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Case Law Details

Case Name : Ganesh Ganpat Alim Vs ITO (ITAT Surat)
Appeal Number : ITA No. 40/SRT/2022
Date of Judgement/Order : 08/05/2023
Related Assessment Year : 2012-2013
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Ganesh Ganpat Alim Vs ITO (ITAT Surat)

ITAT Surat held that addition under section 68 of the Income Tax Act should not be made when repayment of loan is made in the assessment year itself.

Facts- During the assessment proceedings, AO got information from investigation wing that M/s Delight Diam P Ltd. and M/s Bafna Exim Pvt. Ltd. are not carrying out any real business but are only providing accommodation entries. The investigation wing also recorded statement of Shri Deepak Kailash Babel and Sh. Pravin Kumar Jain, the key persons of M/s Delight Diam P Ltd and M/s Bafna Exim Pvt Ltd respectively.

AO observed that the unexplained transaction carried out with the Delight Diam Pvt Ltd, Bafna Exim Pvt. Ltd to suppress his total income. Since, the assessee had made bogus transactions with Delight Diam Pvt. Ltd of Rs.45,00,000/- and Rs.4,00,000/- with Bafna Exim Pvt Ltd during the year under consideration. Therefore, Rs.49,00,000/- was added in the total income of the assessee as bogus purchase. Further, the assessee company has received fund of Rs. 15,00,000/- from the bogus concern Delight Diam Pvt. Ltd. The assessee has not furnished his explanation during the assessment proceedings. Therefore, AO noted that it is nothing but unaccounted income of the assessee and the same was not offered for taxation. Therefore Rs. 15,00,000/- was added to the total income of the assessee for the year under consideration on account of unexplained fund received from the paper/shell company M/s Delight Diam Pvt. Ltd. This way, total addition made by the assessing officer comes to Rs.64,00,000/-. AO, having gone through the reply of the assessee, held that assessee has not explained the bona fide of these transactions therefore made addition to the tune of Rs.64,00,000/-.

On appeal, ld CIT(A) confirmed the action of the assessing officer. Aggrieved, the assessee is in further appeal before us.

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