Keshav Shroff Vs ITO (ITAT Kolkata)
The appeal of Keshav Shroff against the Income Tax Officer (ITO) pertains to the Assessment Year 2016-17. The issue revolves around the legitimacy of a notice issued under Section 147 of the Income Tax Act, 1961, based on suspicions regarding an unsecured loan.
Keshav Shroff, an individual taxpayer, initially filed his return of income for the relevant assessment year without issues. However, the case took a turn when the Income Tax department reopened his assessment, alleging that a substantial unsecured loan from M/s. Fast Speed Realcon Pvt. Ltd. was bogus. This allegation stemmed primarily from information provided by Mukesh Banka, which Keshav Shroff contested vehemently.
During the proceedings before the Assessing Officer (AO) and later the Commissioner of Income-tax (Appeals) [CIT(A)], Keshav Shroff submitted extensive documentation to substantiate the loan’s authenticity. This included loan confirmations, audited financial statements, bank statements, and proofs of repayment through proper banking channels. Despite these submissions, the AO upheld the addition of the loan amount under Section 68 of the Income Tax Act, treating it as unexplained cash credit.
The core argument of Keshav Shroff’s appeal was that the AO and CIT(A) erred in relying solely on Mukesh Banka’s statement without adequately considering the documentary evidence provided. His legal counsel contended that the reopening of assessment based purely on suspicion, without concrete evidence of tax evasion, violated procedural fairness and the principles of natural justice.
