Case Law Details
Nano Infra Promoters Pvt Ltd Vs ITO (ITAT Kolkata)
The case of Nano Infra Promoters Pvt Ltd vs ITO at the ITAT Kolkata delves into the issue of whether receipts by a taxpayer can be added to its income under section 68 of the Income Tax Act solely due to non-compliance with summons issued under section 131.
In this case, the assessee, Nano Infra Promoters Pvt Ltd, contested the addition of Rs. 1.21 Crore to its income by the Assessing Officer (AO) on account of share capital/share premium being treated as unexplained cash credit under section 68 of the Income Tax Act. The AO’s basis for this addition was the non-compliance of summons issued under section 131 of the Act.
Despite the taxpayer providing detailed evidence regarding the subscribers/investors, including their identities, creditworthiness, and transaction details, the AO proceeded to add the amount to the income. The taxpayer’s compliance with providing necessary documentation was not considered sufficient by the AO due to non-compliance with summons.
However, the Income Tax Appellate Tribunal (ITAT) Kolkata overturned this decision, emphasizing that the mere non-compliance with summons cannot be the sole basis for adding receipts to the taxpayer’s income. The tribunal highlighted that the taxpayer had fulfilled its obligation by providing the necessary evidence initially, shifting the burden of proof to the revenue authorities.
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