Golden Moment Pvt. Ltd. vs. ACIT, Karnal

Parties Involved

Facts Summary

Golden Moment Pvt. Ltd. is engaged in the business of trading of Basmati rice. The company filed its income return for the assessment year 2015-16 declaring a total income of ₹6,80,240/-. The return was selected for scrutiny, and the Assessing Officer (AO) observed that the company had reflected sundry creditors of ₹4,97,57,755.72 in the balance sheet. The AO issued notices to the creditors, but no response was received. Further inquiries revealed that the persons produced by the assessee as accountants were employees of another company, Best Food Ltd. The AO concluded that the creditors were not genuine and treated the amounts as cessation of liability under Section 41(1) of the Act, adding ₹3,89,21,998/-. The company appealed against this addition. Additionally, the AO added ₹15 lakhs as unexplained cash credit under Section 68 of the Act, which the company also appealed.…

Legal Issues

• 1. Whether the addition made by the AO under Section 41(1) of the Act is justified?
• 2. Whether the addition made by the AO under Section 68 of the Act is justified?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• Hindustan EPC Company Ltd Vs. DCIT

  Delhi Bench benchAY 2017-18Allowed

• Blaze Manufacturing Co vs DCIT

  Delhi “A” Bench: New Delhi benchAY 2014-15Partly Allowed

• Elite Packaging vs Income Tax Officer Ward 17(3)(1)

  Mumbai Bench benchAY 2020-21Allowed

• Deputy Commissioner of Income Tax vs. Lok Jagruti Kendra

  Ahmedabad bench

• Ralson Carbon Black Limited (AY: 2007-08)

  B Bench, Delhi benchAY 2007-08Allowed

• ITO, Circle-25(2), Delhi Vs. Tractebel Engineering Pvt Ltd.

  Delhi Bench benchAY 2017-18Dismissed