Case Law Details
Hiral Exports Vs ITO (ITAT Mumbai)
In the case of Hiral Exports vs. Income Tax Officer (ITO), Mumbai, the Income Tax Appellate Tribunal (ITAT) delivered a significant verdict, overturning the addition of Rs.40,82,500 made by the assessing officer under section 68 of the Income Tax Act. The dispute arose from the treatment of funds received from M/s Vishal Gems by Hiral Exports during the assessment year 2012-13. Let’s delve into the details of this case and the reasoning behind the ITAT’s decision.
Detailed Analysis:
The crux of the matter revolved around the categorization of funds received from M/s Vishal Gems by Hiral Exports. The assessing officer contended that these funds constituted unexplained cash credits under section 68 of the Income Tax Act. However, Hiral Exports argued that the funds were received against sales made to M/s Vishal Gems, and thus, should not be treated as unexplained credits.
During the assessment proceedings, Hiral Exports provided substantial evidence to support their claim. They presented a letter of confirmation of accounts from Vishal Gems & Jewels, indicating sales transactions and payments received. Additionally, Hiral Exports furnished copies of sales registers, invoices, and bank statements, corroborating the sale transactions with Vishal Gems.
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