M/s Stone Metals Private Limited vs. Income Tax Officer, Ward-3(3), Kolkata

Parties Involved

Facts Summary

The assessee filed its return of income on 30.09.2012. Subsequently, on the basis of information received from the Investigation Wing of the Income Tax Department, proceeding u/s 147 of the Act were initiated and notice u/s 148 of the Act was issued on 20.03.2018 after obtaining the requisite approvals. The Ld. AO upon reopening the assessment order added Rs. 4 lacs to the assessee income, the addition was made based on information that the assessee had allegedly received Rs. 4 lacs from M/s Turf Advertising and Marketing Co. Pvt. Ltd. during the financial year 2010-11. The Ld. AO view that the company associated for non-genuine business to bring unaccounted money into the books of its beneficiaries. The assessment was completed u/s 143(3) of the Act as the assessee did not represent its case during the reassessment proceedings. Aggrieved by the addition made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), which was dismissed without proper consideration of the submission made by the assessee. During the appellate proceedings, the Ld. CIT(A) based on examination of bank accounts, dismissed the appeal and further the addition by Rs. 3,50,000/-, making the total addition of Rs. 7,50,000, making the total addition of Rs. 7,50,000/-. The assessee being further aggrieved as now preferred this appeal before this Tribunal.…

Legal Issues

• 1. The Ld. AO erred in initiating reassessment proceedings merely based upon information received without independent application of mind and without establishing any live link or intelligible nexus between the information received and belief formed.
• 2. The Ld. AO erred in assessing Rs. 4 Lakh allegedly received by the assessee from M/s Turf Advertising as unexplained cash credit whereas the impugned amount was not received during the year under appeal but the Financial Year 2011-12 (Assessment Year 2012-13).

Judgment Outcome

Decided in favour of Assessee.

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