CIT v. Purshottam Khatri
INCOME TAX ACT, 1961
Income from undisclosed sources - Addition under section 69 -Unexplained investments
In course of search conducted upon assessee, not ordinarily resident, certain shares were seized. AO viewed that said shares were purchased in name of assessee and his family members, whereas assessee had shown a amount withdrawal for purchase of shares and a remaining deficit amount was left unexplained. Thereupon, AO noticed that shares had been purchased from secondary market and took investment in shares and as assessee had furnished explanation towards investment amount withdrawn from his bank account, and therefore he made addition of differential amount on account of unexplained investment. Tribunal held that total investment in shares shown in balance sheet was more than face value of shares seized during course of search, and accordingly, AO view that assessee had purchased shares from secondary market was not justified as assessee was original allottee of share. Held:As asssessee had provided explanation in respect to source of investment in shares and therefore, there was no reason for AO to made addition. Hence, addition made by AO was deleted and order of Tribunal was upheld
Income-tax Act, 1961, Section 69
A.Y. :Block period 1-4-1986 to 18-10-1996
Decision: In favour of assessee.
Case Law Analysis:M. Janardhana Rao v. Joint CIT [2005] 273 ITR 50/ 142 Taxman 722 (SC) [Para 5], CIT v. Ashok Kumar Jain [2005] 272 ITR 385/[2004] 140 Taxman 625 (MP) [Para 5], CIT v. Kantilal [2005] 273 ITR 90 (MP) [Para 5], CIT v. V. Raghavan [2005] 274 ITR 64 (MP) [Para 5], CIT v. Calcutta Agency Ltd. [1951] 19 ITR 191 (SC) [Para 6], and Mehta Parikh & Co. v. CIT [1956] 30 ITR 181 (SC) [Para 13].