Case Law Details
Shaktigarh Textile and Industries Ltd. Vs DCIT (ITAT Kolkata)
Introduction: Shaktigarh Textile and Industries Ltd. found itself in a legal battle with the Deputy Commissioner of Income Tax (DCIT) in Kolkata, with a pivotal focus on Section 68 of the Income Tax Act. In this article, we delve into the case, the issues at hand, and the Tribunal’s decision.
Background: Shaktigarh Textile and Industries Ltd. contested an order from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated June 19, 2023, for the assessment year 2012-13. The company raised two grounds of appeal challenging the addition of Rs. 1,00,00,000, which they had received from M/s. Kasa Contrade Pvt. Limited, a Group Company.
The Cash Credit: The case originated from the assessee filing a ‘NIL’ return of income on September 21, 2012. Subsequently, the assessing officer issued a notice under section 143(2) to scrutinize the accounts. During the assessment, it was revealed that the sum of Rs. 1,00,00,000 had been credited to the assessee’s account on April 1, 2011, under the name of M/s. Kasa Contrade Pvt. Limited as share application money.
The Tax Authority’s Stand: The assessing officer deemed this cash credit as unexplained and made an addition to the assessee’s income. The appeal to the Commissioner of Income Tax (Appeals) did not provide any relief.
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