ACIT Vs Omshiv Fabricshub Pvt. Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that CIT(A) rightly restricted disallowance on account of unexplained bank deposit and withdrawal under section 68 of the Income Tax Act to 0.3% of total Circular Trading Transaction. Accordingly, appeal of revenue dismissed.
Facts- The assessee is engaged in the business of trading of raw cotton. AO observed that the assessee company has taken accommodation entries totaling the tune of Rs. 88,83,16,516/- (credit and debits) for A.Y. 2013-14, and that such amounts are non-genuine entries entered in the books of accounts. Therefore, AO observed that the assessee company has taken accommodation entry of Rs. 88,83,16,516/- from entity controlled by Sanjay Tiberewal. AO further observed that the assessee has not submitted any document including cash flow statements, bank account statements etc. to substantiate its assertions. Thus, the Assessing Officer held that these entities are paper concerns and engaged in providing accommodation to various unrelated concerns. No underlying business activity has been carried out against the bank transactions made by these entities/ST Group with various entities bogus sales/purchases, bogus share premium or unsecured loans might have provided by the ST Group. AO made addition of Rs. 88,83,16,516/- as unexplained cash credit u/s 68 of the Act.
