Case Law Details
Southern Road Carriers Ltd Vs DCIT (ITAT Kolkata)
Introduction: In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Kolkata has deleted tax additions made against Southern Road Carriers Ltd. This article breaks down the appeal, the grounds for it, and why the ITAT ruled the way it did.
Grounds of Appeal
Share Capital Treated as Unexplained Cash Credit: The primary contention was around an addition of Rs. 1,06,74,500 made by the Assessing Officer under Section 68 of the Income Tax Act. The Assessing Officer had treated the share capital received by Southern Road Carriers Ltd as unexplained cash credits.
Assessing Officer’s Findings: The Assessing Officer observed a specific pattern of cash flow between the company and four major shareholders who were relatives of the company’s directors. However, the company argued that the transactions were legitimate, compliant with the law, and duly confirmed by the shareholders.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
