TMI Blog2018 (3) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. - ITA No.1589/Kol/2016 - - - Dated:- 9-2-2018 - Shri N.V.Vasudevan, JM And Shri M.Balaganesh, AM For The Appellant : Shri G.H.Seema, Addl. CIT, Sr. DR For The Respondent : Shri Sunil Surana, AR ORDER PER N.V.VASUDEVAN, JM: This is an appeal by the Revenue against the order dated 07.04.2016 of C.I.T.(A)-12, Kolkata relating to A.Y.2008-09. 2.. There is a delay of 19 days in filing the appeal by the revenue. It has been explained in the affidavit filed on behalf of the revenue that the delay in filing the appeal was due to administrative and procedural delays. The reasons given in the affidavit are accepted and we hold that there was a reasonable and sufficient cause for the delay in filing the appeal. The delay in filing this appeal is accordingly condoned. 3. The Assessee is an individual. For A.Y.2008-09 the assessee filed return of income declaring total income of ₹ 2,12,670/-. In the course of assessment proceedings u/s 143(3) of the Income Tax Act, 1961 the AO confronted the assessee with AIR information received by him which was to the effect that the assessee has made the following investments in various mutual fund schemes : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion can be made. 3. 8.08.2007 2,50,000/- Reliance Mutual Fund The investment was made from Standard Chartered Bank (A/c 476) vide age 4 was made out of the maturity of SBI Mutual Fund of ₹ 2,35. 350/- which was earlier made on 17.1.2007 vide Paper book page 4A. This investment was matured on 28.9.2007 (Rs. 2,60,383/-). Since the investment came out of the redemption of earlier years investments, no addition can be made during the assessment year in question. 4. 8.08.2007 5,00,000/- Reliance Mutual Fund Source explained vide SL 5. the investment was matured on 28.9.2007 vide paper book page 5 and put in Axis Bank bank (A/c 53). 5,20,768/- 5. 8.08.2007 39,25,000/- Reliance Mutual Fund Investment made from AXIX Bank (A/c 53) Cheque cleared on 14.7.2007. This was matured on 28.9.2007 vide paper book page-6 (Rs.40,88,029/-) The Investment was made out of maturity of SBI Mutual Funds of ₹ 19,42,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from A/c No. 53 on 28.9.2007 and in that account the deposit was from maturity of Reliance M F vide sl 7. This investment was matured on 22.11.2007 (Rs. 20,14.856) vide page 13 and maturity cleared in Axix bank Ale 137) 10. 23.11.2007 30,00,000/- Reliance Mutual Fund This investment was made out of the maturity of the investment in SL. 8 from Axix Bank (A/c 53). Hence no addition can be made. 11.. 23.11.2007 20,00,000/- Reliance Mutual Fund The investment was made from Axix Bank A/c No. 137 out of maturity of TD of ₹ 28,00,000/- made from a/c 53 on 8.10.2007 and maturity proceeds was ₹ 28,15,82/- credited in a/c no. 137 and further maturity of the Kotak mutual fund of ₹ 20,14,856/- of SI 9 out of which this investment and investment. 12. 1l.01.2008 39,50,000/- Reliance Mutual Fund The investment was made from Axix Bank A/c No. 137 The assessee received back ₹ 39.30.229/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of the AO was untenable. He held that the assessee had explained the source of funds for investments made in the previous year and therefore no addition could be made u/s 69 of the Act. The CIT(A) accordingly deleted the addition made by the AO. 9. The CIT(A) further noticed that the assessee had earned short term capital gain of ₹ 14,97,103/- on redemption of units of mutual funds during the previous year which were explained as source for making various investments in mutual funds during the relevant previous year. The details in this regard were as follows :- 10. The CIT(A) found that the assessee had not disclosed the aforesaid short term capital gain in his return of income. The CIT(A) accordingly directed the AO to bring to tax the short term capital gain of ₹ 14,97,103/-. 11. Aggrieved by the relief granted by the CIT(A) the revenue is in appeal before the tribunal. 12. The ld. DR relied on the remand report of the AO dated 11.12.2015 filed before the CIT(A) and submitted that when an investment matures for payments during the previous year the sum received on such maturity should also be regarded as a fresh source and even the source for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO to be not satisfactory. The remand report of the AO clearly admits this position. The case of the AO in the remand report was that on redemption of the investments made in the earlier year during the previous year, the investments made during the previous year becomes fresh investment. This stand of the AO is contrary to the provisions of sec.69 of the Act. There is no dispute about that fresh investments have been made during the year but all such investments have come out of the maturity of the investments made in earlier years. Therefore the source of investments made during the year have been explained. In view of the above the addition of ₹ 3,29,00,000/- cannot be sustained as unexplained investment of the assessee during the assessment year in question and was rightly deleted by the CIT(A). Further the earlier year s assessment have been reopened by the AO u/s 148. The source of funds for making investments of the units of Mutual funds which matured for payment can be examined only in the assessment year relevant to the previous year in which the investment was made. 16. In our view the above conclusions drawn by the CIT(A) is in accordance with law and does not r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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