Income Tax Officer vs. Antara Tushar Motiwala

Parties Involved

Facts Summary

The assessee, Antara Tushar Motiwala, filed her return of income for A.Y. 2017–18 declaring a total income of Rs. 19,05,920/-. The case was selected for limited scrutiny due to a large increase in capital. The Assessing Officer noticed a substantial increase in the capital account and issued notices under section 142(1). The assessee explained that the increase was due to a prior period adjustment of Rs. 8,38,44,023/- from her partnership firm, M/s Lotus Investment. The firm had written back an old unsecured loan, resulting in a credit to the partners’ capital accounts. The Assessing Officer, however, added Rs. 8,38,44,023/- under section 68, deeming it unexplained cash credit. The assessee appealed to the CIT(A), which deleted the addition, leading the Revenue to appeal to the Tribunal.…

Legal Issues

• 1. Whether the CIT(A) erred in deleting the addition of Rs. 8,38,44,023/- under section 68.
• 2. Whether the CIT(A) erred in allowing the assessee’s appeal without establishing the identity and creditworthiness of the lender.
• 3. Whether the CIT(A) erred in allowing the appeal by overlooking the firm's non-genuine nature.
• 4. Whether the CIT(A) erred in allowing the appeal without appreciating that the firm was a special purpose vehicle.
• 5. Whether the CIT(A) erred in allowing the appeal without treating the written-off loan as deemed income under section 41.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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