Taxpayer Failed To Duly Substantiate Question Of Identity & Source Of Fund: Kolkata ITAT Remits Matter For Re-adjudication

Finding that the issue in question has been agitated for the first time before the Bench and the same has been covered by a previous decision under homogenous facts, the Kolkata ITAT remitted back the matter to the file of AO for further adjudication de-novo both in legal as well as factual aspect of the assessee.Referring to the decision of Delhi High Court in the case of CIT vs. Insecticides (India) Ltd. [2013] 357 ITR 330 (Delhi), the Bench of Rajesh Kumar (Accountant Member) and Anikesh Banerjee (Judicial Member) reiterated that “where if the re-opening of the assessment on the vague allegation that on basis of the report of Director of Income-tax (Inv.), the assessee was involved in accommodation entries without specifying details thereof and without disclosing the said report of the Director of Income-tax (Inv.) the entire assessment was invalid”. (Para 8) As per the brief facts of the case, the assessee company has received an amount from M/s. Falcon Tyres Ltd. (FTL) amounting to Rs. 9.36 Crore and the same amount was transferred to his sister concerned M/s. Miller Traders Pvt Ltd. (MTPL). After the notice u/s 133(6) was issued, the MTPL has complied the notice and filed all the documents related to receiving of the fund from the assessee. But the notice u/s 133(6) was not served to FTL and FTL had not complied before the AO related to his payment of fund to assessee company. Accordingly, the identity of the source of the fund was not proved. So, u/s 68, the amount of Rs. 9.36 Crore was added to the total income of the assessee.The Bench found that the assessee was able to prove the transaction of fund to MTPL and complied the notice u/s 133(6) of the Act. However, the Bench noted that in case of FTL, the assessee was not able to prove the identity and source of the person for non-compliance of the notice u/s 133(6) of the Act. Even no such evidence was submitted before the AO to prove the genuineness of the transactions, added the Bench. The Bench also pointed that even before the AO, the issue was not agitated and the objection was not filed by the assessee during the time of assessment proceedings.Hence, the ITAT remanded the case for adjudication afresh. Counsel for Appellant/ Assessee: Manoj KatarukaCounsel for Respondent/ Revenue: P.P Barman Case Title: Dahisar Traders verses ITO Case Number: I.T.A. No.: 1069/KOL/2023 Click here to read/ download the Order

Taxpayer Failed To Duly Substantiate Question Of Identity & Source Of Fund: Kolkata ITAT Remits Matter For Re-adjudication

Pankaj Bajpai

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