Aye Finance (P) Ltd. vs ACIT

Parties Involved

Facts Summary

The assessee, Aye Finance (P) Ltd., is a private limited company engaged in providing micro and small business loans and is regulated by the RBI. The return of income for the year was filed at a loss, which was later revised. The case was picked up for complete scrutiny due to several reasons including low expenses for earning exempt income, high value cash receipts, large share premium received, introduction of large capital, low income compared to high loans/advances, and large value cash deposits during the demonetization period. During scrutiny, the Assessing Officer (AO) examined cash deposits of Rs.2,54,80,348/- during demonetization and made an addition, which was sustained by the Commissioner of Income-tax (Appeal). The assessee appealed against this order raising several grounds including violation of principles of natural justice and incorrect facts and findings.…

Legal Issues

• 1. Whether the addition of Rs.2,54,80,348/- on account of cash deposits by the AO is justified.

Judgment Outcome

Decided in favour of Assessee.

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