Case Law Details
PCIT Vs Sreeleathers (Calcutta High Court)
Held that assessee submitted the records. Hence, the assessee has discharged his initial burden and the burden shifts on the assessing officer to enquire further into the matter which he failed to do.
Facts-
The assessee is a firm involved in the business of trading/ retailing of footwear and other leather and non-leather accessories. AO on examination of records noticed that the assessee had received unsecured loans from various companies and the names of 13 such companies were furnished and it was alleged that those companies were the “paper companies” having no worth. The assessee was directed to show cause on the said issue in respect of one such company. By letter dated 22.12.2017, the assessee informed the Assessing Officer that all transactions with one of such company namely, M/s. Fast Glow Distributors Pvt. Ltd. were made through banking channels. To establish the identity of the lender the assessee enclosed the copy of their PAN card, the income tax acknowledgement, copy of bank statement, certificate of incorporation, master data from the register of companies and proof to show that the notice under Section 133(6) of the Act was duly served on the lender.
AO concluded that those lender companies are artificial and the transactions are not genuine. Thus, the unsecured loans availed by the assessee, were considered to be the assessee’s own funds and they being unsecured cash credit was added back to the assessee’s income. Penalty proceedings were to be initiated separately.
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