regarding the reassessment of her income for the assessment year 2011-12. The AO had reopened her case under section 147 of the IT Act, 1961, based on information that she had made unexplained investments in shares amounting to Rs. 4,50,000, which were not reflected in her original return of income. The CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal. The Tribunal examined the evidence provided by the assessee, including bank statements and transaction details, and concluded that the addition made by the AO was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35434 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Other Referred Cases: Vijay Harish chandra Patel vs. ITO 400 ITR 167(Guj.) (2018), Smt. Sushila Chahch vs. ITO ITA No. 683/Jp/2019 dt. 30.03.2021, Shri Narain Dutt Sharma vs ITO (ITA No.203/JP/2017 dated 07.02.2018), Mukesh Modi & Ors. vs. DCIT 366 ITR 418 (Raj), Dhakeshwari Cotton Mills 26 ITR 775 (SC), R.B.N.J. Naidu vs CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. vs CIT 32 ITR 56 (All), CIT vs Kulwant Rai 291 ITR 36( Del), CIT vs Shalimar Buildwell Pvt Ltd 86 CCH 250(All), St. Wilfred Educational Society vs. Pr. CIT (CENTRAL)18th March, 2019 (2019) 55 CCH 0633 JaipurTrib, (2019) 176 ITD 0675 (Jaipur-Trib)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY; VH
• Assessee Lawyers: SHRAWAN KUMAR GUPTA
• Keywords: Difference of opinion; Change of opinion; Unexplained investment; Salary income; Income from undisclosed sources; Reopening of assessment; Principle of natural justice; Assessment record; Competent authority; Transactions in derivatives; Reason to believe; Bogus
• Section: 147; 148; 144; 143(3); 143(2); 250; 69; 133(6); 139

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh xxu xks;y] ys[kk lnL;] ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;djvihy la-@ITA No. 987/JPR/2024 fu/kZkj.ko\"kZ@AssessmentYear : 2011-12 Shalini Jagwayan D-97, Shanti Sadan Ambabari, Jaipur. cuke Vs. The ITO, Ward-4(4), Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEPPJ9140P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Shrawan Kumar Gupta, Adv. jktLo dh vksjls@Revenue by : Shri Gautam Singh Choudhary, JCIT-VH lquokbZ dh rkjh[k@Date of Hearing : 12/12/2024 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 06 /03/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. The present appeal has been filed by the assessee against the order of ld. CIT (Appeals), National Faceless Appeal Centre, delhi [hereinafter referred to as “CIT(A)/(NFAC)”] dated 29.06.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2011-12. 2. The assessee has raised the following grounds of appeal :- 2 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO 1. The impugned order u/s 147 r.w.s 143(3) of the IT Act, 1961 dated 05.12.2018 as well as the notice u/s 148 and actionor proceeding u/s 147/148 are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 2. Rs. 4,50,000/-: The ld. CIT (A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 4,50,000/- made by the ld. AO on account of alleged unexplained investment for purchase of shares u/s 69. The ld. AO and CIT (A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense available on record. Hence the addition so made by the ld. AO and confirmed by the ld. CIT (A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full. 3. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B, C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full. 4. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 3. The brief facts of the case are that the assessee is an Individual and derives income from salary and interest income. The assessee filed her original return of income under section 139 declaring total income of Rs. 4,27,100/- on 14.12.2011 for the assessment year 2011-12. The AO on the basis of information available with him noticed that the assessee purchased shares of Rs. 4,50,000/- and the transaction of purchase of shares are not reflected in the ITR. The AO treating the purchase of shares out of books of accounts from undisclosed sources, observed that income to the tune of Rs. 4,50,000/- has escaped assessment. Accordingly, the AO believing that income to the tune of Rs. 4,50,000/- has escaped assessment, 3 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO reopened the case of the assessee by invoking provisions of section 147 of the IT Act, 1961, after recording reasons for initiating proceedings under section 148 of the IT Act, 1961. Thereafter, notice under section 148 of the IT Act, 1961 was issued to the assessee on 30.03.2018 through registered post, which was duly served upon the assessee. In response to the notice under section 148 of the IT Act, the assessee filed her return of income on 17.04.2018 declaring the income as declared in the original return of income filed on 14.12.2011. The assessee also filed reply and objection on 22.05.2018 against the issuance of notice under section 148, along with Balance Sheet for the year under consideration and earlier years and stated that there is no case of unrecorded purchases of shares of Rs. 4,50,000/- and no income has not escaped assessment under section 147 of the IT Act. The assessee has disclosed fully and truly all the material facts necessary for assessment in her books of account as evident from the copy of Balance Sheet as on 31.03.2011. In response to the objection of the assessee, the AO has relied upon the report of the Investigation Wing, Kolkatta and reasons recorded. Further notices under section142(1) and 143(2) were issued to the assessee on 04.09.2018 fixing the date of hearing on 11.09.2018. In response, the assessee filed written submission, which was examined and placed on record. The assessee vide letter dated 18.09.2018 furnished copy of bank pass book, ledger account of share purchase, ledger account of broker, details of shares, salary details Form 16 etc. 4 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO The AO considered the detailed submissions, but he did not find the explanation satisfactory and accordingly treating the amount as unexplained investment, made the addition under section 69 of the IT Act. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) considered the detailed written submissions and paper book furnished before him, but being not satisfied, he confirmed the addition made by the AO, by observing in para 6.2 and 6.3 as under :- “ 6.2 I have carefully considered the facts of the case, AO’s order and submissions of the appellant. On the basis of information available from the ITBA System, it was observed by the AO that the appellant purchased shares of Rs. 4,50,000/- but did not file the return for the year under consideration. The case was reopened by the AO for reassessment u/s 147 by issuing notice u/s 148 of the Act. Assessment in this case was completed u/s 144 r.w.s. 147 of the IT Act on 05.12.2018 assessing the income at Rs. 8,77,100/-. During the course of assessment proceedings, the AO found that the appellant purchased shares of Rs. 4,50,000/-. The AO sought details regarding the sources of purchase. However, the appellant did not file any reply with supporting documents regarding the source of investment made by her. Therefore, the AO added the amount of Rs. 4,50,000/- as unexplained investment u/s 69 of the IT Act. 6.3 During the course of appellate proceedings, notices of hearing were issued on several occasions affording opportunities to the appellant. In response to the same, the appellant made certain submissions along with documents. From the submissions made by the appellant it is seen that she has filed original return for the year under consideration on 17.04.2018, i.e. much later the due date mentioned in Sec. 139(1). However, the amount of Rs. 4,50,000/- towards purchase of shares was not reflected in the return. She has also furnished bank statement and ledger account giving details of her salary account. However, no individual is required to maintain ledger accounts unless she is into business or profession. In such a scenario, the veracity of the account cannot be verified and thereby such accounts cannot relied upon. In this case, what is perhaps more relevant is the entries in the bank statements duly reflecting the investments and availability of money in bank accounts previous to such investments and explanation for the sources of such available money. Merely claiming that her Gross 5 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO Total Income almost matches with the quantum of investment does not help the cause of the appellant because the appellant should demonstrate that the income earned was only invested and no outside funds were utilized for such investment. In this case, the appellant clearly could not prove before the First Appellate Authority that the sources of investment are from income ‘earned and declared’, with the help of bank statement. Therefore, the claims of the appellant are rejected and the grounds raised are dismissed.” Aggrieved from the order of the ld. CIT (A), the assessee filed this appeal before us. 4. Aggrieved from the order of the ld. CIT(A) the assessee has preferred this appeal before us on the grounds as reiterated in para 2 above. In support of the grounds of appeal the ld. AR of the assessee has relied upon the following written submission:- “1. Incorrect or wrong Reasons mentioned in the assessment order: At the very outset it is submitted that the ld. AO has wrongly noted in the assessment order that as per AST no return of income has been filled by the assessee for the year vide page 1 of the assessment order, while the assessee is regular IT assessee for last so many years. And in the reasons recorded it is also mentioned that the assessee has filed her ROI on 14.12.2011. In the reasons the ld. AO noted that for the ROI filed the no Scrutiny assessment was made u/s 143(3), hence income has escaped assessment. In this regard it is submitted that the ld. AO has issued the notice u/s 148 only on the basis of information received from Kolkata Wing and the ld. AO has not verified the ROI. Hence the notice u/s 148 was given on wrong facts and information and without any material in the possession of the ld. AO because all the information and material has been either gathered or provided during the course of assessment proceeding. Hence when the reason for reopening as per assessment order and as per the ld. CIT(A) itself wrong, incorrect and without material and all together reverse then all the proceedings are void ab-initio and liable to be quashed. In the case of Vijay Harish chandra Patel vs. ITO 400 ITR 167(Guj.) (2018) where it has been held that” When very basis for reopening no longer survives, assumption of jurisdiction u/s 147 by AO by issuing notice u/s 148 was without authority of law and could not be sustained. 6 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO Recently the Honble ITAT Jaipur Bench Jaipur in the case of Smt. Sushila Chahch v/s ITO in ITA No. 683/Jp/2019 dt. 30.03.2021 has quashed the notice as well as assessment order under the same facts and circumstances of the case copy of order is enclosed. Wherein it has been held that” In light of aforesaid discussion and following the decision referred supra, where the very foundation for reopening the case is vitiated given that the assessee has filed her return of income disclosing the transaction of sale of immovable property for the specified consideration and offering the same to tax, there cannot be any reasons to believe that income has escaped assessment for the very same transaction the assumption of jurisdiction u/s 147 cannot be sustained and the subsequent proceedings are hereby directed to be set-aside. Also refer Shri Narain Dutt Sharma vs ITO (ITA No.203/JP/2017 dated 07.02.2018) 2. No income escaped: Further it is submitted that the notice u/s 148 can be issued only when there is any escapement of income because S. 147 provides that If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, here the assessee has not escaped any income he has disclosed all the income in the return of income, the AO has reopened the case on the basis of information received from the Kolkata Wing for the investment in purchase of shares for Rs.4,50,000/-. As appearing from the reasons and assessment order the ld. AO has issued the notice u/s 147/148 only and only in compulsion that the assessee has purchased the shares of Rs.4,50,000/-. However he has failed to consider that the assessee is a regular IT assessee since last so many years and having income from salary and other sources, she is maintaining personal books and preparing the capital A/c and Balance Sheet since starting. For the year she has also filed her ROI declaring the Gross income of Rs.4,69,997/- and total income of Rs.4,27,100/- and when she was having so much income in this year and for earlier years and hence no escapement of income is involved and also no income has been accrued or arose. Hence if there is no escarpment then the notice issued u/s 148 is invalid. 3. Reason to believe and not reason to suspect: 3.1It is submitted that even under the amended law by the finance act 1989 the condition precedent or words, which continues right since inception till date, are “reason to believe\" and not \"reason to suspect\". The word “believe” has to be understood in contradistinction of suspicion or opinion. Belief indicates something concrete or reliable. Kindly refer Gangasharan& Sons Pvt. Ltd. 130 ITR 1 (SC), and ITO v. LakhmaniMewal Das, (1976) 103 ITR 437 (SC). 3.2The belief of the Officer should be as to escapement of income and the belief should not be a product of imagination or speculation. There must be reason to induce the belief. 3.3Further, the belief must be of an honest and reasonable person based upon reasonable grounds. The officer may act on direct or circumstantial evidence; but his belief must not be based on mere suspicion, gossip or rumor as appearing from the reasons recorded and assessment order in the present case. The AO would be acting 7 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the provision of law. The Court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the Court (Sheo Nath Singh v. AAC, (1971) 82 ITR 147 (SC). 4. In the present case on the facts it can be proved that the ld. AO did not have any material or evidence direct or circumstantial evidence to have based his belief, nor that his belief was bona-fide and in good faith. Because the AO has issued the notice u/s 148 only on the basis of information received from the Kolkata Wing. The information was borrowed not his own i.e he has not recorded his own satisfaction because at the time of issue of notice he was not having a single documents which is very clear from the assessment record itself and letter of AO, rather he has ignored the material evidences available on record (in the form of ITR and other details). The ld. AO neither made any enquiry nor collected any material that the assessee was having any unaccounted income or unexplained investments nor brought the evidence on the record that the assessee has escaped any actual income. He has proceeded only on imagination or suspicion rather than to reason to believe. He has only information borrowed, hence no notice u/s 147 can be issued on the borrowed information. In the case of Mukesh Modi & Ors. vs. DCIT 366 ITR 418 (Raj) held that Evasion of tax was menace to society but Assessee contributing to the exchequer in form of tax could not be allowed to suffer on mere pretence that it had evaded payment of tax. Rowing and fishing enquiry in hands of AO on mere suspicion or change of opinion could not satisfy expression \"reason to believe\" exposing Assessee for reopening of assessment. Notice for reopening of assessment was not in consonance and in conformity with under Section 147 and made specified notice vulnerable. High Court pointed that, reasons given by AO for issuance of notice for Re-assessment were not plausible and convincing. In fact order, where objections were rejected by AO, was not self-contained speaking order. Upon perusal of the order, it was amply clear that the same contains conclusions and is bereft of reasons.(para 12) Notices issued to Assessee by AO under Section 147/148 were not satisfying the pre-requisites for same. There was no whisper in the notice, or iota of proof that while issuing same. AO had reason to believe that any income chargeable to tax had escaped assessment for the assessment year. Notice issued by AO simply for his own verification and to clear his doubts and suspicions to re-examine the material which were already available on record at time of passing of t earlier assessment orders. The legislature under Section 147 has not clothed AO with such jurisdiction therefore the action could not be upheld in the background of facts of instant case. One more redeeming fact which had direct nexus with the subsequent re-assessment proceedings and ramification of the same had culminated into re-assessment orders was the impugned order where AO rejected the objections submitted by Assessees pursuant to notice under Section 147/148. Order passed by AO in this behalf was not a speaking order which could not be sustained. In view of legal infirmity in the notice under Section 147/148 and laconic 8 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO order of AO while rejecting objections Assessee the consequential assessment Orders were liable to be annulled.(para16) In the present case on the perusal of the reason recorded that it is clear that the AO was having reason to suspect not reason to believe. Because the ld. AO has issued the notice u/s 148 only on the basis that assessee has purchased the shares for Rs.4,50,000/- but no transaction of the same has been shown in the return filed. Thus the assessee did not disclose fully and truly all material facts necessary for his assessment therefore I have reason to believe that the income of Rs.4,50,000/- has escaped assessment. The reason is itself says that there is no any evidence that the assessee has really having any unaccounted income or unexplained investment. When the assessee is having such higher income in every years filling her ROI regularly, she can invest such amount easily. Once there is no undisclosed income at all, there can’t question of any escapement thereof. It was only suspicion on the part of AO. The above judicial guidelines, do not support his case. Hence the notice u/s 148 may kindly be quashed and oblige. 7. Notice is barred by limitation: Further the notice issued by the ld. AO is barred by the limitation, because the ld. AO has issued the notice u/s 148 on 30.03.2018 but the same is served upon the assessee on 02.04.2018 and it is settled legal position that not only the notice issued but the notice must be served upon the assessee before the expiry of lime limit and in this case the time limit has been expired on 31.03.2018, when the notice has been served on 02.04.2018, and we have also submitted to the ld. AO “if in this regard there is any doubt the same can be verified from the record of the ld. AO. If in this regard having any doubt inquiry may be made from the ld. AO.” Vide PB 40. But the ld. CIT(A) has not speak a single word on the same. 9. Objections has not been decided:The assessee has firstly filed the objections on dt. 22.05.2018 which has been disposed of on dt. 30.05.2018, without taking in to consideration of our explanation and details, hence the assessee has again filed the objections on dt. 07.06.2018, which has not been disposed of by the ld. AO. And it is the settled legal position that when the objection raised by the assessee on 148/147 then it is duty of the AO to dispose of the same by passing the speaking order. Non deciding the objection has been held the assessment proceeding null and void ab- initio.. On this preposition kindly refer the decision of Honble Raj. High Court in the case of M/s K.C. Mercantile (Presently Known As Genus Innovation Limited) v/s CIT DBITA No. 292/2016 dt. 07.11.2017. Further the matter is now directly covered, as under the same facts, circumstance in the assessee’s group case namely in Yashpal Agrawal the Honble ITAT In ITA No. 268/Jp/2023 dt. 30.06.2023 has quashed the assessment order on the grounds that the objections filled by the assessee against the proceedings u/s 147/148 has not been decided here is also the same position, the Group is same AO same order same issue are same. Copy of Honble ITAT order is enclosed. 9 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO 8. Hence in view of the above facts, circumstances and legal position the assessment proceedings may kindly be quashed. GOA-2: Addition of Rs. 4,50,000/- on account of unexplained investment in purchase of commodity transactions: SUBMISSIONS: 1. Correct Facts of the case: At the very outsetwe have to bringon record the correct facts before your honor which have been ignored by both the ld. AO and CIT(A) despite available before them. That the assessee is a regular IT assessee and filling her ROI regularly last so many years, she is maintaining the books of account as she has also filed her balance sheet before the ld. AO and the ld. AO has not found any defects nor rejected the same but also accepted the all other transaction mentioned therein. The assessee is having income from salary and other source, hence neither law required to furnish the Income and expenditure account, balance sheet in the ROI nor there is any column in the ROI form. All the income and expenditure and investment of the assessee is verifiable from the Balance sheet(PB15) of the assessee, as there is opening capital of the assessee was 27,23,483/- and closing balance/ capital was 31,14,756/-. Most of the income of the assessee are from through the banking channel and the income of the assessee is being assessed every year by the Revenue from last so many years. The transaction for the purchase of shares are from the disclosed or assessed or accepted sources and duly reflected in the books of account and through banking channel no amount of cash involved also not proved by the revenue. The observation of the ld. CIT(A) that “what is perhaps more relevant is the entries in the bank statements duly reflecting the investments and availability of money in bank accounts previous to such investments and explanation for the sources of such available money. Merely claiming that her Gross Total Income almost matches with the quantum of investment does not help the cause of the appellant because the appellant should demonstrate that the income earned was only invested and no outside funds were utilised for such investment. In this case, the appellant clearly could not prove before the First Appellate Authority that the sources of investment are from income ‘earned and declared’, with the help of bank statement.” These observations are absolutely wrong incorrect when assessee has filed the her bank statement, her ledger account in the books of M/s S.R. Proteins Pvt. Ltd from where she was receiving the salary and interest income and there was her opening balance of Rs.14,02,134/- in M/s S.R. Proteins Pvt. Ltd out of which amount of Rs.4,52,378/- was transferred in the bank account of assessee which has been invested in the shares. Then how the ld. CIT(A) can say or assumed that sources of investment are not from income ‘earned and declared’, and not verified with the help of bank statement, when the same are verifiable with both the bank statements and book. 10 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO Further the ld. CIT(A) has blindly stated that” from the submissions made by the appellant it is seen that she has filed original return for the year under consideration on 17.04.2018, ie much later the due date mentioned in Sec.139(1).” When in our submissions we nowhere stated that no return is filled u/s 139(1), when in the paper book filed before the ld. CIT(A) we had filed the ITR at PB 1-3 and filed the ITR filed on dt. 17.04.2018 in response to the notice u/s 148 vide PB 6-10, these shows that how the ld. CIT(A) has proceed and passed the order by giving the wrong finding, which is deserve to be deleted. Our WS is also enclosed herewith at PB 35-43. The ld. CIT(A) has not tried to look the documents and WS in properly. It is also the admitted facts on the revenue record that the income of the assessee is being assessed regularly last so many years and not doubted by the ld. AO and the ld. AO has also nowhere stated that the accumulated capital of the assessee are bogus and not utilized in purchase of shares and also ignored by the ld. CIT(A) despite available before him. 2. In support the assessee has submitted Balance sheet as at 31.03.2010 and 31.03.2011 (PB15), Bank statement (PB20-22), ledger account (PB23-25), share accounts (PB25-26), ledger account of M/s S.R Proteins (PB30 and 30) from where she was getting the salary, salary certificate or Form 16(PB31). When the assessee has furnished all these evidences regarding in support of sources of investment in shares, which have not been rebutted or disproved by both the lower authorities, then how it can be said that the investment was unexplained, despite these the ld. AO has wrongly or blindly stated that no reply or details filed and the ld. CIT(A) has also ignored all these evidences and proceeded on his own suspicion, assumption and presumption and without stating that how the assessee should demonstrate the sources and what other documentary evidences he is required, and what is the wrong in the documents filled by the assessee, , which show that how the ld. AO has applied his mind and passed a baseless order. If despite these evidences if the ld. AO and CIT(A) were having any doubt they must have brought adverse material in their support and they were was required to explain that how these are not sufficient with the help of contrary evidences. Further the assessee has sold this share on 01.07.2014 for Rs.4,50,000/- and incurred loss of Rs.1628/- which has been duly recorded in the books or profit & loss account and return for A.Y. 2015-16(PB23) and accordingly filed the return of income for that year. 3. Further it is very important to note, as admitted by the ld. AO himself in the assessment order that he had made enquiry or received the details or information u/s 133(6) regarding the income declared by the assessee from M/s S.R. Proteins Pvt. ltd from where she was getting the salary and interest from the bank and not found any wrong. The assessee has discharged her onus lay upon her by filing various evidences as above. On the other hand the ld. AO has not discharged his onus lay or cast upon him by the law by 11 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO bringing any contrary evidences, rather made the additions which is against the principal of natural justice and against all the applicable provisions of the laws, and the ld. CIT(A) has also given wrong and baseless observation without going through the WS and documents filed before him. 4. From the assessment order and CIT(A) order and from the view of both the AO and CIT(A) it is very clear that despite having all the vital material, evidence and source on record the ld. AO made the addition only and only to justify his action taking u/s 148, otherwise no addition is required looking to the all above facts and evidences on the record. 5.However both the lower authorities have not rebutted those evidence as above with the help of any documentary evidences or material rather proceeds his own presumption, assumption and suspicion. Whether any addition can be made without any basis or material, without disproving the details furnished, no addition can be made only on the assumptions, presumptions or guess work. And looking to the record and assessment order it is very clear that the ld. AO has proceeded only suspicion, without any cogent material evidence. It is settled principle of law that an allegation remains a mere allegation unless proved. Suspicion cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s Kulwant Rai 291 ITR 36( Del). In CIT v/s Shalimar Buildwell Pvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law. In the case of St. Wilfred Educational Society vs. Pr. CIT (CENTRAL)18th March, 2019 (2019) 55 CCH 0633 JaipurTrib, (2019) 176 ITD 0675 (Jaipur-Trib) it was merely a suspicion gathered through the preliminary enquiry conducted during the survey and search operations. A suspicion howsoever strong cannot be a basis to deny a legible claim of the assessee unless and until it is supported by verifiable evidence on record brought out through the process of detailed investigation. 6. Hence in view of the above facts, circumstances and legal position entire addition may kindly be deleted in full.” 5. On the other hand, the ld. D/R supported the orders of the lower authorities. 6. We have heard the rival contentions, perused the material on record and gone through the orders of the lower authorities. In respect of ground no. 1 challenging the initiation of proceedings under section 147 read with section 148 12 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO of the Income Tax Act, 1961 by the AO, we find that in support of assessee’s case no new fact/submission, other than facts narrated before the ld. CIT (A), has been furnished before us to controvert the findings of the lower authorities. Thus, invocation of proceedings under section 147 read with section 148 of the IT Act, 1961 is upheld. The ground no. 1 of the assessee is dismissed. 6.1 In respect of Ground No. 2, the assessee agitated the addition of Rs. 4,50,000/- made by the AO and confirmed by the ld. CIT (A).As per the details furnished before us, we find that the assessee is a regular income-tax assessee.The assessee has filed her original return of income under section 139 of the IT Act, on 14.12.2011 along with computation of total income. In the assessment order the AO has mentioned that the assessee has not filed her return of income for the year under consideration i.e. AY 2011-12 and thus could not verify the tax liability in the transaction of purchase/sale of shares, whereas in the reasons recorded the AO has mentioned the date of filing of return for the year under consideration as 14.12.2011. The ld. A/R has controverted this observation of the AO by filing the copy of ROI filed on 14.12.2011. The assessee also filed her return of income on 17.04.2018 in compliance to notice under section 148 of the IT Act, 1961. As per paper book, the assessee has furnished detailed documentary evidences viz. salary statement in Form 16, income from other sources and bank statement, balance sheet etc. before the lower authorities in support of investment made in purchase of 13 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO shares. The appellant has also furnished ledger account of Shares of Global Capital (APB 23), ledger account of Shriyam Financial P Ltd. (APB 24), Global report of share transactions for the relevant year executed through Shriam Financial P Ltd. (APB 25), ledger account of the appellant in the books of Shriam Financial P Ltd. (APB 26) and on verification of all such documents we notice that the appellant had purchased 30000 shares of Global Capital Market @ Rs. 15/- each totaling to Rs. 4,50,000/- on 03.01.2011 for which the broker Shriam Financial P Ltd. had issued a contract note dated 03.01.2011 for Rs. 4,51,628/- comprising of cost of purchase for Rs. 4,50,000/- and other charges such as STT, Turnover Tax, brokerage etc. and the assessee had paid a sum of Rs. 4,52,378/- to the above named broker on 13.01.2011 which entry is verifiable from the entry dated 13.01.2011 appearing in bank statement of the assessee (APB 21) and source of such payment is receipt of a sum of Rs. 4,52,378/- from S.R. Proteins P Ltd. vide cheque cleared in the bank account of the assessee on 01.01.2011 and same stands verified with the account statement of the appellant in the books of S.R. Proteins P Ltd. (APB 30). We have perused all these documents. On perusal of theabove cited documents we are convinced that the appellant had proper source for investment of Rs. 4,50,000/- in the shares in contrast to reasons recorded by the AO to initiate proceedings u/s 147 as unaccounted purchase of shares. As assessee was having income from salary and other sources, hence law do not require the 14 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO assessee to furnish income and expenditure account, balance sheet in the ROI, but the assessee maintained the same for her own benefit. All the transactions and investment of the assessee are verifiable from the above stated documents, and Balance sheet of the appellant which is placed on record (APB 15). Thus the sources of investment of Rs. 4,50,000/- in the shares is duly verifiable and established. The observation of the ld. CIT (A) that sources of investment are not from income earned and declared and not verified with the help of bank statement has no force. The ld. DR has not rebutted the document/evidences filed by the assessee. As per settled preposition of law, addition cannot be made on the basis of assumption, presumptions or guess work. 6.2 Therefore, looking to the above facts and circumstances narrated above, addition made by the AO is not sustainable and the same is directed to be deleted. The ground no. 2 is allowed. In the result, this appeal of the assessee is partly allowed. Order pronounced in the open court on 06/03/2025. Sd/- Sd/- ¼xxu xks;y ½ ¼MkWa-,l-lhrky{eh½ (Gagan Goyal) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 06/03/2025 *Santosh 15 ITA No. 987/JPR/2024 Shalini Jagwayn vs. ITO vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shalini Jagwayan, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-4(4), Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 987/JPR/2024) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar "