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Case Law Details

Case Name : DCIT Vs G.K. Ispat Pvt. Ltd. (ITAT Kolkata)
Appeal Number : I.T.A. No. 2408/Kol/2019
Date of Judgement/Order : 21/11/2022
Related Assessment Year : 2011-12
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DCIT Vs G.K. Ispat Pvt. Ltd. (ITAT Kolkata)

ITAT Kolkata held that addition cannot be made on protective basis in the reopened assessment proceeding as the assessment cannot be reopened for a contingent nature of addition.

Facts- During the course of original assessment proceedings, the AO examined the issue of an interest-bearing loan taken from M/s Gaurav Rose Real Estate Pvt. Ltd.of Rs. 14.11 crores by calling for various details and evidence which were duly furnished by the assessee. The said transaction of Rs. 14.11 crores was explained by the assessee before the AO and assessment was also framed accordingly by accepting the transactions as genuine. Subsequently the AO received information from Investigation Wing that the assessee had transaction with M/s Gaurav Rose Real Estate Pvt. Ltd. of Rs. 70 Lakhs during the F.Y. 2010-11 which is paper company managed and controlled by Shri Manohar Lal Nangalia and accordingly the case was reopened by issuing notice u/s 148 of the Act dated 31.03.2018 which was complied with by filing return of income on 24.04.2018.

AO during the original assessment proceedings called for various details and evidences which were duly filed by the assessee comprising loan confirmation, bank statement of the assessee as well as of M/s Gaurav Rose Real Estate Pvt. Ltd. proving the source of funds received by the assessee.

AO came to the conclusion that the assessee and M/s Gaurav Rose Real Estate Pvt. Ltd are operating in collusion with the result that assessee is the ultimate beneficiary of Rs. 14.11 crores and M/s Gaurav Rose Real Estate pvt. Ltd. has played the role of accommodation entry provider and therefore accordingly the amount was added u/s 68 of the Act to the income of the assessee thereby assessing the income at Rs. 15,08,19,400/- vide order dated 30.12.2018. The assessment of M/s Gaurav Rose Real Estate Pvt. Ltd. was also reopened u/s 147 of the Act and addition was on protective basis.

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