CIT Vs Real Time Marketing Private Limited (Delhi High Court)
The Revenue filed an appeal under Section 260A of the Income-tax Act against the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2001-02. The Tribunal had held that there was no material linking the assessee with the sum of ₹22,97,000 deposited in cash in the bank account of M/s. Fair Business Security and Leasing Pvt. Ltd. (FBSL).
During the relevant year, the assessee had received an unsecured loan of ₹25 lakh from M/s. Aishwaray Capital Lease Finance Pvt. Ltd. (ACL). The Assessing Officer examined the bank statements and found that on 28 March 2001, cash of ₹22,97,000 had been deposited into the bank account of FBSL. On the same day, ₹25 lakh was transferred from FBSL to M/s. Breeze Trade Links Pvt. Ltd. (BTL), then from BTL to ACL, and finally from ACL to the assessee. The Assessing Officer also noted that FBSL, BTL and ACL shared the same address and that no interest had been charged on these transactions. Treating the arrangement as a sham transaction, the Assessing Officer concluded that the cash belonged to the assessee and had been routed through different accounts before being received as an unsecured loan. Accordingly, an addition of ₹25 lakh was made under Section 68 as unexplained cash credit.
