Bagla Agro Limited Vs. DCIT, Central Circle-4(1)

Parties Involved

Facts Summary

The assessee, Bagla Agro Limited, filed its return of income for the assessment year 2021-22 declaring a total income of Nil and current liabilities of ₹1,73,512/-. A search action was conducted on the assessee on 05.10.2021, and notices were issued. During the assessment proceedings, the Assessing Officer (AO) debited ₹1,70,607/- as interest paid to M/s Chordia Trade Credits Private Limited, deeming it bogus and non-genuine. This addition was confirmed by the Commissioner of Income-tax (Appeals) (CIT(A)). The assessee appealed against this order, claiming the interest was genuine as it was consistent with previous years' assessments and no incriminating material was found during the search.…

Legal Issues

• 1. Whether the addition of ₹1,70,607/- as interest on loan paid to M/s Chordia Trade Credits Private Limited is valid.
• 2. Whether the AO was correct in initiating penalty proceedings u/s 270A of the Act.

Judgment Outcome

Decided in favour of Assessee.

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