Prasant Desai vs. DCIT, Circle-61, Kolkata

Parties Involved

Facts Summary

The assessee, Prasant Desai, appealed against the order of the National Faceless Appeal Centre confirming the addition of Rs.75,00,000/- made by the Assessing Officer on account of unsecured loans received from M/s Festive Deal Trade Pvt. Ltd. treating the same as bogus. The assessment of the assessee was reopened under section 147 of the Income Tax Act based on information received from the Investigation Wing that one Sri Mahesh Sharma, through his proprietorship concern M/s D P Trading, was providing accommodation entries to various persons including bogus loans. The assessee had transacted Rs.75,00,000/- through the said concern. The Assessing Officer formed the belief that the assessee had not reported the transaction and reopened the assessment. The assessee argued that the information was not enough to form the belief that the income had escaped assessment and that the Assessing Officer did not correlate the information with the accounts of the assessee. The assessee also argued that the information available to the Assessing Officer was vague and not enough to form the belief that the income had escaped assessment.…

Legal Issues

• 1. Validity of the reopening of the assessment
• 2. Additions made by the Assessing Officer

Judgment Outcome

Decided in favour of Assessee.

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