Case Law Details
Dahisar Traders Pvt Ltd Vs ITO (ITAT Kolkata)
Introduction: The case of Dahisar Traders Pvt Ltd vs ITO (ITAT Kolkata) revolves around the failure of the taxpayer to adequately substantiate the question of identity and the source of funds. As a result, the Kolkata Income Tax Appellate Tribunal (ITAT) has remitted the matter for re-adjudication. Let’s delve deeper into the details of this case.
Detailed Analysis: The appeal was filed against the order of the Commissioner of Income-tax (Appeals), Delhi, for the assessment year 2011-12. The Income Tax Officer, Kolkata, had passed the order based on a reopening under section 147 of the Income Tax Act, 1961. The grounds of appeal primarily challenged the jurisdiction of the reopening, the legality of the assessment order, and the additions made by the Assessing Officer.
The core issue in this case revolved around the receipt of a significant amount by Dahisar Traders Pvt Ltd from Falcon Tyres Ltd (FTL), subsequently transferred to Miller Traders Pvt Ltd (MTPL). While MTPL complied with the notice under section 133(6) of the Act, FTL did not, leading to doubts regarding the identity and source of funds. Consequently, an addition of Rs. 9.36 Crore was made to the total income of the assessee under section 68 of the Act.
During the proceedings, arguments were presented by both parties. The appellant’s representative contended that the recorded reasons for reopening were borrowed satisfaction, and FTL was not proven to be a sham company. On the other hand, the Departmental Representative asserted that FTL was a shell company, and the source of the transacted amount remained unproved.
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