Case Law Details
Arshiya Limited Vs DCIT (ITAT Mumbai)
Introduction: In the case of Arshiya Limited vs. DCIT (ITAT Mumbai), the Income Tax Appellate Tribunal (ITAT) ruled on the addition in the 153A assessment and whether it can be made solely on the basis of incriminating material. This article delves into the details of the case, the arguments presented, and the final decision reached by ITAT Mumbai.
Detailed Analysis: The case involves appeals for the assessment years 2010-11 and 2012-13. Arshiya Limited, the assessee, was engaged in various business activities, including free trade warehousing, special economic zones, supply chain management, warehousing, freight forwarding, rail transportation, and software development.
The Income Tax Department conducted a survey operation under Section 133A of the Income Tax Act on 20th January 2014 and later carried out a search operation under Section 132(1) on 13th June 2014. Subsequent to the search operation, the Assessing Officer completed the impugned assessments under Section 153A read with Section 143(3) of the Act.
In the assessment for the A.Y. 2010-11, the Assessing Officer made additions related to alleged commission expenses and disallowed interest expenditure. However, the Commissioner of Income Tax (Appeals) or CIT(A) held that these additions could not be sustained as they were not based on any incriminating material. The CIT(A) also pointed out that the addition of interest disallowance was unwarranted as the assessee had sufficient interest-free funds.
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