DCIT vs. Prudential Hotels Pvt. Ltd

Parties Involved

Facts Summary

The assessee filed its return of income for A.Y. 2017-18 declaring a loss. The case was selected for scrutiny, and the Assessing Officer observed that the assessee had repaid 'advance against equity' to the tune of Rs.13.40 crores, which was shown as loans/advances received during the year. The assessee was asked to furnish details to establish the creditworthiness and genuineness of the transaction. The assessee submitted details of persons from whom loans/advances were received back. The Assessing Officer, after detailed enquiry, concluded that the identity, genuineness, and creditworthiness of these entities were not proved and treated the amount as undisclosed income under Section 68 of the Income Tax Act, 1961. The assessee appealed to the National Faceless Appeal Centre (NFAC), which remanded the matter to the Assessing Officer and eventually deleted the addition. The revenue is now in appeal before the Tribunal.…

Legal Issues

• 1. Disallowance of Rs. 41,75,274/- under Section 14A
• 2. Disallowance of Rs. 7,70,00,000/- under Section 68

Judgment Outcome

Decided in favour of Assessee.

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