PCIT Vs Skylark Build (Bombay High Court)
The Bombay High Court considered an appeal filed by the Revenue challenging concurrent findings of fact relating to additions made under Section 68 of the Income Tax Act, 1961. The Revenue contended that the essential requirements of Section 68—establishing the identity of the cash creditor, the creditor’s creditworthiness, and the genuineness of the transaction—had not been properly examined by the Tribunal. It argued that the Tribunal had relied upon the subsequent repayment of the borrowed amounts without examining whether these statutory requirements had been fulfilled and had failed to independently endorse the findings of the Commissioner (Appeals).
The High Court noted that the assessment pertained to Assessment Year 2008-09. The assessee had filed its return of income, which was processed under Section 143(1), and the case was subsequently selected for scrutiny. During the assessment proceedings, the assessee furnished details of advances amounting to ₹125,66,09,180 along with bank statements and other supporting documents. Despite these materials being on record, the Assessing Officer concluded that the essential ingredients under Section 68 had not been established and treated ₹23.05 crore and ₹10 crore as unexplained cash credits, adding them to the assessee’s income and initiating penalty proceedings.
