Maithan Ceramic Limited vs ACIT, Circle-7(1), Kolkata

Parties Involved

Facts Summary

Maithan Ceramic Limited, engaged in manufacturing and dealing in refractory goods, filed its return of income for the Assessment Year 2011-12 declaring a total income of ₹28,82,17,350/-. The case was selected for scrutiny, and the assessment was completed under Section 143(3) on 28.03.2014. During the relevant financial year, the assessee availed a loan of ₹1 crore from M/s. Nidhi Agro Pvt. Ltd. on 02.07.2010 through proper banking channels. The loan was raised to meet the financial requirements of the business. Interest of ₹7,47,945/- was paid on the said loan, on which TDS of ₹2,74,795/- was duly deducted under Section 194A of the Act. The loan was returned/repaid on 23-01-2012 much prior to the reopening of the case under Section 148 dated 23-03-2018 through banking channel, disclosed in Tax Audit Report. Subsequently, the Assessing Officer issued a notice under Section 148 of the Income-tax Act, 1961 dated 23.03.2018 for the Assessment Year 2011-12, based on information received from the Director of Income Tax (Investigation), Unit-1(3), Kolkata. The reasons recorded for reopening the assessment were based on a Suspicious Transaction Report (STR) generated by the FIU-IND, New Delhi, in respect of M/s. Vista Dealcom Pvt. Ltd., maintaining ICICI Bank Account No. 129005000024 at Central Avenue Branch, Kolkata. The report alleged that cash was regularly deposited into the said account and subsequently routed through RTGS/cheque transfers to companies like M/s. Maxworth Vinima…

Legal Issues

• 1. Validity of the reopening of assessment under Section 148 of the Income Tax Act.
• 2. Whether the reasons recorded for reopening are sufficient and valid.
• 3. Whether the notice under Section 148 is barred by time limitation.
• 4. Whether the loan transaction was genuine and properly verified.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

Similar Judgements

• Navnirman Infracon Pvt ltd. vs. ITO, Ward 10(2), Kolkata

• ITA No.1393/Del/2018

  Delhi Bench benchAY 2009-10Dismissed

• Avtar Instalments Pvt. Ltd. Vs DCIT

  Delhi Bench ‘E’, New Delhi benchAY 2017-18Allowed

• Tirupati Timbers & Packaging Pvt. Limited

  SMC Bench, Kolkata benchAY 2011-2012Allowed

• Meghna Banga Vs. DCIT, Central Circle-7

  Delhi Bench benchAY 2017-18Partly Allowed

• DCIT, Central Circle-4(4), Kolkata Vs. Flex Trade Pvt. Ltd.

  Kolkata Bench benchAY 2018-19Dismissed