2025 (7) TMI 1236 - AT - Income Tax

Unexplained investment - assessee submitted that he has taken loan from ECL Finance Limited invested in the following companies bonds and interest earned thereon - HELD THAT - Since the sources of the investments have been furnished and the interest earned is less than the taxable limit we hold that no addition is warranted. In the result the appeal of the assessee is allowed.

Summary

The Appellate Tribunal (ITAT Ahmedabad) allowed the assessee's appeal against the order dated 21.08.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre for AY 2019-20. The key grounds included alleged violation of natural justice due to dismissal on limitation without proper hearing, invalidity of notice issued under section 148, vagueness of reasons under section 147, wrongful addition under section 69, incorrect application of section 115BBE, and improper levy of interest under sections 234A, 234B, and 234C. The Tribunal found that the assessee had substantiated the source of investments amounting to Rs. 40,00,000 by demonstrating a loan taken from ECL Finance Limited and investment in bonds of specified companies. The interest earned was below taxable limits. Consequently, the Tribunal held that "no addition is warranted." The appeal was allowed, setting aside the impugned order, thereby affirming the principle that additions under section 69 require clear and substantiated reasons and that procedural fairness must be observed in appeals dismissed on limitation grounds.