ITO Vs Highlight Properties Pvt. Ltd. (ITAT Kolkata)
Bank Credits Recorded in Regular Books Cannot Be Taxed Under Section 69A; ₹18.83-Crore Addition Deleted: Kolkata ITAT
The Kolkata ITAT has upheld the deletion of an addition of ₹18.83 crore under Section 69A, holding that the provision cannot be invoked in respect of bank transactions duly recorded in the assessee’s books of account and for which an explanation had been offered.
The Tribunal also noticed that transactions in the same Axis Bank account had already been examined in the preceding assessment year, when the Department accepted that the assessee operated as a pass-through entity and assessed only its commission income.
Background
Highlight Properties Pvt. Ltd. filed its return for Assessment Year 2013-14 declaring nil income.
The assessment was reopened on the basis of information received from the Investigation Wing that the assessee had received approximately ₹7.09 crore from five entities allegedly involved in layering of funds.
The entities identified in the information included Bellash Supply Pvt. Ltd., Azzar Trading Pvt. Ltd., Aritro Supply Pvt. Ltd., Mandal Financial Consultancy and Hitendra Commercial Pvt. Ltd.
The assessee disputed the information. It stated that there was no transaction with Mandal Financial Consultancy during the relevant year and that the transactions with the remaining entities related to the sale of investments already disclosed in its regular books.
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