Principal Commissioner Of Income Tax Vs Snowwhite Infrastructure Pvt. Ltd. (Calcutta High Court)
The Calcutta High Court dismissed an appeal filed by the Principal Commissioner of Income Tax against Snowwhite Infrastructure Pvt. Ltd. regarding the assessment year 2012-13. The appeal challenged the Income Tax Appellate Tribunal’s (ITAT) order, which upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] to delete an addition of ₹17.61 crore under Section 68 of the Income Tax Act. The addition was initially made by the Assessing Officer (AO) on the grounds that Snowwhite Infrastructure failed to prove the identity, creditworthiness, and genuineness of its share subscribers. The AO noted that none of the company’s directors appeared in response to notices for verification. However, the CIT(A), after an elaborate fact-finding process and considering judicial precedents, concluded that the funds were received from the company’s holding company, Infinity BNKE Infocity Pvt. Ltd., which was a financially sound entity interested in Snowwhite’s real estate projects. The ITAT reviewed these findings, noting that the holding company was part of the same business group and had invested funds for a large development project in Uttar Pradesh. Additionally, the CIT(A) had obtained a remand report from the AO and evaluated the evidence provided. The High Court, citing the absence of any substantial question of law, upheld the ITAT’s decision and dismissed the revenue’s appeal. The case underscores the importance of thoroughly substantiating claims when challenging the identity, creditworthiness, and genuineness of financial transactions under Section 68.
