Case Law Details
Hyfun Frozen Foods Pvt Ltd Vs ITO (ITAT Ahmedabad)
In a recent decision, the Income Tax Appellate Tribunal (ITAT) Ahmedabad ruled in the case of Hyfun Frozen Foods Pvt Ltd Vs ITO concerning an appeal against the order of the Commissioner of Income Tax (Appeals)-2, Ahmedabad, for the assessment year 2015-2016. The crux of the matter revolved around the addition of Rs. 95,47,000/- under section 69 of the Income Tax Act, 1961.
The appellant, Hyfun Frozen Foods Pvt Ltd, challenged the addition made by the Assessing Officer (AO) on the grounds that there was no evidence to support the presumption of cash payment to vendors for the purchase of immovable properties. The appellant argued that the cheques issued against the purchase of agricultural lands were outstanding and later cleared through exchange of fresh cheques, negating any presumption of prior cash payment.
The AO’s contention was that the sale deeds were executed without encashing the cheques issued for payment, and possession of the property was transferred to the appellant, suggesting unaccounted income used for the purchase. However, the appellant maintained that the delay in payment was due to title disputes, which were subsequently resolved, and payment was made through banking channels.
The ITAT, after thorough consideration of facts and legal precedents, concluded that the addition under section 69 was not warranted. Key points considered by the tribunal included:
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