Winner Tradecom Pvt. Limited Vs ITO (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, in the case of Winner Tradecom Pvt. Limited Vs ITO, addressed the validity of an addition of ₹15,00,000/- made under Section 68 of the Income Tax Act, 1961, which governs unexplained cash credits. The appeal was for the Assessment Year (A.Y.) 2018-19.
Background of the Dispute
The assessee, Winner Tradecom Pvt. Limited, is a private limited company that initially filed a return declaring an income of ₹78,750/-. The case was selected for scrutiny under Section 147 after the Investigation Wing provided information alleging that the assessee had received a credit of ₹15,00,000/- from a company identified as a “shell concern,” M/s. Sankalp Vincom Pvt. Limited.
The Revenue’s position was that M/s. Sankalp Vincom Pvt. Limited was non-existing, lacked creditworthiness, and the funds were merely layered through various accounts. Consequently, the transaction of ₹15,00,000/- was treated as unexplained and undisclosed income, leading the Joint Assessing Officer (JAO) to initiate reassessment proceedings under Section 147/148A(d) of the Act.
Throughout the assessment and first appellate stage, the assessee categorically and consistently denied having any transaction with M/s. Sankalp Vincom Pvt. Limited. Despite this denial, the Assessing Officer (AO) proceeded to make the addition of ₹15,00,000/- under Section 68. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), subsequently confirmed the addition, prompting the assessee to file an appeal before the ITAT.
