Reform Realty & Logistics Development Pvt. Ltd. Vs DCIT (ITAT Chennai)
In Reform Realty & Logistics Development Pvt. Ltd. Vs DCIT, the appeal arose from an order of the Commissioner of Income Tax (Appeals) for Assessment Year 2017–18 concerning an assessment framed under Sections 143(3) read with 153A of the Income Tax Act, 1961. A search under Section 132 was conducted on 16.10.2019 in the NKV Krishna Group, covering the assessee as a group concern. During the assessment, the Assessing Officer added ₹10,00,000 as unexplained cash credit under Section 68, alleging that share capital introduced by certain individuals was sourced from unaccounted cash generated through group activities.
The Assessing Officer relied on statements recorded during the search and a pen drive seized from a third party, which allegedly contained details of unaccounted cash being introduced as share capital or loans. The Commissioner (Appeals) upheld the addition, stating that the seized material and statements revealed the modus operandi of introducing unaccounted cash and justified the addition, also confirming taxation under Section 115BBE.
Before the Tribunal, the assessee contended that the share capital was already recorded in the regular books of account and that no incriminating material was found during the search linking the assessee to undisclosed income. It was argued that the addition was based solely on entries in regular books and general statements, not on specific seized evidence. The assessee also submitted that its name did not appear in the seized annexures detailing unaccounted transactions.
