Income Tax Officer vs Swan Digital Foundation

Parties Involved

Facts Summary

The assessee, Swan Digital Foundation, filed its return of income for the Assessment Year 2012-13 declaring income at Rs. 32,168/-. Information was received that the assessee company received an amount of Rs. 1,23,85,000/- through bank transfer from the savings bank account of Mr. Shujaat Hussain, an employee of M/s. Aman Enterprises. Proceedings under section 147 of the Income Tax Act were initiated, and a notice under section 148 was issued to the assessee. The assessee company, incorporated as a business correspondent for banks, received the amount in violation of the terms and conditions of the agreement with State Bank of India. The Assessing Officer (AO) asked for documentation to authorize Mr. Shujaat Hussain to collect money and remit it to the assessee's account but the assessee failed to provide the details. Consequently, the AO treated the receipts as unexplained cash credit under section 68 of the Act and assessed the total income at Rs. 1,24,17,168/- by making an addition of Rs. 1,23,85,000/-.…

Legal Issues

• 1. Whether the addition of Rs. 1,23,85,000/- made under section 68 of the Income Tax Act, 1961, was justified.
• 2. Whether the assessee is allowed to render services through sub-contractors without prior written approval of the bank.
• 3. Whether the assessee failed to establish the source of the deposits during the assessment proceedings.

Judgment Outcome

Decided in favour of Assessee.

Similar Judgements

• Mr. Subhash Suryakant Phadkar Vs. Income Tax Officer

  Mumbai Bench benchAY 2011-12Allowed

• DCIT, Central Circle 7(1), Mumbai - 400020 Vs. Supreme Holdings & Hospitality (India), 1, Pearl Mansion N 91, M. Karve Road, Marine Lines, Mumbai - 400020

  Mumbai Bench benchAY 2013-14, 2014-15, 2015-16, 2016-17Dismissed

• Nevin H. Bharwani v/s Income Tax Officer (International Taxation)

• ACIT VS. DEE FACES HERBAL PVT. LTD

  Delhi Bench ‘B’ New Delhi benchAY 2011-12Dismissed

• Revenue vs. Manju Diamonds Pvt. Ltd.

  Mumbai Bench benchAY 2017-18Partly Allowed

• Glamour Merchandise LLP Vs ITO, Ward-15(2), Kolkata

  Kolkata Bench benchAY 2011-12Partly Allowed