Case Law Details
DCIT Vs Suboli Ice and Cold Storage Pvt. Ltd. (ITAT Delhi)
ITAT Delhi held that genuineness and veracity of the party cannot be doubted merely because the cold storage rent was received in cash. Accordingly, addition u/s. 69 of the Income Tax Act towards unexplained investment unjustified.
Facts- Assessee is in the business of running cold storage facility. Pursuant to search in the case of Rakesh Jain, there was a survey u/s. 133A in the premises of the assessee including its cold storage facility.
In the course of assessment proceedings, a show cause notice was issued to the assessee to furnish supporting evidences, details to establish the genuineness of the parties along with names and addresses from whom the summons were returned back. In response to the show cause notice, the assessee further furnished copies of ledger that payments against storage charges were received through banking channels in respect of 10 parties out of 18 parties, therefore, AO accepted the transactions with the said 10 parties as genuine. However, with regard to the remaining 8 parties, AO treated the stock found mentioned against the said 8 parties as belonging to the assessee for the reasons that the parties have paid storage charges in cash and no evidence was furnished to prove the stock belonged to them.
AO valued the stock taking the rates prevailing as on the date of survey and made an addition of Rs.54,10,76,600/- as an unexplained investment of the assessee u/s. 69 of the Act. CIT(A) deleted the addition. Being aggrieved, revenue has preferred the present appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.