PCIT Vs Overtop Marketing Pvt. Ltd. (Calcutta High Court)
The Calcutta High Court condoned a delay of 370 days in filing the Revenue’s appeal under Section 260A of the Income Tax Act, 1961, after finding that sufficient cause had been shown for not filing the appeal within the prescribed limitation period. The appeal challenged the Income Tax Appellate Tribunal’s (ITAT) order for Assessment Year 2015-16, which had deleted an addition of Rs. 4.51 crore under Section 68 and the corresponding disallowance of interest of Rs. 53,70,163. The Revenue contended that the Tribunal erred in accepting the identity, creditworthiness, and genuineness of the loan creditors based only on documentary evidence despite the Assessing Officer’s findings regarding the doubtful existence of the lending companies.
After hearing both parties and examining the orders of the Commissioner of Income Tax (Appeals) [CIT(A)] and the ITAT, the High Court observed that the creditworthiness of the lenders had been thoroughly examined. It noted that all lenders had directly submitted documents before the Assessing Officer. The Court further observed that the Assessing Officer had treated the companies as shell entities primarily based on certain statements of an individual, who had subsequently alleged that those statements were obtained under threat and coercion. The Court found that both the CIT(A) and the ITAT had independently evaluated the facts, with the CIT(A) also relying on the decision in CIT vs. M/s. Dataware Private Limited. The Tribunal had provided detailed reasons for concluding that the lenders’ creditworthiness stood established. Holding that no substantial question of law arose for consideration, the High Court dismissed the Revenue’s appeal.
