M/s B G Steels Pvt Ltd.

Parties Involved

Facts Summary

The assessee, BG Steel Pvt. Ltd., filed its return for A.Y. 2012-13 declaring a total income of Rs. 38,34,130/-. The case was processed under section 143(1) of the Income Tax Act, 1961. Subsequently, based on information from the Investigation Wing regarding share application money and share premium received from certain paper/shell companies, the case was re-opened and a notice under section 148 was issued. The assessee filed a return in response, declaring the same income as in the original return. To verify the genuineness of the share application money/premium, notices under section 133(6) were issued to the shareholders. However, all notices were returned undelivered. The Assessing Officer (AO) then issued a show-cause notice to the assessee, treating the entire share application money of Rs. 2,68,11,963/- as unexplained cash credit under section 68 of the Act. The AO completed the assessment at an income of Rs. 3,06,46,060/-. Aggrieved by this, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), which was dismissed. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Whether the order passed by the Assessing Officer (AO) is bad in the eye of law and on facts.
• 2. Whether the AO erred in making the assessment at the income of Rs.3,06,46,060/- as against the returned income of Rs.38,34,134/- declared by the assessee company.
• 3. Whether the AO erred in making the addition of Rs.2,68,11,923/- treating the Share Application Money as unexplained cash credit invoking the provisions of Section 68 of the Act.
• 4. Whether the AO erred in making the addition of Rs.2,68,11,923/- based on conjectures and surmises without appreciating the facts of the case.
• 5. Whether the AO erred in making the additions and the CIT(A) confirmed the said addition without providing the assessee company reasonable opportunity of being heard in gross violation of principle of natural justice.
• 6. Whether the AO erred in making the additions without bringing any adverse material on record and in charging interest under Section 234B and 234C of the Act.

Judgment Outcome

Decided in favour of Assessee.

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