Case Law Details
ACIT Vs Aaryavart Infrastructure Pvt. Ltd. (ITAT Ahmedabad)
Mere maintenance of Bank account with Social Co-operative cannot be a ground to draw a conclusion that the assessee is engaged in the accommodation entry and consequently form the reason to believe that the income of the assessee has escaped assessment.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad delivered a crucial ruling in the case of ACIT Vs Aaryavart Infrastructure Pvt. Ltd. regarding the assumption that income escaped assessment due to the maintenance of a bank account with a social co-operative bank. This article provides an overview of the case and the tribunal’s decision.
Background: The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] related to proceedings under section 143(3) read with section 147 of the Income Tax Act for the assessment year 2012-13.
Grounds of Appeal: The Revenue raised several grounds challenging the CIT(A)’s decision to quash the assessment and delete the addition made by the Assessing Officer (AO). The primary contention was that the CIT(A) erred in holding that there was no valid reason to believe that income had escaped assessment.
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