Income Tax Officer, Gangtok Vs. Bhumika Rai

Parties Involved

Facts Summary

The assessee, Bhumika Rai, is engaged in the business of LPG cylinders and DTH services under the name M/s Nayuma Indane. She is an authorized dealer of Indian Oil Corporation Limited and received commission income on DTH services from Dish Infra Services Private Limited in Namchi, Sikkim. The assessment for AY 2017-18 was re-opened by the Assessing Officer (AO) as the assessee had not filed the return of income and had made several financial transactions during the year. The assessee claimed exemption under section 10(26AAA) of the Income Tax Act, 1961, stating she was a Sikkimese citizen. The AO treated certain deposits and commission income as unexplained and added them to the assessee's income. The assessee appealed to the Commissioner of Income Tax (Appeals)-NFAC, Delhi, who allowed the appeal and deleted the additions made by the AO, holding that the assessee's income was exempt under section 10(26AAA).…

Legal Issues

• 1. Whether the CIT(A) was justified in allowing exemption u/s 10(26AAA) of the I.T. Act to the assessee on addition treated as undisclosed and unexplained income.
• 2. Whether the CIT(A) was justified in admitting fresh evidence without calling a remand report from the AO.
• 3. Whether the CIT(A) erred in accepting additional evidences without discussing the circumstances that prevented the assessee from producing the same before the AO.
• 4. Whether the CIT(A) was justified in striking down the addition made by the AO without calling for confirmation of accounts from Indian Oil Corporation Limited.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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